⊙Reporters Wang Lu and Zhao Yihui Starting yesterday, the Shanghai Stock Exchange Information Company website officially published the static price-earnings (P/E) ratio data for 22 industries of listed companies in the Shanghai market. In addition to the industry P/E ratios for the entire market, the data also includes segmented board industry P/E ratio information. The data shows that the corresponding static P/E ratios for the SSE 180, SSE 380 index sample stocks, and other segments are 12.64 times, 22.92 times, and 36.67 times respectively. The valuation situation of these three segments is clearly distinct, reflecting the increasingly clear three-tier blue-chip market structure of the Shanghai Stock Exchange, which is divided into classic blue chips, emerging blue chips, and potential blue chips.
According to reports, the static P/E ratio data for the 22 industries of listed companies in the Shanghai market, published this time, was calculated based on the annual report data from 2010, following the "Industry Classification Guidelines for Listed Companies" issued by the CSRC. This aims to effectively support the CSRC's implementation of the issuance system reform work, urging institutions to quote rationally, and promoting more transparent and rational pricing during the inquiry process. Notably, in addition to the industry P/E ratios for the entire market, the data also comprehensively and deeply depicts the current valuation situation of various industries in the Shanghai market across three levels: SSE 180 index sample stocks, SSE 380 index sample stocks, and other sectors (stocks in the Shanghai market excluding those in the SSE 180 and SSE 380 indices).
The data indicates that as of February 20, 2012, the financial insurance, transportation and warehousing, construction, and mining industries have relatively low P/E ratios at 10.27 times, 11.50 times, 11.95 times, and 13.96 times respectively. These industries mostly consist of large-cap blue-chip stocks in traditional industries. The number of stocks in these industries accounts for 35.56% of the SSE 180 index components, while their free-floating market capitalization accounts for 62.39%. On the other hand, the agriculture, forestry, animal husbandry, fishery, IT, food and beverage, and electronics industries have relatively high P/E ratios at 55.11 times, 48.33 times, 41.41 times, and 37.78 times respectively. These mainly consist of new-type industries and small-to-medium cap stocks, forming a stark contrast with the SSE 180 index sample stocks.
From this, it can be seen that the multi-layered blue-chip market structure of the Shanghai Stock Exchange is becoming increasingly clear. First, there are the classic blue chips represented by the SSE 180 index component stocks. These companies are characterized by large market capitalization, excellent performance, good liquidity, and stable development. They mostly belong to basic industries such as finance, traditional industries, and energy. Their P/E ratios are usually relatively low, they have strong dividend-paying capabilities, and their operating performance is relatively stable. Currently, the overall static P/E ratio for the 180 index sample stocks is 12.64 times, lower than the average static P/E ratio of 14.45 times for SSE A-shares. The price-to-book (P/B) ratio is 1.82 times, and as of the end of 2011, the dividend yield was 2.05%.
Second, there are the emerging blue chips represented by the SSE 380 index component stocks. These are characterized by moderate market capitalization, good growth prospects, strong profitability, and active trading. They are mostly leaders in niche industries and important supports for regional economic development. A considerable portion of these listed companies belong to emerging industry fields such as energy conservation and environmental protection, next-generation information technology, biotechnology, high-end equipment, new energy, and new materials. Although these companies do not yet meet the standards of classic blue chips, a group of classic blue chips will emerge in the coming years. Currently, the overall static P/E ratio for the 380 index sample stocks is 22.92 times, the P/B ratio is 2.19 times, and as of the end of 2011, the dividend yield was 1.05%.
For more detailed answers to journalists' questions, please see page two.