A-Share Screen for Profitable Small-Cap Stocks with Convertible Bonds

Summary

This A-share screening rule combines four filters: daily amplitude above 1%, market capitalization below 10 billion yuan, positive trailing net profit, and a nonempty convertible-bond name. The accompanying discussion presents the profit and size filters as ways to focus on smaller companies that are already profitable, while the amplitude condition adds a short-term price activity measure. It also provides formula and Python examples for implementing a screen, though their data fields and conditions are not fully consistent with the stated rule.

The article warns that the screen may exclude larger firms and unprofitable companies that could later grow. It suggests loosening the size limit or adding technical indicators. No backtest, performance figures, or evidence that these filters reduce risk is provided, so the claim of greater quality or stability remains untested. The convertible-bond requirement is also not explained as a source of investment advantage, and the rule alone does not specify portfolio construction or exit decisions.

Key ideas

• The screen requires amplitude above 1%, market capitalization below 10 billion yuan, and positive trailing net profit.
• It also requires a nonempty convertible-bond name.
• The article frames the size and earnings filters as a way to focus on profitable smaller companies.
• Its formula and Python examples do not align perfectly with the stated conditions.
• No historical performance evidence is supplied, and the rule may exclude larger or currently unprofitable firms.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.