An Empirical Study Of The Stock Price Performance Of The Blue Chip Listed Corporations

Factors that affect the stock price ups and downs in investment securities are endless, but the two core elements are valuation and liquidity. Financial statements for its usability and accessibility is an important source of information for investors in the valuation of listed companies. The development of China’s stock market is not mature enough, many investors that lack of confidence on the effectiveness of China’s stock market can not find effective methods of verification, and they even do not know how to filter out the true blue chip listed companies through the financial report.On the basis of the existing literature, consulting opinions and suggestions of many business executives, senior registered accountants, securities researchers and investment advisers, this paper screens blue chip companies from the first quarter financial report that have important guiding significance in the process of investment, and earnings of different market background of blue chip stocks had been done the empirical study. The main work in this paper is as follows:(1) Financial index system for screening of blue chip listed Corporation is determined by expert consultation method. And the financial index is the gross profit margin that reflect the arrived right price of enterprises in the market, the year-on-year revenue growth rate that reflect the degree of expansion of the enterprise in the market, the annual return on net assets that reflect the operating efficiency of enterprise assets.The financial indexes system also clarify that the above index threshold were40%,30%and15%. Meeting the three indicators, the company that is not lower than the index value is the extremely outstanding performance company.(2) Screening out2006-2014blue chip listed corporations’stock code, name, industry, daily price data and monthly data by Wind financial terminal system, this paper downloads various stock indices since the release of daily data and monthly data.(3) The paper analyzes the general situation of blue chip listed Corporation and different indices in the trend of2000-2014.(4) Through comparison of the corresponding stock index, the paper analyze the earnings of the blue chip listed Corporation in2006-2014.After in-depth analysis of the empirical results, this paper drew the following conclusions:(1) Bear and bull markets conversion cycle was about4-5years in China’s stock market, the index may fall back position again a decade ago, but there are differences in the nature of the market from before; Substantial decline in the number of blue chip companies, and the decline may be conducted as a leading indicator that the stock market might be about to turn and pull up sharply.(2) The overall operating efficiency of Shenzhen-listed Corporation is higher than that of Shanghai; blue chip companies in the proportion continues to rise since2006, but the proportion of the state-owned enterprises continues to decline, this situation highlights the necessity of the current reform of state owned enterprises.(3) Real estate, biological medicine, food and beverage, computer over the past9years is the most vulnerable to become the blue chip listed Corporation industry.(4) In the bull market to start the year, earnings of blue chip stocks lagged behind the corresponding index, but in the market turbulence and the bear market, blue chip stocks got excess returns.(5) Although China’s stock market is not sufficiently standardized, the value of the investment is still effective in the most of time, the market performance of the blue chip companies is more rational.(6) Without considering the individual differences in the stock market, mechanically using correlation analysis, regression analysis, mathematical method is not desirable.