Ideally, it is difficult to say "no" to the "price war"

$Nasdaq100 Bull 3X ETF(TQQQ)$ and $Nasdaq100 Bear 3X ETF(SQQQ)$ At the beginning of the release of the Q2 financial report in 2023, the market generally believed that this was still a good result (sales volume and profit are within expectations), but after the opening of the day, the stock price did not "surge" as scheduled, and even ended in a "fall", which undoubtedly hit the bulls.

Many friends began to go backwards from the results again: there must be a reason for the market to give such feedback. After that, the proportion of "bad views" in the market increased significantly, most of which focused on topics such as "future growth" and "industry volume".

In our daily analysis, we often face the confrontation of the two major views of "market effectiveness" and "market ineffectiveness". The former believes that every move of the market has its inevitability, while the latter believes that the market is often ineffective and cannot be overly worshipped.

The two university factions are not convinced of each other, and each has its own fans, which has also been shown in this ideal financial report.

The core point of this article:

First, the leap in the ideal valuation capacity began in October 2022. At this time, it coincided with the L9 delivery period, and the sales scale of enterprises began to be ahead of similar enterprises. The ideal$XPeng Inc.(XPEV)$  car manufacturing explosion effect is outstanding, which is an important reason for the rise of the ideal stock price so far;

Second, the trend of price reduction in the industry is getting worse and worse (even if the industry association calls for no avail). Compared with the "activity" of NIO and Xiaopeng on price reduction, the ideal is much colder to the price reduction, but the pricing center of its new car has gone down, and the sluggish factors in the industry have affected the ideal business strategy If it cannot be improved, the pricing ability of new cars in the ideal future will continue to be challenged;

Third, when the uncertainty of U.S. stocks increases, it is difficult to "clean up yourself" as the representative of growth stocks. The decline of stock prices is not entirely a projection of business fundamentals, but also caused by liquidity factors that we often ignore. Instead of arguing whether the market is effective or ineffective, it is better to reflect on whether our own analysis framework is perfect .

The sharp rise in the stock price coincides with the sale of new cars.

We first sorted out the stock price rise and fall of the new car manufacturing forces (NIO, Ideal$Li Auto(LI)$ , Xiaopeng) and the Golden Dragon Index since September 2020 (the starting point is set to "1"), as shown in the figure below:

Stimulated by the release of the global central bank and China's industrial policy, new car-making enterprises have created a lot of capital myths in the past. In the short term, the stock price rose several times, significantly outperforming the Zhongshi Jinlong Index. These enterprises also became the darlings of investors at that time, and the heat has not dissipated until now.

The good times are not long. Since the Federal Reserve began to raise interest rates in 2022, the market value of the above-mentioned enterprises has plummeted. At the beginning of the interest rate hike, although the stock prices of the three major enterprises rose and fell differently, the pace was roughly the same (basically synchronously rose and fell). It was not until October 2022 that the .

After that, the ideal stock price returned to the highlight of history, while NIO $NIO Inc.(NIO)$ and Xiaopeng showed a growth bottleneck, falling into the mud with the general market.

We noticed that this coincided with the delivery period of the ideal L9, and the delivery volume of its new car began to be significantly ahead of the other two companies. If the price is based on growth expectations, the ideal is to obtain a higher market pricing capacity (for example, the market sales rate begins to rise), so as to leverage the market value.

The business data and the performance of the capital market are mutually verified, and the market shows the effectiveness side here. Later, as L8, L7 and other models entered the delivery period one after another, the advantages of the ideal good at creating "hot models" have been fully affirmed, which are also reflected in the market's pricing strategy: giving enterprises full premium ability. At this time, the ideal began to outperform similar enterprises.

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