First, Haitian Flavor Industry’s performance cannot support the “rocket rise” in its market value.

Some time ago, the market value of Haitian Flavor Industry exceeded 650 billion yuan, directly catching up with PetroChina. "A bottle of soy sauce" is more expensive than "a barrel of oil", which has made people in the industry exclaim that Haitian Flavor Industry has been overvalued.

Haitian Flavor Industry was listed in 2014, with a market value of only 49.7 billion yuan at that time. By 2019, Haitian Flavor Industry's market value had exceeded 300 billion. Unexpectedly, in just one year, Haitian Flavor Industry's market value had nearly doubled again.

However, in contrast, Haitian Flavor Industry's performance has not been as outstanding as its valuation.

In 2014, Haitian Flavor Industry had revenue of 9.817 billion yuan and attributable net profit of 2.09 billion yuan; in 2018, its revenue was 17.03 billion yuan and net profit was 4.365 billion yuan, which just doubled.

Judging from the data, Haitian Flavor Industry is obviously overvalued, and its stock price is difficult to maintain a high level.

Second, institutions and foreign capital "joined forces" to promote the strong rise of Haitian flavor industry.

Since this year, fund companies have continued to increase their holdings in Haitian Flavor Industry.

In the first quarter report of 2020, there were only 122 fund holders of Haitian Flavor Industry, accounting for 1.49% of the outstanding shares; however, in the semi-annual report, the number of fund holders reached 490, accounting for 1.96% of the outstanding shares.

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In just a few months, the number of new fund holdings reached 368, and the proportion of outstanding shares increased from 1.49% to 1.96%. The crazy influx of institutional investors was an important reason for the rise in the share price of Haitian Flavor Industry.

The sharp drop in the stock price means that the investment institutions that had previously formed a group were divided, and everyone was no longer unanimously bullish on Haitian Flavor Industry.

In fact, some smart funds have already begun to reduce their holdings of Haitian Flavor Industry during the interim report, and some foreign investors have also begun to sell Haitian Flavor Industry crazily.

Third, in the short term, the price of Haitian Flavor Industry will continue to fluctuate, and investors who want to intervene must be cautious.

Some insiders said, "No matter how good value stocks are, if they are not bought at the right price, investors will still suffer losses."

Judging from the current market, tighter liquidity is exacerbating the differentiation of stock prices. Judging from the stock price of Haitian Flavor Industry, although some brokerages still maintain a "buy" rating, its investment risks are obvious to all.

To sum up, the sharp drop in Haitian Flavor’s stock price means that its valuation has been too high, its operating profit cannot support its skyrocketing stock price, and investment institutions have also disagreed on its stock price trend. Taken together, investing in Haitian Flavor in the short term is

Business risks are high.

Extended information: The market value of Haitian Flavor Industry has evaporated by hundreds of billions. As of the closing price on September 7, Haitian Flavor Industry fell 5.33% from the closing price of 170.79 yuan on the previous trading day.

The highest price on the day was 169.88 yuan, and the lowest was 160.00 yuan. The trading volume was 15.0672 million lots, and the market value was 523.9 billion yuan.

In the last two trading days, Haitian Flavor Industry has fallen sharply for two consecutive days, with declines of 7.68% and 5.33% respectively.

A few days ago, Haitian Flavor Industry had just reached a new peak of 650 billion yuan in market capitalization, ranking 11th in the A-share market, catching up with PetroChina, which ranked 10th.

In just a few days, the market value of Haitian Flavor Industry fell from more than 650 billion yuan to less than 530 billion yuan, and its market value shrank by 120 billion yuan.

Under the "myth" that "a bottle of soy sauce" is more expensive than "a barrel of oil", more industry insiders believe that the market value of Haitian Flavor Industry has been overvalued.

Shen Meng, director of Chanson Capital, said that the high share price of Haitian Flavor Industry was caused by market funds, and it is reasonable for it to fall. The reason for the decline is that the overall consumer sector rose too much in the early stage and capital profits were realized.

In this regard, a reporter from Beijing Business Daily contacted Haitian Flavor Industry for an interview, but so far, the other party has not responded.