Analysis Of China’s Listed Companies Associated With Capacity Expansion Bulletin Impact On Stock Prices

Investors’expect of the company’s earnings will affect the supply and demand of the company’s stocks. Supply and demand determine the price of the stock, and the changes of stock supply and demand have an impact on the stock price. Public information on the stock market is an important factor for investors to judge the impact of the company.Expansion of its production capacity will have an important impact on their future development, mainly reflecting the impact of these on the company’s future cash flows. The company’s future cash flow is an important factor affecting stock valuations. Any information released about the production capacity of a listed company, including the issuance of shares, mergers and acquisitions and asset restructuring announcement and other major events, will have an impact on the listed company’s share price.As an emerging industry, development prospects, China industrial policy is focused on supporting Electronic equipment, instruments and components industry. Expansion of production capacity of domestic enterprises will have a significant impact on the global market. Research published in the listed companies in the industry and the impact of capacity expansion related information on stock prices, has important theoretical and practical significance.On the basis of analyzing the related companies’stock price data, this paper focuses on short-term announcement effect and propagation effects associated with capacity expansion information.This paper is divided into seven chapters, each chapter reads as follows:The first chapter Includes three aspects:First, the significance proposed research background, issues and research; Second, the logical framework of this study. Third, study methods and innovation of this paper.The second chapter is literature review. This article mainly relates to the economic theory, the text of the relevant domestic and foreign literature study conducted for the review and summary.The third chapter of electronic equipment, instruments and components industry analysis, including four aspects:1, the semiconductor technology development process and display the current mainstream flat-panel display technology;2, show the latest overview of the development of the semiconductor industry;3, China’s semiconductor display status of development of the industry and market overview;4, the cause of studying China’s semiconductor industry.The forth chapter is electronic equipment, instruments and components industry specific company analysis. Including the contents of five parts:1, the brief introduction of the company;2, the company will become the world’s largest panel display manufacturing enterprises;3, the company’s technology advantage: master a variety of advanced display technology and can its industrialization;4, the company of the industry chain downstream fruitful cooperation;5, the company analyzed and summarizedChapter V An empirical model of information propagation effects of the announcement effect associated with the capacity expansion when the main products released.Chapter VI An Empirical Analysis of the announcement and propagation effects of the semiconductor industry which the main products of the listed companies publish information related capacity expansion. Including two aspects: First, researching the price of the listed companies’shares whether exists abnormal returns before and after the relevant notice information dissemination; Second, researching the price of the company’stocks in the same industry before and after the information whether has abnormal returns or not within five trading days, to decide whether the information propagation effects exist.Chapter VII Conclusions, investment advices and research prospects. The first part of the paper is to make a summary of research findings, and the second part of the paper is to propose investment advice to investors, then, proposed limitations and subsequent further research prospects of this paper.The main conclusion of the paper is:On the day of information related to capacity expansion released, the average abnormal returns AAR is0.297%of its shares at a5%significance level significantly different from zero. On the third day after the announcement, the average abnormal returns for the company’s stock rate ARR-0.573%, at the5%significance level significantly different from zero. And information related to capacity expansion within five trading days after publication. Before and after the announcement, the stock price had no significant cumulative average abnormal returns.Referring to the company’s stock price before the announcement within five trading days of the abnormal returns and cumulative abnormal returns, there is no significant change, with the capacity expansion-related information within the same industry companies, no significant propagation effects.Technology-intensive and capital-intensive industries such as semiconductor display, with the capacity expansion related to the release of information in the information dissemination Day, a listed company’s share price does’ generate positive and significant abnormal returns, investors can make obtain abnormal returns. But the abnormal returns obtained unsustainable, investors can take advantage of relevant information to profit in the short-term trading. As with the capacity expansion release relevant information, the listed company abnormal fluctuations in stock prices do not exceed three trading days after the relevant announcement, so information dissemination and short-term price effect is significantly.The main innovation of this paper is as follows:Domestic previous studies focused on different categories of listed companies in the announcement effect of a notice of information, such information does not distinguish between the specific content of the information, and this article is based on the actual content of the announcement classification and studies its announcement effect. Compared with previous studies, enriched the contents of the announcement effect.Domestic previous literature studied the announcement effect of listed companies with the announcement of information, but no one researched propagation effects and no one researched companies which in the same industry about their stock price whether there is a significant change after the relevant announcement. In this paper, the problem has been studied to enrich the information on the stock market impact of research.Domestic previous literature in the study of the effect of the relevant announcement, did not distinguish the differences among the announcements of the company’s industry. In this paper, a detailed study of a listed company and the industry, combined with empirical results, can provide more detailed investment advice and comments to investors, the findings in the study of investor-related issues in other industries also have reference action.This article provides recommendations for investors:To invest in technology-intensive and capital-intensive industries such as semiconductor display, we should know that the listed company’s share price does have a positive, significant abnormal returns through short-term operation,and this can make us get higher returns than the market average excess.Above-market returns to investors due to capacity expansion released relevant information is not sustainable. Specifically, this sustained period of excess income does not exceed five trading days after the relevant announcement, studies show that in the third trading day after the relevant announcement, the stock price will have a significant negative abnormal returns.With announced capacity expansion and related information of listed companies in the same industry, their stock price did not change significantly before and after the relevant information dissemination. Specifically, the study shows that the companies’stock in the upstream and downstream industry chain does not have significant abnormal fluctuations in the five trading days of the information published before and after. If the investor’s portfolio including these enterprises, there is no need to adjust the portfolio after the relevant information released. Meanwhile, investors can grasp the opportunity to invest in the short-term to get more than the market average performance gains from this study.To invest in the shares of listed companies of this industry, we should pay attention to the value of the company’s overall assessment of the level, and analysis the fundamentals of listed companies, then choose to intervene. We can make a guide for investors:average selection the low point to buy within1-3trading days after the capacity expansion related announcements released. This requires investors to track information about the company’s announcement of capacity expansion.