China's chip listed companies' price-to-earnings ratio rankings: SMIC manufacturing industry reached 200.47 times

At the close of August 21, the three major A-share indices closed up today, with the Shanghai Composite Index closing at 3380.68 points, up 0.50%; the Shenzhen Component Index closed at 13478.00 points, up 1.18%. However, the semiconductor sector showed a downward trend. As of the close of August 21, the Jiwei Index closed at 4542.66 points, down 41.66 points from the previous trading day, a drop of 0.91%.

In fact, the semiconductor sector has been fluctuating and falling in recent times. From its peak on July 13 to August 21, the Jiwei Index fell by 18.04%, while the Shanghai Composite Index fell by only 0.08% and the Shenzhen Component Index fell by only 1.41%.

Looking back at 2020, the market value of semiconductor listed companies has always been a concern for relevant practitioners. The market value of the semiconductor sector has been soaring at the beginning of the year, but fell sharply in the second quarter, and then rose again in the middle of the year, and then fell in recent times. It can be said that there have been great ups and downs and huge fluctuations.

However, even so, the market value of the semiconductor sector has increased more than the overall market index since the beginning of the year. Compared with the beginning of the year, the Shanghai Composite Index rose by 10.84%, the Shenzhen Component Index rose by 29.21%, and the Jiwei Index rose by 51.42%.

The price-to-earnings ratio is one of the most commonly used indicators to evaluate stock price levels. The price-to-earnings ratio (P/E), also known as the price-to-earnings ratio, is the ratio of stock price divided by earnings per share. It is often used as an indicator to compare whether stocks of different prices are overvalued or undervalued.

Generally speaking, the lower the P/E ratio of a stock, the lower the market price relative to the stock's profitability, which indicates that the investment payback period is shorter, the investment risk is smaller, and the investment value of the stock is greater; otherwise, the conclusion is the opposite.

It is understood that for companies with normal profits, the P/E ratio is generally considered to be between 10 and 30. If the P/E ratio reaches more than 60 times, it is called the "death P/E ratio". At this time, the market or individual stocks have entered a stage of crazy growth, but this situation is difficult to sustain. The P/E ratio calculated for loss-making companies is a negative number, and this indicator has no reference value.

According to statistics, the average P/E ratio of semiconductor companies is 90.26 times, while the average P/E ratio of the entire A-share market is 38.14 times, which is 2.4 times (the average P/E ratio uses the median).

At the same time, compared with the international market, the average P/E ratio of the 30 companies in the Philadelphia Semiconductor Index is 32.92 times, while the average P/E ratio of the S&P 500 is 21.34 times, 1.5 times higher. Among them, AMD has the highest P/E ratio, reaching 288.56 times. It can be seen that technology stocks are generally favored in the global market.

According to Wind data, among the 112 semiconductor companies in the A-share market, 68 companies have a price-earnings ratio of more than 60, accounting for more than 60%, of which 21 have a price-earnings ratio of more than 200. There are 8 companies with a price-earnings ratio of more than 500, namely Zhenxin Technology (1560.72 times), Tongfu Microelectronics (793.12 times), Changchuan Technology (726.75 times), Changdian Technology (716.46 times), Beijing Ingenic (681.73 times), Tongyou Technology (658.09 times), China Micro Corporation (560.66 times), and Jucan Optoelectronics (520.90 times).

It is worth noting that 11 companies were in a loss-making state last year, so the P/E ratio indicator is not of reference value. Among them, the market value of Cambrian and Shanghai Silicon Industry exceeded 80 billion and 100 billion respectively.

From the perspective of sub-sectors, the equipment sector has the highest P/E ratio of 136.75, followed by packaging and testing with a P/E ratio of 120.39; the distribution sector has the lowest P/E ratio of 35.18.

Among each sub-sector, the highest P/E ratio in the design category is Zhenxin Technology at 1560.72 times, the highest in the manufacturing category is SMIC at 200.47 times, the highest in the packaging and testing category is Tongfu Microelectronics at 793.12 times, the highest in the IDM category is Jucan Optoelectronics at 520.90 times, the highest in the equipment category is Changchuan Technology at 726.75 times, the highest in the materials category is Ashi Chuang at 288.43 times, the highest in the electronic components category is Maxjet Technology at 128.72 times, and the highest in the distribution category is Runxin Technology at 142.56 times.