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Banking Industry Valuation Analysis in the Context of China’s Listed Banks



Author(s)

Jinyu Tian, Yuman Le

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DOI:10.17265/1548-6583/2018.05.003

China’s stock market has experienced more than 20 years of development. Despite the concept of value investment has already been reflected in stock investment, many investors, especially small and medium investors, still do not pay much attention to value investment. Blindness and speculative thinking still affect investment. This paper chooses the banking industry as the analysis object and uses the relative valuation approach to evaluate the price-earnings ratio (P/E ratio), price-to-book value ratio (P/B ratio), and price-earnings to growth (PEG) of the 10 listed banks, then judges the investment value of each bank and focuses on the valuation and pricing of the banking with rapid growth. Based on this, the choice of value investment decisions is made, trying to provide a demonstration for investors to make value investment decisions. Finally, it is recommended to invest in China Merchants Bank (CMB), Minsheng Bank, Shanghai Pudong Development Bank (SPDB), Industrial and Commercial Bank of China (ICBC), HSBC Bank, and Bank of China. It is not recommended to invest in Ping An Bank, Bank of Communications, Industrial Bank, and China CITIC Bank.

bank stock value valuation, relative valuation method, investment value, P/E ratio growth rate