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How to view the quarterly reports of listed companies

Compared to semi-annual reports and annual reports, the disclosure of quarterly reports of listed companies is simpler. However, simple does not mean "hollow". On the contrary, by understanding, reading, analyzing the quarterly report, investors can still find more clues to make wise investment decisions.

In order to enforce and standardize the disclosure of information in the quarterly report, the regulator has made more specific disclosure requirements regarding the primary accounting data, financial indicators, the total number of shareholders, the number of shares held by the top ten outstanding shareholders at the end of the report period, management discussion and analysis, profit and profit distribution table for the report period.

However, relying on these information is not enough for investors to make reasonable investment decision. Because the quarterly reports disclosure items prescribed by regulators are equally available to most companies: there is not much difference. By understanding this information investors can only understand the fundamentals of the listed company and have a simple overview, or a galance of the company's operating results.

In reality, however, the factors that determine share price movements do not arise only from the basic disclosures of listed companies. On the contrary, it is the information about listed companies that has been underestimated or ignored that has a significant impact on the share price movement of listed companies.

Listed company information includes information that is clear, information that is expected, and information that is unexpected. The unexpected information is more "destructive" than the expected information and the stock price fluctuation is more violent. Unexpected information often refers to known potential risks and returns and unknown real risks and returns.

As an investor, unknown information is unpredictable. Publicly disclosed informationis more difficult to grasp if the potential returns and risks are not discerned and understood through. Understanding rewards and risks should be the first goal when investors try to read and understand the quarterly reports of public companies. But how do investors find the "real gold" in the vast amount of information? And how do you identify and take advantage ofthe potential benefits and risks of quarterly reporting?

First, investors should look at the essence through the phenomenon of quarterly disclosure. The phenomenon is the public data and text description, while the essence is the source of data, calculation caliber, compilation methods, policies and systems, etc. The essence is more reflective of the pattern behind the data or text description. The essence is more reflective of the laws behind the data or text descriptions.

Secondly, emphasis should be placed on the textual description of information. Listed companies' quarterly text description is often more about summary, results, performance and past management ideas and less about the company's outlook, performance forecasts, future management ideas, and specific practices. Investors may wish to take a lighter view of the information that is heavy in color and take a thicker view of the information that is lightly mentioned with a few question marks. Compare with the company's own past performance and with the same industry to further understand the motives and reasons for disclosure of the listed company.

Generally speaking, to protect their own interests and maintain the market image, listed companies are more colorful is conducive to report positive market information. On the contrary the detrimental image of the company's information is not enough inked, especially the implicit risk of guarantees, mortgages, related transactions and so on. This kind of comprehensive information disclosure is very unfavorable for investors to understand. Investors may absorb positive signal and ignore risk signal when reading the quarterly report. In consequence, they make wrong value judgment, resulting in undue investment losses.

Third, focus on the impact of information on the stock price. Investor's first reaction is to generate questions about why when a stock rises or falls. The stock price performance is inevitably associated with the listed company reports. Timely, accurate and complete quarterly reports will give investors the answer. Also, these answers are largely dependent on the breadth and depth of disclosure of the quarterly reports of listed companies. When investors organically combine the stock price changes and quarterly, the probability of investment success will be greatly enhanced.

Finally, learn the necessary information reserve skills. The purpose of investors searching information is to use the information correctly. Correct use of information means not only the possession of information, but also to distinguish between information, and can summarize, organize, manage, understand the information, extract useful information in the finishing, flexible application in the market changes. Take the recent occurrence of avian flu in Southeast Asiaas an example. If investors can think of the impact of avian flu on economic life, they will think of the treatment and prevention of avian flu, and will also think of the listed companies associated with it.

Investor can figure out company management philosophy by understanding the characteristics of production and operation and the extent to which company have invested in research. The degree of flexibility of its operation reflectsits ability to react to the market and its competitiveness. Without adequate understanding of the listed company's financial statements, the opportunity for breaking information will be fleeting. This is why investors are always half a beat behind in understanding and grasping information, and the last to catch up.

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