Investors are most crazy over the investments offered by China. It may be because it the basic factor that has largely contributed to the world growth. It also represents 19%of the total population of the world. But now, some problems are being faced by china as it makes growth in the economic field. According to World Bank, the country needs to make changes in policy in order to be sustainable. China is in continuous trade war with US as well.
Ways of investment analysis:
One must go through complete investment analysis in China. There are different methods for making complete analysis before investing in China:
- Fundamental analysis: Basic data like earnings, sales etc. is used for studying the stock value. Intrinsic value of stock is reflected through equilibrium. An easy profit can be made if the investor can differentiate between the price of market and intrinsic value.
- Market analysis: General economic growth is identified with a focus on variables affecting the industry and the company. The movement of share prices are affected because of the developments occurred.
- Industry analysis: The industrial sector is examined for a short period of time. It includes further stages:
- Pioneer stage: The level of sales keeps increasing. The competition takes the lead because of the opportunities offered outside the company.
- Developmental stage: the quality of products increase for the improvement of industry. There is an attempt for the reduction of prices.
- Maturity stage: The rate of growth is very low here. The costs are stable and many competitors are always ready in the market.
- Stage fall: Decline is faced by the company and the revenue also decreases as the levels of sales drop.
- Company analysis: Internal and external aspects are kept in mind while making complete investment analysis in China. The aspects of internal structure of organization have to be dealt with. The intrinsic value of company is calculated too. This is compared with the value of stock market. Financial data of the company is jotted down. Position of assets and the liabilities of company are observed through the balance sheet. Performance of management should be evaluated. The profitability of company must also be evaluated.
- Technical analysis: This is the stage of analysis of statistics by evaluating the securities. The details are generated by past prices ad volume and other market activity strategies. This does not include the calculation of the intrinsic value but patterns are identified via charts and other tools. This makes a record for the future activity.
A last word!
All the five ways are important for self satisfaction regarding investments in China. Your savings are very dear to you. You would not want to waste them. Investment has to be done once details are collected and the person’s mind is clear of all queries. China is at an economic verge these days which is why think carefully before using your savings for investing in China.