In the Hong Kong stock market, in the U.S. stock market, and in many overseas markets, penny stocks are ubiquitous.

A-shares adhere to their own characteristics.

Direct delisting is enforced for stocks with a face value below 1 yuan, and the existence of penny stocks is not allowed.

The Chinese characteristic of penny stocks belongs to the era of ST (Special Treatment).

Once upon a time, ST was still the focus of market attention, and even at certain moments, it would become a subject of speculation.

Scarce shell resources, turning losses into profits, removing the hat, and turning the crow into a phoenix.

Dozens of limit-up boards, and even ST stocks with hundreds of yuan are emerging one after another.

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But in fact, in the past two years, ST has gradually faded out of sight, the frequency of speculation is not high, and there are not many stocks that are strange.

ST Zuojiang is the last glory of the entire ST sector, and since then, there is no ST market, only a field of penny stocks left.

Still listed, the ST Shenzhen Tiandi, with the smallest market value, is only 300 million.The vast majority of ST stocks have a market value of around 1 billion, which is essentially no different from penny stocks.

It can be said that in the past two years, the characteristic penny stock market of A-shares has taken shape.

With the introduction of new dividend rules and ST rules in 2024, the army of ST stocks is rapidly expanding.

From the original 100 or so, it has suddenly swelled to more than 200, with more than 70 new ones added in May alone.

There are even rumors that there may be 1,000 companies that will be labeled as ST.

Regardless of the size of the ST market and how many there will be in the future, this is a sign of the times.

So many ST stocks mean that the market is beginning to differentiate, and there is a clear classification between high-quality stocks and junk stocks, with an intention to distinguish and guide.

This indicates that the market has taken a solid step on the road to maturity.

There are still people asking if there are opportunities in ST stocks.After all, the fundamentals of some ST stocks are indeed not bad.

Whether it's losses or no dividends, they are all temporary, and the fundamentals will improve in the future.

One must learn to think about the ST sector from the perspective of capital.

Because the retail investor mindset does not lead to an increase in stock prices.

On the contrary, the probability of a stock with a large number of retail investors going up is actually relatively low.

Among ST stocks, there may be some hidden "big retail investors," but what they do is not short-term trading.

Traditional investment institutions, whether public or private, almost 100% directly exclude ST listed companies.

So in the end, apart from retail and large investors, there are only some small speculators left.

There are just a few simple reasons why capital does not speculate on ST stocks.

First, the profit effect is not good.There are uncooked ones of 10cm, 20cm, and even 30cm, so why buy the 5cm ones?

At least speculative capital is not interested in the 5cm ones; they rise too slowly.

The hype of topics has cycles, and each cycle lasts only so much time.

Buying ST stocks might not be enough for the hype, and the topic could cool down before you know it, making it difficult to sell.

ST stocks, with a 5% increase, cannot even rank in the top of the gain list, and many retail investors won't notice them, so who will take over the position?

Moreover, the market value of ST stocks is relatively small.

A small market value does make it easier to hype, but with a small market value, it's very difficult to collect shares.

Most STs are snatched up when the stock price has plummeted and the shares are being sold off; if it's a normal accumulation of shares, it would take a long, long time.

Few shares seem like a good thing, but in reality, it's not.

Major main funds are determined not to touch these stocks that don't even have shares.So, when the profit-making effect is not very good, ST stocks will be abandoned by a lot of capital.

Moreover, with more than 5,000 stocks in the market, why specifically speculate on these few hundred stocks with only 5cm?

Secondly, there are not enough followers.

The goal of speculation is to make money, and making money requires someone to take over the position.

For ST stocks, there are also not many followers, or to put it another way, there are not many people willing to take over the positions.

At least most retail investors are not very willing to take over the positions of ST stocks.

In fact, the number of retail investors who can play with ST stocks is less than 1/10.

In the past, there were fewer ST stocks, so the proportion of this group of people to ST stocks was not very small.

Nowadays, there are more and more ST stocks, which have divided the group of speculative traders.

After being divided, many ST stocks have no heat, and even the number of followers has obviously decreased.So, in the past two years, among the ST stocks, many have seen their daily average trading volume reduced to just a few million, with no capital participating at all.

There are even some *ST stocks with daily transaction amounts of only a few hundred thousand, completely abandoned, with no liquidity left.

The fewer people play with them, the fewer opportunities there are, and the less people touch them, the more they fall into a vicious cycle.

Thirdly, the risk of defying the wind to commit a crime.

Capital does not like to participate in ST because it does not want to defy the wind to commit a crime.

Although some listed companies are not ST because of performance bombs, but only because they do not pay dividends.

No performance risk does not mean that capital must speculate.

On the one hand, these ST stocks, there are not many people to cut the meat, and there are not many chips.

On the other hand, if you speculate against the wind and attract market attention, it is very likely that you will not be able to eat it and carry it away.

Nowadays, it is the policy that hopes to guide ST, to guide the market to pay more attention to performance and dividends, rather than companies that are not willing to give a penny.In a situation where the regulatory scrutiny is tight, forcing oneself to trade in ST stocks is akin to going against the policies.

Therefore, even those ST companies without the risk of delisting will see capital taking a detour.

After all, smart money has no need to take risks against the wind.

Fourthly, there is a significant risk of delisting.

ST stocks still carry the risk of delisting.

The high risk of delisting mentioned here, compared to non-ST stocks, still has a relatively high probability.

Nowadays, there are already dozens of companies delisting each year.

That is to say, more than one-fifth of ST companies will be eliminated annually, which is already a high proportion.

Of course, some companies with decent performance, which are ST due to non-distribution of dividends, do not carry the risk of delisting.

Those with actual losses are in a precarious situation.In the past, major shareholders were accustomed to selling assets to preserve the shell of the company. Now, the value of shell resources is extremely low, so such actions to preserve the shell have become less frequent.

As for mergers and acquisitions, they are even rarer.

This is because high-quality assets can now go public independently under the registration system, so why bother buying a shell with a lot of debt for restructuring? It's both troublesome and time-consuming.

Since the market has already defined the ST sector, it will be the penny stock sector of the A-share market in the future.

For investors, the best approach is to not participate or touch it.

Some people say that one can sift through the garbage to see if there is any gold.

I don't particularly recommend this approach.

After all, there are many toxins in the garbage, and one might not be able to return if not careful.

Without a discerning eye, how can one filter out the inferior? If one has a discerning eye, why not look for better opportunities in high-quality companies?In any market, maturity will gradually set in, and the process of survival of the fittest will inevitably occur.

It is always about preserving the best and eliminating the worst, always staying vigilant, and keeping pace with the changes of the times.

Act in accordance with the trend, and do not become a contrarian to the times.