Research On Influencing Factors Of P/E Ratio China's Pharmaceutical Industry

With the rapid development of pharmaceutical industry in recent years,medical stock is catching people's attention.Many investors analyse it and make investment.The P/E ratio is a common valuation method for investors.Nowadays,many scholars have researched and analyzed it.But different industries have their particularities.What are the main factors that affect the P/E ratio in the pharmaceutical industry?Fewer researchers do it.From the perspective of the pharmaceutical industry,this paper analyzes from both macro and micro points in order to find out the special factors affecting the pharmaceutical industry.Therefore,the topic of this paper has important theoretical and practical significance.In this paper,there are methods of qualitative and quantitative analysis are used.Firstly,the factors affecting P/E ratio are summarized.Then,according to the characteristics of China's pharmaceutical industry,the macro and micro factors that may affect the P/E ratio of the pharmaceutical industry are found out.In the macro points,we mainly use PEST analysis,and then with case analysis and correlation method to analyze the relationship between macro factors and P/E ratio.In microscopic aspect,according to the first-class classification of Shenyin Wanguo,14 variables are selected from the data of medical enterprises listed for more than five years from 2013 to 2017.In order to test if the factors influencing the P/E ratio of different markets are different or not,SPSS software is used to analyse the P/E ratio and the influencing factors of Shanghai and Shenzhen stock markets respectively through description,correlation and multiple linear regression analysis.The research shows that the pharmaceutical industry is sensitive to the government policy,and the favorable policy will promote medical stock to rise,and P/E ratio of enterprises to go up at the same time,and vice versa;the aging population and the total health fees affect the price-earnings ratio of the pharmaceutical industry in some degree;among the micro-factors,the return on net assets and the price-earnings ratio are significantly negative correlation,turnover rate and management fee rate show a obvious positive correlation with P/E ratio.Combined with the above conclusions,measures and suggestions are as follows:First,For investors,when choosing medical stocks,they should analyze the profitability of medical policies and enterprises,and take a rational view of management costs,according to the types and characteristics of different pharmaceutical enterprises to analogy of P/E;Second,Pharmaceutical enterprises should make strategic arrangements under market environment and policies,concentrate superior resources or layout the whole industry chain;Third,The supervision department should strengthen the information exposure system and follow up regulation of P/E ratio.