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 more and more people's attention.The P/E ratio is widely used in the valuation index of enterprise.To explore the value of enterprise,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?At present,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 key 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 which are used to analyze the influencing factors of the P/E ratio in the pharmaceutical industry.Firstly,the factors and classical theoretical model 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,PEST tool and case analysis method are mainly adopted to illustrate the macro influencing factors of P/E ratio of the pharmaceutical industry,and the correlation between them is analyzed by Pearson correlation.In microscopic aspect,according to the first-class classification of Shenyin Wanguo,quarterly data were selected from the data of medical enterprises listed for more than five years from 2014 to 2018 and by distinguishing Shenzhen and Shanghai stock markets to test their difference of P/E ratio influencing factors in different market.Secondly,9 micro-factor variables and 1 special factor medical policy were selected to establish the model.Then,Panel regression analysis for the overall sample and the two subsamples of Shanghai and Shenzhen and the panel type was judged by the Hausman test.Finally,the conclusion was drawn based on the related terms of correlation and multiple linear regression analysis in the model results.The study found:1.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.2.The population growth rate over 65 years old and the total health fees affect the price-earnings ratio of the pharmaceutical industry in some degree.3.Among the micro-factors,the return on net assets,gross profit margin and the P/E ratio are significantly negative correlation,net profit growth rate,management fee rate and turnover rate show a obvious positive correlation with P/E ratio.Based on the current domestic capital market situation and above research conclusions,this paper first suggests that the investors should pay more attention to the direction of pharmaceutical policy and the profitability of enterprises and focus on the impact of market turnover rate and management expense rate on the P/E.Second,Pharmaceutical enterprises should enhance technological innovation and improve the core competitiveness of the market.At the same time,Pharmaceutical enterprises should pay attention to differentiated strategic operations and strive for more market share.Third,The supervision department should make relevant policies to support enterprises in technological innovation,then strengthen the information exposure system and follow up regulation of P/E ratio.