Under the background that the P / E ratio of the main A-share index is at a low position in the past year, the number of companies with a discount non P / E ratio (TTM, the same below) of less than 10 times has increased from 130 in the same period last year to 218.
low P / E ratio companies exceeded 200
According to the data, as of the closing on February 28, 218 A-share companies had a non deductible P / E ratio of less than 10 times, compared with 130 in the same period last year.
From the statistical data, 91 companies have a non deduction P / E ratio of less than 7 times, of which 36 are less than 5 times. The non deduction P / E ratio of Risesun Real Estate Development Co.Ltd(002146) , Intco Medical Technology Co.Ltd(300677) and other companies is even less than 3 times.
the Research Report of China International Capital Corporation Limited(601995) strategy team shows that the forward P / E ratio of Shanghai and Shenzhen 300 has dropped to 10.6 times, which is significantly lower than the historical average of 12.6 times.
Specifically, companies with a non P / E ratio of less than 10 times are mainly concentrated in banking, real estate, steel and other sectors, 38, 35 and 24 respectively. In addition, there are 22 in the transportation sector, 21 in the construction sector and 14 in the coal sector. Among them, companies with low P / E ratio in banking, steel and coal sectors account for a large proportion of the total number of Companies in this industry, accounting for 90%, 52% and 38% respectively.
It is worth mentioning that, from the perspective of performance, among the 218 companies with low P / E ratio mentioned above, 81 have disclosed the performance forecast of 2021, of which the advance increase is the main theme, reaching 62, and another 2 have achieved turnaround. From the perspective of dividend yield, as many as 127 companies with low P / E ratio have a dividend yield of more than 3% in the last 12 months. Among the 127 companies, 56 companies have a dividend yield of more than 5%, of which Yango Group Co.Ltd(000671) , Jiangsu Zhongnan Construction Group Co.Ltd(000961) , Fangda Special Steel Technology Co.Ltd(600507) and other companies have a dividend yield of more than 10%.
business cycle is also “underestimated”
From the perspective of the distribution of low P / E ratio groups, they are not all in a weak cycle, and the stocks entering the business cycle are also in the stage of “killing valuation”.
Statistics show that under the background of tighter wood pulp supply, warmer downstream demand and rising pulp and paper prices month on month, there are still Shanying International Holdings Co.Ltd(600567) , Shandong Chenming Paper Holdings Limited(000488) , Shandong Bohui Paper Industry Co.Ltd(600966) , Shandong Sun Paper Co.Ltd(002078) , Shandong Huatai Paper Industry Shareholding Co.Ltd(600308) .
Zheshang Securities Co.Ltd(601878) research report said that since the first quarter of 2022, due to the repeated impact of overseas epidemic on the supply chain, the export performance of finished paper slightly exceeded expectations, and the industry inventory was also at a low position (the inventory days of double offset paper / coated paper / white cardboard enterprises in January were 20 / 29 / 19 days respectively, close to the lowest position since 2021). In addition, a new round of price increase letters were successively issued for pulp paper varieties, and the prices of major paper enterprises ranged from 200 to 300 yuan / ton in early March. Considering that the short-term rising power of pulp is sufficient and the industry inventory is close to the historical low, it is expected that the price rise of pulp paper will fall in this round.
Some light industry analysts believe that the industry is in a new round of dividend period at this stage, but objectively speaking, this round of price increase may more belong to the profit repair at the bottom of the cycle, which is the result of the improvement of the margin of supply and demand plus the cost support, rather than the large cycle level in early 2021. The overall rhythm is relatively more moderate. However, with the gradual implementation of the price increase, the industry profit may gradually rise, especially the improvement of the fundamentals of the leading enterprises in the subdivided field of paper enterprises, or the valuation reversal may usher in.
Among the above five paper enterprises, Shandong Bohui Paper Industry Co.Ltd(600966) and Shandong Sun Paper Co.Ltd(002078) disclosed the performance express in 2021, of which the revenue of the former in 2021 was 16.276 billion yuan, a year-on-year increase of 16.41%; The net profit was 1.705 billion yuan, a year-on-year increase of 104.44%. The latter’s revenue was 31.874 billion yuan, a year-on-year increase of 47.64%; The net profit was 2.941 billion yuan, a year-on-year increase of 50.56%.
Shandong Sun Paper Co.Ltd(002078) 2 announced on the evening of February 27 that it had signed a cooperation framework agreement with Nanning Municipal People’s government and agreed that Shandong Sun Paper Co.Ltd(002078) would invest in the construction of a “Forest Pulp paper integration and supporting industrial park project with an annual output of 5.25 million tons” in Nanning, with a total investment of about 20 billion yuan.
looking for the intersection of undervaluation and profit improvement
In fact, judging from the performance quality disclosed at present, many companies in the above undervalued industries achieved significant net profit growth last year, of which 41 had a lower limit of net profit growth of more than 100% in 2021, focusing on steel, transportation and other fields.
Stocks with strong profitability have suffered obvious undervaluation in the market. In this regard, Guotai Junan Securities Co.Ltd(601211) strategy research report pointed out that it is advisable to focus on the direction of early profit impairment and marginal improvement power, and look for the intersection of undervalued value and profit improvement.
The research report believes that the earnings of the undervalued sector are highly sensitive to the economic cycle, and most of its market comes from the expectation that the stable growth policy underpins the economy. From the perspective of the past six rounds of undervalued market, the duration and excess return of undervalued market are highly related to the verification of corporate profits.
Taking the transportation industry as an example, the net profit of Cosco Shipping Holdings Co.Ltd(601919) , Henan Zhongyuan Expressway Company Limited(600020) , Cosco Shipping Development Company Limited(601866) , Hubei Chutian Smart Communication Co.Ltd(600035) and other companies is expected to double in 2021 Tianfeng Securities Co.Ltd(601162) said in its research report that the transportation infrastructure company has strong and stable profitability, low valuation and high dividend yield, and the relative income is obvious in the adverse trend.
China International Capital Corporation Limited(601995) transportation team research report also said that at the current time point, the undervalued value of transportation is high, and the dividend target is worthy of configuration China International Capital Corporation Limited(601995) believes that the current valuations of highway, railway and bulk supply chain sectors with undervalued value and high dividend are 80%, 91% and 82% of the average valuations in the past five years respectively. In addition, when there is downward pressure on the economy, the dividend target with high undervalued value is more stable.
From the perspective of undervalued value, high dividend and strong profit, Soochow Securities Co.Ltd(601555) research report believes that under the background of medium and high profit and low valuation, the carbon neutralization probability brings the ceiling of industry supply. In addition, the raw material side contributes cost dividends again, and the steel stocks will usher in a wave of sector opportunities of double rise in performance and valuation.
According to the data of Baichuan Yingfu, as of February 18, 2022, China’s total iron and steel inventory was 23.008 million tons, a decrease of 17.53% compared with the same period in 2021 and 24.43% compared with the same period in 2020. Inventory is lower than the same period in the past two years. The low steel inventory since the beginning of the year corresponds to the mild rise in steel prices. As of February 23, the general steel price composite index rose by 3.68% compared with the beginning of the year.
In its recent research report, Shengang Securities said that since the beginning of 2022, the low P / E ratio and high dividend sector have become the main defense mode.
