1. Classified by shareholder rights

Preferred stock

Preferred stocks are the symmetry of "ordinary shares."

It is a share issued by a joint stock company that has priority over ordinary shares when distributing dividends and remaining assets. Preferred stock is also a certificate of title with no maturity. Preferred stockholders generally cannot ask for a refund in the middle of the company (with the exception of a few redeemable preferred stocks).

The main characteristics of preferred stocks are three: First, preferred stocks usually have a pre-determined dividend yield. Since the preferred stock dividend rate is fixed in advance, the dividends of preferred stocks generally do not increase or decrease according to the company's operation, and generally cannot participate in the company's dividends, but the preferred stocks can receive dividends before the common stock. For the company, The dividend is fixed and it does not affect the company's profit distribution. Second, the rights of preferred stocks are small. Preferred stockholders generally do not have the right to vote and to be elected. They have no voting rights for the major operations of the company, but in some cases they can enjoy voting rights.

If the company's general meeting of shareholders needs to discuss claims related to preferred stocks, that is, the claims of preferred stocks precede the ordinary shares, and secondly to the creditors, the priority of preferred stocks is mainly manifested in two aspects:

(1) Dividends receive priority. The order in which dividends are distributed by the company is that the preferred shares are in the first place and the common shares are in the back. Regardless of the profit of the company, as long as the shareholders' meeting decides to distribute the dividends, the preferred shares can receive dividends at a predetermined dividend rate. Even if the dividends are generally reduced or not, the preferred shares should be distributed according to the dividends.

(2) Priority of remaining assets allocation. When a joint stock company is dissolved or bankruptcy liquidated, the preferred stock has the priority of the company's remaining assets. However, the priority distribution of the preferred stock is after the creditor and before the common stock. Only after the company’s creditor’s debt is paid off, the preferred stock has the right to distribute the remaining assets. Ordinary shares participate in the distribution only after the preferred stock claims.

There are many types of preferred stocks, and there are various classifications for priority muscles in order to accommodate the needs of some investors who want to gain certain priority benefits. The main categories are as follows:

(1) Cumulative preference shares and non-cumulative preference shares. Cumulative preference shares refer to the fact that if a company's earnings are not sufficient to distribute the required dividends in a certain business year, the shareholders of the preferred shares in the future will have the right to demand reimbursement for dividends paid in previous years. For non-cumulative preferred stocks, although the profits obtained by the company in the current year have the right to distribute dividends in preference to the common stocks, if the profits obtained by the company in the year are insufficient to be distributed according to the prescribed dividends, the shareholders of non-cumulative preferred stocks The company cannot be required to be reissued in the following years. In general, for investors, cumulative preferred stocks have greater advantages than non-cumulative preferred stocks.

(2) Participation in preferred stocks and non-participating preferred stocks. When the company's profits increase, in addition to enjoying the interest of a predetermined ratio, it can also participate in the preferred stock of profit distribution with the common stock, which is called “participating in preferred stock”. In addition to the established dividends, preferred stocks that are no longer involved in profit distribution are referred to as “non-participating preferred stocks”. In general, participation in preferred stocks is more favorable to investors than non-participating preferred stocks.

(3) Convertible preferred shares and non-convertible preferred shares. Convertible preferred stock refers to common stock that allows preferred stock holders to convert eugenic stocks to a certain amount under certain conditions. Otherwise, it is not convertible preferred stock. Convertible preferred stocks are a preferred stock that has become increasingly popular in recent years.

(4) Pleasable preferred shares and non-recoverable preferred shares. Recoverable preferred stock refers to a company that allows the issuance of such stocks to recover the preferred stocks that have occurred at the original price plus a number of compensation payments. This right is often exercised when the company believes it can replace a preferred stock that has occurred with a lower dividend. On the contrary, it is an uncollectible preferred stock.

There are three ways to recover preferred stock:

  <1>Premium method. When the company redeems preferred stock, it is carried out at a pre-specified price. However, because this often causes inconvenience to investors, the company often adds a “premium” to the par value of the preferred stock.

  <2>When a preferred stock occurs, the company raises a portion of the funds obtained to create a “solvent fund” that is designed to redeem a portion of the preferred stock that has been issued on a regular basis.

  <3>Conversion method. That is, preferred shares can be converted into ordinary shares as required. Although the convertible preferred stock itself constitutes a type of preferred stock, in the foreign investment community, it is often seen as a form of actual withdrawal of preferred stock, but the initiative to recover this is in the investor and not in the company. In the case of investors, it is very advantageous to do so when the market price of common stocks rises.

2. Common stock

Common stocks are the symmetry of “preferred stocks”, which are a kind of stock that changes with the change of corporate profits. It is the most common and basic stock in the company's capital composition, and is the basic part of the funds of the joint-stock enterprises.

The basic characteristic of common stocks is that the basic investment interests (dividends and dividends) are not agreed upon at the time of purchase, but are determined after the facts based on the operating stock of the stock-generating company. The company’s operating profit is good, and the proceeds of common stock are traded; The actual product difference is low, and the income of ordinary shares is low. Ordinary shares are the most important and basic shares in the capital structure of a joint stock company. They are also the most risky shares, but they are the most basic and most common ones in stocks.

Generally, the characteristics of common stock can be summarized as follows:

(1) Shareholders holding ordinary shares are entitled to dividends, but must be paid after the company has paid dividends and dividends on preferred stock. The dividends of common stocks are not fixed and generally depend on the company's net profit. When the company is well-managed and the profits continue to increase, the common stock can be more dividends than the preferred stock, and the interest rate can even exceed 50%. However, if the company is not in good business, it will not even get a penny. Maybe even lost this.

(2) When the company is liquidated due to bankruptcy or closing of business, the ordinary shareholders have the right to share the company's remaining assets, but the ordinary shareholders must be able to obtain the property after the company's creditors and preferred shareholders, and the property is overtime, less time, less points, If you don't, you can only give up. It can be seen that the common shareholders and the fate of the company are more closely related, and the common and the bad. When the company is profiteering, ordinary shareholders are the main beneficiaries; when the company loses, they are the main losers.

(3) Ordinary shareholders generally have the right to speak and vote, that is, they have the right to speak and vote on major issues of the company. Ordinary shareholders hold one share of voting rights, and two holders have two shares of voting rights. Any ordinary shareholder is eligible to participate in the company's top-level meeting of the annual general meeting, but if you do not want to participate, you can also entrust an agent to exercise their voting rights.

(4) Ordinary shareholders generally have a stock option. When the company issues new ordinary shares, the existing shareholders have the right to purchase the newly issued shares with priority (possibly also at a low price) in order to maintain the original percentage of the company's ownership. To maintain their rights in the company. For example, if a company has 10,000 ordinary shares and you own 100 shares, accounting for 1%, now the company decides to issue 10% of common shares, that is, 1,000 shares, then you have the right to buy one at a price lower than the market price. % is 10 shares in order to keep the proportion of your stocks unchanged.

When issuing new shares, shareholders with pre-emptive rights can exercise their stock options, subscribe for newly issued shares, and sell or transfer their stock options. Of course, when shareholders believe that it is unprofitable to purchase new shares, and it is more difficult or profitable to transfer or sell the stock options, they can also let the stock options expire and become invalid. When a company provides stock options, it generally stipulates the date of equity registration. Only when the shareholders register and pay the shares within that date can they obtain the stock options and give priority to the new shares.

Usually, such stocks registered for registration on the registration date are also called attaching stocks. Relatively, the votes purchased after the date of stock registration are called ex-rights stocks, that is, stocks are no longer attached with stock options. In this way, the investment in the stock after the date of the equity registration is no longer attached to the stock option. In this way, investors who purchase stocks after the date of equity registration (including the old shareholders) will not be entitled to purchase stocks at a low price. In addition, in order to ensure the rights and interests of ordinary equity, some companies may also have warrants that can be in a certain period of time ( Or a permanent certificate of purchase of a certain number of ordinary shares at a certain price. The general company's warrants are issued together with stocks and bonds, which can attract more investors.

In summary, it is not difficult to see from the first two characteristics of common stock that the dividends and residuals of common stocks may have a large ups and downs. Therefore, ordinary shareholders have the greatest risk. In this case, ordinary shareholders are of course more concerned about the company's operating conditions and development prospects, and the latter two characteristics of common stocks just make this wish a reality, providing and guaranteeing the rights of ordinary shareholders to care about the company's operating conditions and development prospects. s method.

However, it is also worth noting that when investment shares and preferred stocks are publicly offered to general investors, the company should make investors feel that common stocks can obtain higher dividends than preferred stocks. Otherwise, ordinary stocks are risky in investment. You can't get more dividends than preferred stocks, so who else is willing to buy ordinary stocks! In general, the company issues preferred stocks, mainly for “insurance-safe” investors. For those investors who are more “adventurous”, ordinary stocks are more attractive. In short, the issuance of these two different types of stocks aims to attract more capital with different interests.

3. Rear allotment

The post-allotment is a stock that is inferior to the common stock when the interest or interest dividend is distributed and the remaining property is distributed. Generally, after the distribution of the common stock, the residual interest is redistributed. If the company's profit is huge, and the number of shares issued after the rights issue is very limited, the shareholders who distribute the shares after the purchase can achieve high returns. After the issuance of shares, the funds raised generally cannot directly generate income, and the scope of investors is limited, so the utilization rate is not high. After the allotment is usually issued under the following circumstances:

(1) When the company issues new shares to raise funds for the expansion of equipment, in order not to reduce the dividends on the old shares, the new shares will be issued as a post-allotment before the new equipment is officially put into use;

(2) When the enterprise merges, in order to adjust the merger ratio to the north, a part of the post-allotment is delivered to the shareholders of the merged enterprise;

(3) In a company with government investment, the shares held by the government are used as post-allotment shares before the privately held stocks reach a certain level.

    2. Classified by face shape

Registered stock

When the stock is issued, the name of the shareholder is recorded on the ticket and is recorded on the company's register of shareholders.

The characteristic of a registered stock is that no one can exercise its shareholding except the holder and its official attorney or legal heir or recipient. In addition, the registered stocks cannot be arbitrarily transferred. When transferring, both the name and address of the transferee should be recorded in the stock coupon, and the transfer procedure should be carried out on the company's shareholder register. Otherwise, the transfer cannot take effect. Obviously, this stock has the advantage of being safe and not afraid of losing, but the transfer procedure is cumbersome. If such stocks need to be transferred privately, such as the act of inheritance and gift, they must go through the formalities of transfer immediately after the transfer.

2. Bearer shares

When such stocks are issued, the names of the shareholders are not recorded on the stocks. The holders can transfer their own shares. Anyone who owns the shares will enjoy the rights of the shareholders, and there is no need to prove their own shareholder qualifications through other means or means. This stock transfer procedure is simple, but it should also be transferred through legal transactions in the securities market.

3. Denomination shares

There are par value stocks, abbreviated as stocks or denominations, which means that certain amounts are recorded on the stocks, such as RMB 100 and RMB 200 per share. The amount of stock gives the stock a face value, so that it is easy to determine the proportion of each share in the company. 4. No par value shares

Also known as proportional stock or no-denomination stock. There is no par value in the issuance of stocks, only the proportion of each share of capital. Its value increases or decreases as the company's assets increase or decrease. Therefore, the intrinsic value of such stocks is always in a state of flux. The biggest advantage of this kind of stock is that it avoids the deviation between the company's actual assets and the face-to-face assets, because the face value of the stock is often vain. People care not about the stock's face value, but the stock price. The issuance of such stocks is extremely demanding in terms of corporate management, financial accounting, and legal liability. Therefore, it is only popular in the United States, and many countries do not allow distribution at all.

3. Classification of investment entities by shares

The shares of listed companies in China can be divided into state-owned shares, legal person shares and social public shares. State-owned shares refer to the shares that the state or institution that has the right to invest on behalf of the state invests in the company, including shares converted into the company's existing state-owned assets. Since most of the joint-stock enterprises in China are reformed from the original state-owned large and medium-sized enterprises, state-owned shares account for a large proportion of the company's equity.

A legal person's stock refers to a share formed by an enterprise legal person or a public institution with legal person qualifications and a social group that invests in the non-listed shares of the company with assets that can be operated according to law. At present, legal person shares account for about 20% of the shareholding structure of listed companies in China. According to the object of subscription of legal person shares, the legal person shares can be further divided into three parts: domestic legal person shares, foreign legal person shares and legal person shares. Social public shares refer to the shares formed by individuals and institutions within the territory of China, with their legal property invested in the company's shares that can be listed and circulated. China's state-owned shares and legal person shares are currently not listed for trading. National shareholders and legal person shareholders who want to transfer equity may, within the scope permitted by law, sign a transfer agreement with the qualified institutional investor with the approval of the competent securities department to complete the transfer of the bulk equity in one lump sum. Since the share of state and legal person shares accounts for more than 70% of the total share capital, in most cases, to obtain a controlling stake in a listed company, the acquirer needs to transfer the bulk equity from the original state shareholders and legal person shareholders. Except for a limited number of company employee shares, internal employee shares and distribution shares, most of the public shares can be listed and traded.

4. Classified by listing location

The stocks of listed companies in China have the distinctions of A shares, B shares, H shares, N shares, and S shares. This distinction is based primarily on the location of the stock and the investors it faces.

The official name of the A share is the ordinary stock of the RMB. It is issued by a company in China for domestic institutions, organizations or individuals (excluding Taiwan, Hong Kong and Macao investors) to subscribe and trade common stocks in RMB. The official name of the B shares is RMB special stock. It is listed in Renminbi in Renminbi, subscribed and traded in foreign currencies, and is listed and traded on domestic (Shanghai, Shenzhen) stock exchanges.

Its investors are limited to: natural persons, legal persons and other organizations in foreign countries, natural persons, legal persons and other organizations in Hong Kong, Macao and Taiwan, Chinese citizens who have settled abroad, and other investors stipulated by the China Securities Regulatory Commission. At this stage, the investors of B-shares are mainly institutional investors in the above categories.

The B-share company's place of registration and listing are in the territory, but investors are overseas or in Hong Kong, Macau and Taiwan. H shares, that is, foreign shares registered in the Mainland and listed in Hong Kong. Hong Kong's English is Hong Kong, which takes its prefix. Hong Kong-listed foreign shares are called H shares. By analogy, New York's first English letter is N, Singapore's first English letter is S, and New York and Singapore listed stocks are called N shares and S shares.

5. Classified by company performance

The blue-chip stocks are the stocks of high-performing companies, but the definition of blue-chip stocks is different at home and abroad. In China, the main indicators for investors to measure blue-chip stocks are after-tax profit per share and return on net assets.

Generally speaking, the after-tax profit per share is in the middle position of all listed companies. The stocks with a net return on equity after listing for more than 10% for three consecutive years are among the top-performing stocks. In foreign countries, blue-chip stocks mainly refer to large company stocks with good performance and stability. After a long period of hard work, these large companies have achieved a high market share in the industry, forming a business scale advantage, a steady increase in profits, and a high market awareness.

The blue chip stocks have a high return on investment and investment value. Its company has the advantages of capital, market, reputation and other aspects, and has strong and easy-going adaptability to various market changes. The stock price of blue-chip stocks is generally relatively stable and has a long-term upward trend. Therefore, blue-chip stocks are always favored by investors, especially those who are engaged in long-term investment. Corresponding to the blue chip stocks, junk stocks refer to the stocks of companies with poor performance. Such listed companies may even enter the loss ranks due to poor industry prospects or poor management.

The performance of its stocks in the market is sluggish, stock prices are lower, trading is not active, and dividends at the end of the year are also poor. When investors consider choosing these stocks, they must have a higher risk awareness and should not blindly follow the trend.