What are blockchain concept stocks and what is their function?

After being mentioned constantly in various industries in the past two years, blockchain is no longer a strange word, and "blockchain concept stocks" have emerged accordingly.

So, what are blockchain concept stocks and what are their functions?

What are blockchain concept stocks ?

Concept stocks refer to stocks with a special connotation, which is usually used as a stock selection and speculation theme, becoming a hot spot in the stock market. Concept stocks have specific names, such as financial stocks, real estate stocks, brokerage stocks, Olympic theme stocks, insurance stocks, etc.

Concept stocks are in contrast to performance stocks. Performance stocks need good performance to support their stock prices, while concept stocks rely on a certain theme such as asset restructuring, One Belt One Road and other concepts to cause market speculation on stock prices.

As a way of stock selection, concept stocks must be supported by good operating performance compared to blue chip stocks. Concept stocks are just a combination of stocks of the same type that are included in the stock selection targets based on the same topic.

For example, the Olympic concept refers to a general term for companies that have business opportunities related to hosting the Olympics, and the CCTV 50 concept stocks refer to the 50 stocks mentioned by CCTV.

As the name suggests, blockchain concept stocks refer to a class of stocks whose business is related to blockchain. Blockchain is currently a hot topic in the capital market. So, what blockchain concept stocks are there in A-shares?

Since there are many blockchain concept stocks, we will briefly introduce two of them first.

1. Jinyi Technology

Reason for selection: The company has currently carried out research on blockchain theory and applications in the field of intelligent transportation, and will conduct ETC and transportation big data blockchain research with professional institutions. Under the current background, it will combine national encryption technology with blockchain technology to ensure the security of data transmission and storage, the data cannot be tampered with, and the highway toll evasion is prevented, forming a chain of transactions and vehicle driving paths.

2. The Great Wall of China

Reason for selection: In 2017, the company relied on its strong technical reserves and perfect resource integration capabilities to dominate the emerging blockchain digital currency mining machine market. Its kilowatt-class Julong series power supplies took the lead, surpassing other competitors with a market share of nearly 80%, becoming the de facto benchmark product for high-performance power supplies for Chinese digital mining machines.

It can be seen that the reason why the above two listed companies are classified as blockchain concept stocks is because their business or part of their business is related to blockchain.

After a listed company is classified as a blockchain concept stock, its stock price will not only be affected by the company's own performance, but also by the policies of the entire blockchain industry, and will also attract the attention of more investors.

What is the role of concept stocks?

In the stock market, the intrinsic meaning of a concept is not just a summary of a certain stock category. Its extended meaning is a market consensus. The concept is a more positive and more affirmative voting consensus.

Investors will conduct very detailed analysis and research on the industrial background, investment opportunities and future prospects of concept stocks and express great confidence.

For example, the concept of the Internet. Before the Internet became a concept, stocks related to the Internet could at best be called a sector, which was a neutral definition, but the meaning changed after it became a concept.

Concept stocks have a very powerful advertising effect.

A stock may not be very attractive in itself, but once it is included in a certain concept, it will be closely watched by all investors.

For example, Shanghai Meilin initially made canned food, and later also produced some products such as mineral water. Its performance was mediocre, its industry was outdated, and few investors paid attention to this company.

In 1999, the company transformed itself into an Internet concept stock. It did indeed set up an e-commerce website, mainly selling its mineral water, so the stock immediately became the focus of common attention in the stock market.