【Answer 1】 111. SANHUA INTELLIGENT CONTROLS: Its H-share price is 54% of its A-share price; its trailing twelve-month P/E is 26.6, and its P/B is 3.3. Initially, I thought the A-share valuation was too high—but upon seeing the H-share valuation, it seemed acceptable. I’ll wait a few days to free up some positions from the Nasdaq index before reconsidering. 112. BYD’s current valuation is not high—just within a reasonable range, not yet undervalued. Its H-share price stands at 0.83× its A-share price. Given that H-shares typically trade at an ~20% discount to A-shares, this H-share valuation is unremarkable. 113. CSSC OFFSHORE & MARINE ENGINEERING (GROUP): Its H-share P/B is 0.88, with both revenue and profits performing normally. Additionally, AVIC AIRCRAFT ENGINE (GROUP), AVIC XI’AN AIRCRAFT INDUSTRY, and the above-mentioned stock all sit near their valuation bottoms—yet it remains unclear when they might rally. Characteristics of such stocks: They fluctuate mildly and uneventfully over long periods; occasionally, positive catalysts trigger sudden rallies—e.g., a 30% surge. By the time you confirm the trend and buy in, the stock may quickly rise another 20% before peaking. Thus, trading them poses challenges: • Accumulating positions at the bottom carries uncertainty about how long one must wait; • Once the rally begins, it often ends abruptly. If entering positions, cap exposure at no more than 20%.

Unveiling the Logic Behind Stock Price Fluctuations

【Answer 2】 To truly understand the logic behind stock price fluctuations, we can analyze them from the perspective of corporate operations. “Fluctuations in corporate earnings drive fluctuations in stock prices.” Specifically, there are five scenarios: 1. Gradual Earnings Growth & Low Stock Price: When a company’s earnings grow modestly and steadily, its stock price tends to remain relatively low—and thus exhibits limited volatility. If future performance continues aligning with market expectations for steady, modest growth, the stock price will likely rise gradually over time. (Example: many blue-chip stocks—low volatility overall, but slow upward drift over extended periods.) 2. Declining Earnings & Low Stock Price: If a company’s operating performance is poor and its growth prospects appear dim, yet its stock price has already fallen to a relatively low level, that low price may already reflect pessimistic expectations. Consequently, further price volatility tends to be muted. (Example: certain legacy traditional industries whose stocks have languished near multi-year lows for extended periods.) 3. Rapid Earnings Growth & Low Stock Price: When investors anticipate sustained rapid earnings growth—whether based on actual fundamentals or speculative narratives—the stock price rises accordingly. The more consensus builds among investors around this expectation, the faster and stronger the price appreciation becomes. (Example: popular growth stocks or theme-driven stocks.) 4. Rapid Earnings Growth & High Stock Price: After a substantial price run-up, if actual earnings fail to keep pace, the stock price—now at relatively elevated levels—becomes fragile. Its support from fundamentals (earnings, P/E ratio, dividend yield) weakens significantly. At this stage, even minor developments can trigger sharp price swings. Examples include: the end of a growth narrative or exposure of unrealistic hype; short-term sales declines; temporarily bloated dealer inventories; changes in contract liabilities; unexpected black-swan events; or even offhand remarks by the CEO. Such seemingly minor triggers may be interpreted by investors as signals of an industry-wide cyclical turning point—prompting abrupt and significant price volatility. 5. Improving Earnings & Low Stock Price: A company previously expected to underperform—and thus trading at a relatively low price—may see its stock rise once its earnings begin improving meaningfully.

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Stepan Co (SCL) trades at $57.570 with a 0.09% increase, reflecting healthy fundamentals as a specialty chemical manufacturer. Analysts rate the stock a Buy with a $75 target price due to high growth potential.

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