There is a well-known investment philosophy, that is, invest in a company with a moat  The general idea is that a company must have sufficient competitive advantages to resist the encroachment of other competitors on its own profitability  Investors can only invest in this way  Companies are likely to bring excess returns  However, moats often have traps, and the most common trap is market share  A higher market share is usually regarded by investors as the moat of the company, but practice has proved that this is not the case  Unreliable  Market share only illustrates the company's past performance, not the future
If there is not enough ability to resist foreign invasion, the company will have to maintain market share through price wars, and the result must be a sharp decline in profitability
Investors should consider both the profit margin and the company's market share