Factor Analysis Investment Industry In China's Stock Market Value Evaluation

In the security investment, industry analysis is a very important link of value investment, the establishment of industry estimate index system is an effective method of carrying on the industry analysis. The quantification of industry estimate indexes is the premise of reflecting the industry investment value more accurate and objective. One key point of making the index system effective is the selection of indexes and weight assignment.This paper estimates the investment value of the industry from two aspects, the company current finance condition and the industry background condition. The industry background conditions may determine the company's future growth and the profit condition in the industry. The company current finance conditions in the industry reflect all of the company's profit, development, operational and the financial risk condition in present, and all the company's historical and present level development of the industry.This paper first introduced the basic theory and the general analysis method of industry analysis. The factor analytic method was introduced on the foundation of general analytic method. The factor analytic method can make up the general analytic method and other synthesis analytic methods' insufficiencies; After the building of index system, the data of the middle period of 2005 of some industries and the corresponding company of domestic stock market was analyzed by factor analytic method The order of all industries' investment value was given which represents the relative investment value of the industry, from which it can be seen that the index system is reasonable.Finally the entire analysis system was consummated through analyzing the influence that the sample data selection method produced to the factor analysis result.