"Street stalls" became popular once during the early stages of reform and opening up. Many entrepreneurs who ventured into business started with "setting up stalls." The term "Beijing speculators" spread far and wide. Therefore, when policies once again encourage the "street stall economy," it is understandable that it sparks endless daydreams among many people. However, it is thought-provoking that such daydreams can spread to the capital market, causing significant price increases in the stocks of certain listed companies, and even the development of "street stall economy concept stocks."

Can the "street stall economy" really significantly boost the profits of a listed company?

Recently, the "street stall economy concept stocks" have emerged in the stock market. Most companies that can be associated with street stalls have welcomed limit-up boards, and even several consecutive limit-up boards. For example, Maoye Commercial has gained 4 limit-up boards because the company's stake in a subsidiary has rental space for stalls. Yindu Shares also had 4 consecutive limit-up boards, mainly because the company's main business is the production and sales of catering equipment. Both companies subsequently issued announcements. Maoye Commercial stated that although some of the company's stores can be used to add stalls and selling points, it is expected to have no significant impact on the company's performance in 2020. Yindu Shares also stated that the company's main customers are hotels, restaurants, and supermarkets, etc., and the proportion of "street stall economy" related customers in the company's sales is small, with a lower gross margin, and it is expected not to have a significant impact on the company's future revenue and profit growth. In addition, Zhejiang Yongqiang's stock price immediately hit the limit-up board because it responded to investor inquiries by stating that it has straight umbrellas, sunshades, and metal tables and chairs that can be used for street stalls and other outdoor venues. Xiangjiang Holdings also had two consecutive limit-up boards because the investment supervisor believed that there were stalls available for rent. Wuling Motors' stock price also rose significantly because it launched a new model specifically for setting up stalls. Even the stock prices of bicycles like Phoenix and Forever soared, with the logic being that investors believe bicycles will be used as a means of transportation for setting up stalls. These stock price increases have brought tangible benefits to the major shareholders of the companies, with their net worth increasing by hundreds of millions to tens of billions of yuan.

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Summarizing the reasons for the significant increase in stock prices, there are mainly two: one is that there is space available for rent to "practice stall" small traders, and the other is that there are tools that can be sold to small traders for setting up stalls. But can these really bring significant improvements to the profits of these listed companies? As Maoye Commercial and Yindu Shares said in their announcements, these businesses account for a very small proportion of their main business, and the gross margin is low, which will not bring a significant impact on their business income and profits. A careful analysis can also clearly understand this truth. The financial strength of small traders is very low, and setting up stalls is based on the advantage of low cost. Therefore, the rent for the space used for setting up stalls must not be too high, and the price of the tools sold for setting up stalls will not be too high, and the gross margin of these products will definitely be low. In addition, even if the street stall economy will become popular, the space for rent is limited, and the number of small traders is also limited. Therefore, the rent and the tools for sale for setting up stalls cannot bring a significant increase in business income for a listed company, at least not comparable to the recent increase in the market value of these companies.

What is the trend?

Lei Jun, the founder of Xiaomi, once said, "On the trend, pigs can fly." From this sentence, it is not difficult to understand what can become a real trend. First, the wind must be strong enough to blow up the pig; second, the wind must be able to last long enough, otherwise it can only blow the pig down and not up. So, what is the real trend? For example, the previous Internet has not only made Bill Gates the world's richest man but also created numerous Internet famous companies. Sohu, NetEase, Sina, and Tencent are all industry leaders blown up by the Internet trend. The recent smartphone has made Apple, Samsung, and Huawei successful, and the next 5G interconnection and intelligent manufacturing will also bring a big trend growth. Therefore, the trend must be a general trend that can bring a revolution to a certain range of economy and society.

Is the "street stall economy" a trend?

The "street stall economy" still has a long way to go to become a trend. At present, the street stall economy can bring a faster employment channel for the people, and it can also bring the long-lost smoke to the consumers who visit the street stalls, and it can also stimulate consumption and stimulate the economy. However, the power of the "street stall economy" is not strong enough. Street stalls are not the first time they have appeared. Before the street stalls were not managed, they were also very popular. The noise downstairs until the early morning seems to be in the ears, and the garbage all over the ground the next morning is also vivid. But the most popular street stalls did not bring much economic growth, and the disappearance of the street stalls after the management did not cause much loss to the economy. Now, the possibility of recalling the street stalls to bring a big industry growth is not very big.

In addition, if the "street stall economy" wants to last for a long time, it still needs a lot of policy output and standardized development. The reason for managing the street stalls at that time was not without reason. The troubles brought by the street stalls to the residents' life and the urban style are deeply felt by everyone. How to prevent the street stalls from becoming a thing that everyone loves and hates again requires the continuous efforts of the practitioners. Practitioners should pursue low cost while improving quality and pursuing style improvement, making the street stalls a beautiful scenery line, especially in the food industry, and not allowing dirty and unhygienic to become the pronoun of the street stalls. Only by making unremitting efforts can the street stall economy be truly promoted for a long time and become a trend that improves the economy and the living standards of the people.

The above content only represents personal opinions and is not as investment advice.Please provide the text you would like me to translate into English.