Research On The P/E Ratio And Its Influencing Factors In Chinese Stock Market

P/E ratio covers the two main factors of stock investment: stock price and income,and because of its simple calculation,it is one of the important indicators for investors to make investment decisions.At the same time,the P/E ratio is often used to assess the value of the company’s stock to determine the level of stock prices and the size of the company’s future earnings.It has also become an important reference factor for value judgment,risk judgment and investment decision in the stock market,and is also an important basis for the government to formulate relevant policies.There are many factors that affect the level of the stock price earnings ratio,and many experts and scholars have studied and analyzed it from different angles.The price earnings ratio is not an isolated index,domestic and foreign research have already studied the price earnings ratio.And there are also many studies about the impact factor of earnings.But in relative of Chinese stock market,whether the stock market price earnings ratio index can be used in the condition of our country? What is the correlation between the P/E and the influence factors? From the perspective of investors,this paper select index,industry price earnings ratio and net profit growth rate as the main factors to measure the correlation between the three factors related and the P/E to analyses and grasp of these three indicators and earnings relevance better,to understanding China’s stock market price earnings ratio better,to provide a basis for investors to make decision.This paper uses the descriptive statistical analysis,comparative analysis,correlation analysis and multiple regression analysis method,to analysis the current China earnings situation,to analyses the industry of Shanghai and Shenzhen A shares stock market earnings performance.We find that the size and industry characteristics are very obvious.And regardless of performance,size or industry,the basic situation of price earnings ratio is very different.To correlate coefficient of the index,the industry price earnings ratio,the net profit growth rate,we find that the P/E ratio is larger.Then we choose the stocks in Shanghai and Shenzhen as samples,selects the index,industry factors,net profit growth rate of three influence factors by regressionfactors and its influence in Shanghai and Shenzhen A shares earnings analysis empirical study,and find that overall credibility is relatively high.The price earnings ratio and net profit growth rate is generally negative;correlation between related industry earnings is positive.Therefore,to study the rate of earnings and three influence factor,this paper puts forward some suggestions to the stock market and investors to make investment decisions.Investors in the stock market,can combine the impact of earnings factor(index,industry price earnings ratio and net profit growth rate)to make a comprehensive analysis of the stock market.Industry state and risk management are very important reference factors.the author thinks that,we must make the stock market policy more standardized,reducing the stock market admittance threshold;improving the trading system of product structure,and strengthen information disclosure.To the enterprise management and organization system,stricter regulation and perfect the system of the securities market system can lead to more reasonable and perfect securities markets.And based on the research,on the issue for the future research this paper presents an outlook.