Valuation Level: P / E, Market Rate And Yield Of Treasury Bonds

Economic growth is expected to decline, and policy results are not as good as expected.

The A stock market has a high level of absolute valuation, but the relative level is reasonable.

We selected China's main board, small and medium sized boards and gem to compare the valuation level with the index of the major countries in the world. From the perspective of TTM, the absolute value of the index is higher than that of the main board, 17 times the motherboard, 56 times of the small and medium board, 70 times of the growth enterprise market, while the S & P 500 is 20 times, and Nasdaq 39 times.

05 years to now, the main board is 10 to 57, and the medium and small boards are 16 to 97.

For 29 to 151, the motherboard is slightly higher in the global scope, and the small and medium sized companies are the world's largest. For example, the PE range of the S & P 500 in the US is 11 to 27, and the Nasdaq market is 17 to 69.

If we look at the percentile level of the current PE (the quantile between the maximum and minimum), China's main board is 16%, the medium and small board is 51%, the gem is 35%, the US standard 500 is 59%, and the NASDAQ is 43%, China is at a relatively reasonable level compared with other countries.

From the perspective of LF, the absolute value is higher than that of the main board, 1.7 times of the motherboard, 4.5 times of the small and medium board, and 6.2 times of the gem, while the S & P 500 is 2.9 times and the NASDAQ 3.6 times.

05 years to now, the main board is 1.3 to 7.2, the small and medium board is 2.2 to 8.2, the gem is 2.3 to 12.7, the motherboard is slightly higher in the global scope, and the small and medium-sized creation is crowning the world. For example, the PB interval of the S & P 500 in the United States is 1.5 to 3, and the Nasdaq market is 1.7 to 1.7.

If we examine the percentile level of the current PB (the quantile between the maximum and minimum), the Chinese motherboard is 8%.

For 38%, the gem is 36%, the US Standard & Poor's 500 is 91%, and the NASDAQ is 84%. China is at a relatively reasonable level compared with other countries.

The overvaluation of the A share market is related to low interest rates and high profit growth.

Further examining the interest rate and profit growth rate and the matching degree of valuation, we know that the lower the interest rate and the higher the profit growth rate, the greater the estimated value.

First, we use the yield of the ten year treasury bond to represent the risk-free interest rate to compare the matching degree between valuation and interest rate.

At present, the interest rates of major countries in the world are at the lowest level in 05 years to now. The yield of China's ten year treasury bonds is 2.75%, which is only 11 BP short of the lowest 2.64% in history.

From the perspective of percentile, the current ten year treasury bonds in China.

At the lowest level in history, valuations are at an intermediate level in history, similar to most countries in the world.

By comparison, stock market valuations are not at the highest level in history, and are more attractive than bond markets.

Further consider the valuation and profit growth situation, although the gem and small and medium board valuation is high, but also has a higher net profit growth rate in the global scope. The first half of the 16 years of the gem in the first half of the year /15 net profit is 49%/25%, the small and medium board is 13%/13%, far higher than other global markets, such as the India stock exchange's 15 year net profit growth rate is 4.4%, the NASDAQ is 2.7%, most other countries are negative growth, which shows that the high value of China's A stock is supported by the high performance growth.