Equity Premium Puzzle in Cambricon: Evidence from Behavioural Finance

Zhixuan Li, Weifeng Tian

2025

Abstract

The stock premium effect in high-tech industries often deviates from the market effectiveness and investor rationality emphasized by traditional financial theories. Based on behavioural finance theory, this study analyses the premium effect of Cambricon, a leading Chinese AI chip company listed on the Science and Technology Innovation Board (STB). Using financial indicators (e.g., negative price-to-earnings ratio, 58.03 times issue price-to-sales ratio), investor sentiment indices (e.g., Baidu search index) and institutional trading data (2020-2025), the study finds that irrational factors-such as the herd effect, sentiment bias and narrative-driven speculation (e.g., the “AI chip localization") drive high stock premiums to some extent. The results suggest that the concentration of institutional positions and retail followers' behaviour together drive this phenomenon, and the sentiment resonance mechanism exacerbates price distortions. The study proposes regulatory reforms (e.g., dynamic position disclosure thresholds, ETF rule optimization) and institutional strategies (e.g., long-term performance assessment) to curb speculative bubbles. These findings reveal the role of behavioural factors in shaping tech stock premiums and provide a practical framework for stabilizing high-volatility markets.

Paper Citation

in Harvard Style

Li Z. and Tian W. (2025). Equity Premium Puzzle in Cambricon: Evidence from Behavioural Finance. In Proceedings of the 2nd International Conference on E-commerce and Modern Logistics - Volume 1: ICEML; ISBN 978-989-758-775-7, SciTePress, pages 30-37. DOI: 10.5220/0013832200004719

in Bibtex Style

@conference{iceml25,
author={Zhixuan Li and Weifeng Tian},
title={Equity Premium Puzzle in Cambricon: Evidence from Behavioural Finance},
booktitle={Proceedings of the 2nd International Conference on E-commerce and Modern Logistics - Volume 1: ICEML},
year={2025},
pages={30-37},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0013832200004719},
isbn={978-989-758-775-7},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 2nd International Conference on E-commerce and Modern Logistics - Volume 1: ICEML
TI - Equity Premium Puzzle in Cambricon: Evidence from Behavioural Finance
SN - 978-989-758-775-7
AU - Li Z.
AU - Tian W.
PY - 2025
SP - 30
EP - 37
DO - 10.5220/0013832200004719
PB - SciTePress