Evaluation of Chinese Semiconductor Companies’ Stock Based on Factor Analysis and Cluster Analysis

Abstract

The stock market has always played a very important role in the economy which could help to study the development and status of companies and even countries. With the continuous development of science and technology and the new prosperity of computing, telecommunication, banking, security, and manufacturing, the demand for semiconductor products is increasing, especially in China, which has become the world’s largest regional market. Due to some objective reasons like national policy support, large market space, the emergence of new industry types, the subdivision of the industrial chain, and the M&A wave, China's semiconductor industry prospects are very good. Therefore, this paper aims to provide some suggestions for different types of investors by dividing the stocks into different categories and summarizing their characteristics through the research on semiconductor stocks. This article selects 60 different stocks and 18 various indicators for research and adopts factor and cluster methods to analyse. Finally, it is found that these 60 stocks can be roughly divided into 4 groups and each category has its characteristics.