On November 5, Chen Guo, chief strategy officer of Dongfang Wealth Securities Research Institute, said in an interview that the performance of high-quality blue-chip companies with core competitive barriers will continue to grow. Under the low interest rate environment and the prospect of RMB appreciation, their valuation and pricing are attractive. According to Chen Guo, risk-free interest rates are the “anchor” for asset pricing. A downward shift in the interest rate center means a decrease in the opportunity cost of holding low-risk assets. Currently, the 10-year treasury bond yield is already at around 1.6%, which is an extremely favorable valuation environment for blue-chip stocks with steady growth in performance. Currently, the static price-earnings ratio of the Shanghai and Shenzhen 300 Index is only 13.6 times, and the net price-earnings ratio is only 1.35 times. If you consider risk-free returns and ERP is used to measure the attractiveness of equity assets compared to bonds, the price-performance ratio of Shanghai and Shenzhen 300 has been ranked at 72% in the past ten years; while the price-earnings ratio of the core blue chip index has been below 10% since its launch in 2021. Compared with 2021, the corresponding profit has increased by about 60% and nearly three times, respectively. The PB of a large number of blue-chip companies of central state-owned enterprises is about 1 times or even less than 1 times the PB; in addition to continuing positive growth in performance, many leading companies in the industry with competitive barriers also have dividend rates corresponding to current stock prices at around 3.5% to 5%. Compared with assets such as bonds and real estate, these large-cap blue-chip stock allocations are highly attractive.

On November 5, Chen Guo, chief strategy officer of Dongfang Wealth Securities Research Institute, said in an interview that the performance of high-quality blue-chip companies with core competitive barriers will continue to grow. Under the low interest rate environment and the prospect of RMB appreciation, their valuation and pricing are attractive. According to Chen Guo, risk-free interest rates are the “anchor” for asset pricing. A downward shift in the interest rate center means a decrease in the opportunity cost of holding low-risk assets. Currently, the 10-year treasury bond yield is already at around 1.6%, which is an extremely favorable valuation environment for blue-chip stocks with steady growth in performance. Currently, the static price-earnings ratio of the Shanghai and Shenzhen 300 Index is only 13.6 times, and the net price-earnings ratio is only 1.35 times. If you consider risk-free returns and ERP is used to measure the attractiveness of equity assets compared to bonds, the price-performance ratio of Shanghai and Shenzhen 300 has been ranked at 72% in the past ten years; while the price-earnings ratio of the core blue chip index has been below 10% since its launch in 2021. Compared with 2021, the corresponding profit has increased by about 60% and nearly three times, respectively. The PB of a large number of blue-chip companies of central state-owned enterprises is about 1 times or even less than 1 times the PB; in addition to continuing positive growth in performance, many leading companies in the industry with competitive barriers also have dividend rates corresponding to current stock prices at around 3.5% to 5%. Compared with assets such as bonds and real estate, these large-cap blue-chip stock allocations are highly attractive.