Railway infrastructure is actually an important difference between engineering stocks and construction stocks. Regardless of the past trend of overseas markets or A-shares, the valuation of engineering and construction stocks is generally 10 times or 15 times, and will not be higher. Because the net interest rate of engineering construction stocks is only about 2%, and the demand for funds is large, and the sensitivity to the cost of funds is high, it is not a good investment variety and cannot be given a higher valuation. The second is the problem of growth. In recent years, China has increased its investment in railway infrastructure, but from the statements of China Railway Construction and other related listed companies, the growth rate of orders is actually not high, generally at 15% to 20%. In this case, the future growth of such stocks is not very promising. What's more, from the overseas projects of railway infrastructure stocks, the risks are high, the risks are high and the net profit rate is low. Can this industry give a higher valuation? On the other hand, the dynamic P/E ratio of railway infrastructure stocks has risen to more than 20 times. Therefore, the increase of valuation risk will restrict the subsequent rebound space of such stocks and should be treated with caution.
Consolidation is also called "consolidation". After a period of rapid rise or fall, the fluctuation range of stock price begins to decrease when it meets the resistance line or support line. The emergence of consolidation phenomenon shows that the bullish bad news has been exhausted, and there may be a big trend change below. It is generally believed that the fluctuation range of stock price is around 15%, and this situation will last for some time, indicating that the stock market has entered the consolidation stage. In the consolidation stage, bears and bulls will compete with each other, making prices stagger. A period of consolidation often means that a new trend is about to begin. Low-level consolidation refers to the stock price hovering at the bottom after a period of decline. In addition, with the emergence of Lido, popularity gradually gathered, and market funds did not withdraw. As long as the stock price stops falling, they will enter the market one after another. From idling to idling, the main bookmakers are constantly absorbing cheap chips in the market, and the floating chips are decreasing day by day, reducing the pressure of upshifting, and many parties are ready to go in this regard. When this happens, the plate will break upward. This consolidation will generally appear in the form of rectangular and circular bottoms.