Category: Money tips Release Date: 2007-06-10
â—?A-share market gained momentum from a serious underestimation of the fundamental value of the investment. Revaluation will be the 2006 Quote of the basic feature of the development of the main line and pulse Quotes.
â—?revaluation, M & A restructuring, growth is expected to market conditions such as the main line. From the entire industry chain of view, inter-industry stock price performance presented "Zuoyoukaigong" and "middle breakthrough" simultaneously "W"-type situation.
â—?A stock valuation levels are still very low after the maturity level of China's stock market price-earnings ratio between 18-23 times, the market has upside potential.
â—?Valuation Standards of domestic industries can cause distortions in the pricing is too low, weak industry pricing high. Automobile, steel, electric power, shipping, textile and garment industry, the advantages of A-share price is bound to rebound in the successive opened, thereby giving rise to the domestic stock market revaluation of the seductive path.
â—?Cycle sector's performance is expected to decline in stock prices be reflected, the effects will gradually dissipate; the second half of nearly 700 billion non-tradable shares traded, may lead to market volatility; new stock issue is a double-edged sword, high-quality super-large capitalization stocks listed on , the market will attract more incremental funding to reduce the impact of the market; brokerage margin trading business floodgates, it will activate the market transaction and slow down the pressure on the market uncertainties.
â—?In view of short-term incremental funding can not be increased rapidly, the market may continue to choose the pattern of shocks. If the rapid rise in the short term would be appropriate to lighten up.
â—?long-term perspective, should continue to focus on competitive industries revaluation, share reform of listed companies to repurchase birth and foreign strategic investment mergers and acquisitions, industrial development policy-induced growth is expected to reassess the values of class opportunities.
A valuation of stocks level is still very low, a reasonable level should be 18 - 23 times, has continued to rise in space
As of February 15, over 580 companies entered the stock reform, of which 380 companies completed the split share structure reform, stock reform of the price of an average more than maintained at 10:3, the total market valuation is further reduced.
In accordance with last year's third quarter results is estimated that all the A shares of the weighted average price-earnings ratio of 17 times, the card 50, the card 180, such as Shanghai and Shenzhen 300 Index components are weighted average price-earnings ratio of about 13 times. If you include a premium stock reform, the key component index of price-earnings ratio is only about 11 times, all A share price-earnings ratio is only 14 times.
In fact, although there are more than 580 companies to enter the share reform, but 200 have not been implemented share reform program. To change the company from the stock market performance, the share reform treasure hunting phenomenon has basically disappeared, stock change factors on the impact of stock prices generally in the stock price right after the implementation of reform gradually. Given there are still nearly 800 --- 1000 companies have not yet entered or completed share reform, reform of these companies after the stock market will further reduce the pricing level. It is estimated that the current level of the Shanghai index, if all companies to complete share reform, the overall market price-earnings ratio is still about 20% of the decline in space.
A-share market price-earnings ratio is the market standard has been the focus of controversy. In our view, China's securities market and reasonable price-earnings ratio should be between 18-23 times.
Valuation system for the domestic chaos, the phenomenon of lack of valuation standards, we have entered the case studies. The study found that in the current transition period, a reasonable level of price-earnings ratio of 18 times, fully mature at about 23 times. The price level and the United States, Japan's stock market price-earnings ratio comparable level, but also in line with the long-term rapid growth of China's economy, and has become the engine of world economic development realities.
Under the authority of the State economic sector is expected to, "Eleventh Five-Year" period, the national economy is expected to continue to maintain 8.5% growth rate. A share is currently 14 times, the main component index of around 11 times price-earnings ratio is still very low, both below 18 --- 23 times the theory of a reasonable level, but also with China's economy has continued to maintain a rapid growth are incompatible. Therefore, the main line revaluation of A-share market still has a bigger upside.
Revaluation widening price difference between the industry and seriously underestimated the car, steel or, textile, and electric power industries to wait for incremental funding to promote
From China's economic structure and international competition in the industrial division of labor perspective, resources, energy, raw materials, finance, public facilities, transportation, airports, ports and food and beverage, textile and garment is China's leading edge industries and has maintained a high growth rate. From the past seven years, return on investment, these industries, the highest rate of return on assets. However, due to China's stock market valuation system, the existence of a serious situation of copying the West, A stock market underpricing of China's dominant industries, most industries, the valuation of 15 times the level. By the macro-control since 2003, the impact of already low valuation of the steel, automobile and other industries, has emerged since the second half of 2004 has been a significant decline in the standard of the original price underestimated suffered heavy losses, the valuation levels further reduced.
Quotes of the order of resources as the main feature of the non-ferrous metals, petrochemicals, chemicals, finance and other industries, as well as characteristics of consumption of food, daily chemical industry, there has been a significant rise in the level of distortions in the pricing of certain rates of correct . However, the automobile, steel fell, civil aviation, electricity, shipping, textile and garment industries are still lower than the broader market gains.
Excess capacity, trade disputes, oil prices and other factors that could affect the profit decline in the level of the market to invest. We believe that the stock prices of listed companies in these industries is expected to rise in apparent, the main reasons for this:
The first value is the current revaluation of the fundamental characteristics of Quotes, with the valuation of listed companies, other industries raise the level of the industry pricing gap is widening, the market valuation of the level of the industry there is to narrow the gap between the inherent requirements;
Second, iron and steel, automobile, electric power and other industries shares had fallen significantly, excess capacity, falling profits of the uncertainties have been reflected in the current stock price, the original valuation underestimated the level of decline due to expected performance has been subjected to the pressure again, business value seriously underestimated;
Third, increasing car prices stable, the end of the first two months of this year, car sales up sharply. Variety of structural steel prices have stabilized and slightly rising trend;
Fourth, the country to vigorously promote the construction of rural infrastructure, and vigorously promote the construction of railways and other facilities, will further expand its iron and steel, cement and other basic raw material needs, while the improvement of transport infrastructure in rural areas is conducive to the further pick up the automotive industry;
Fifth, to expand production capacity will facilitate industrial restructuring, dominant enterprises will be able to strengthen the competitiveness of the enterprise's future value will be enhanced;
6 is the A-share market opening degree of the expansion, QFII quota to continue to expand, foreign and Hong Kong and Macao strategic investors into the A-share market, there are conducive to China's revaluation of the value of competitive industries and pricing levels. Because the focus of capital from overseas must be at the international and domestic competition, the Chinese have an advantage industries. The undervalued cars, steel, shipping, power, textiles and clothing will definitely favored by overseas investors;
7 is represented by the overseas auto industry, the transfer to China is bound for the related industries bring new opportunities for growth and enhancement of enterprise value.
Thus, there are substantial grounds for believing that the next one or two months, shares of listed companies in these industries will usher in a rising cycle of revaluation.
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