Author(s)

Su Kecheng

Corresponding Author

Su Kecheng

ABSTRACT

Quantitative investment is a necessary tool for scientific investment. In this research, it focuses on the issue of influencing factors of P/E ratio (short as P/E ratio) in the stock market. Profitability, growth ability, solvency, cash flow, capital structure, circulation scale, and turnover rate are selected as the influencing factors, respectively. Panel data of listed companies in Shanghai and Shenzhen A-share markets from 2009 to 2020 are selected. Through this empirical research, the following have been concluded. First, the profitability and growth ability of listed companies have a negative impact on the P/E ratio. Second, both circulation scale and turnover rate promote the P/E ratio. Third, executive compensation and executive shareholding ratio have significant negative impact on financial market performance. Fourth, company size and listed years have negative effects on P/E ratio. Fifth, there are discrepancies among the analysis results of Shenzhen Stock Exchange (short as SZSE), ChiNext stock market and Shanghai Stock Exchange(short as SSE).

KEYWORDS

P/E ratio; Investment value; Quantitative investment; Capital market