Core Viewpoint - The article discusses the recent trends in housing prices across major cities in China, indicating a halt in the previous upward momentum and an increase in the number of cities experiencing price declines, suggesting a prolonged search for a bottom in the housing market [1][4]. Housing Market Trends - In April, the number of cities with declining housing prices increased, with only six cities showing month-on-month price increases compared to fourteen in March [4]. - Major cities like Beijing, Hangzhou, Xiamen, and Shenzhen, which previously showed resilience, have now entered a downward trend [4]. - The average housing price index for first-tier cities decreased by 0.2%, while second and third-tier cities saw a decline of 0.4%, indicating a broader market weakness [4]. Economic Indicators - The current mortgage interest rates have dropped to around 3%, but the rental yield in many first and second-tier cities remains below 2%, leading to negative cash flow for property owners [4]. - The article highlights that the housing market is experiencing a structural shift due to demographic changes, with a significant reduction in the growth of the resident population expected over the next few decades [5]. Stock Market Insights - The article mentions that the valuation of the CSI 300 index is currently at 12.6, which is lower than many global indices, indicating a potential undervaluation in the A-share market [6]. - The low valuation of the CSI 300 is attributed to a high proportion of financial and state-owned enterprises, which may not prioritize shareholder returns [6]. Broader Market Context - The article notes that the Hong Kong stock market has seen significant new stock financing, surpassing 60 billion this year, indicating a strong appetite for capital among Chinese companies [7]. - The article also touches on the impact of U.S. economic conditions, including rising long-term treasury yields and the implications of a recent downgrade of the U.S. sovereign rating by Moody's [7].

中国证监会副主席李明在深交所2025全球投资者大会上表示，目前A股估值水平仍处于相对低位，沪深 300市盈率12.6，明显低于境外市场主要指数，配置价值进一步凸显。 （新华财经） ...

Investment Rating - The report does not explicitly provide an investment rating for the industry Core Insights - The overall PE of A-shares is 19.0 times, positioned at the historical 51st percentile - The real estate, steel, power equipment (photovoltaic equipment), national defense, aviation, chemical pharmaceuticals, and IT services sectors have PE valuations above the historical 85th percentile - The agricultural, forestry, animal husbandry, and medical services sectors have both PE and PB valuations below the historical 15th percentile [1][2][3] Valuation Comparison - A-shares overall PE is 19.0 times, with the Shanghai 50 Index at 10.9 times, the CSI 500 Index at 28.8 times, and the ChiNext Index at 30.7 times, indicating varying levels of valuation across different indices [1][5] - The CSI 1000 Index has a PE of 39.3 times, while the National Index 2000 has a PE of 50.9 times, reflecting higher valuations in smaller cap indices [1][5] - The ChiNext Index's PE relative to the CSI 300 is 2.4 times, at the historical 5th percentile, indicating a significant premium [1][5] Industry Tracking New Energy - Photovoltaic sector shows a decline in upstream polysilicon prices by 2.6% and a 0.9% drop in spot prices, with terminal demand decreasing and high inventory levels persisting [2][3] - Battery materials like cobalt and nickel have mixed price movements, with lithium carbonate prices down by 6.0% [2][3] Financial Sector - The commercial bank non-performing loan rate increased by 1 basis point to 1.51%, while the net interest margin decreased by 9 basis points to 1.43% [2][3] Real Estate Chain - Steel prices increased by 1.4% for rebar, while cement prices fell by 1.0% due to reduced demand from real estate investments [2][3] Consumer Sector - Pork prices decreased by 1.4%, while wholesale pork prices increased by 1.6%, indicating a mixed trend in the meat market [2][3] Midstream Manufacturing - Heavy truck sales increased by 6.5% year-on-year, benefiting from the application of new energy [2][3] Technology TMT - Domestic smartphone shipments grew by 3.3% year-on-year in March 2025, showing signs of recovery in consumer electronics [2][3] Cyclical Industries - The price of Brent crude oil increased by 2.3% to $65.33 per barrel, reflecting improved market sentiment due to easing trade tensions [2][3]

Market Environment Comparison - The current A-share market environment is significantly different from that of 2008, with the global economy gradually recovering from the financial crisis, leading to increased investor confidence [5] - Unlike the panic and uncertainty of 2008, the current market is characterized by a more stable and mature Chinese economy, supported by reforms and foreign capital inflows [5] Overall Valuation Analysis - The median price-to-book (P/B) ratio of A-shares has increased from 1.62 times in 2008 to 2.39 times currently, indicating that despite a lower price-to-earnings (P/E) ratio, the overall valuation of A-shares is higher than in 2008 [6] - The influx of new listings has diluted market valuations, contributing to a perception of lower valuations, but deeper analysis reveals that current valuations exceed those of 2008 [6] Policy Environment Impact - The A-share market is heavily influenced by state-owned enterprises, which often prioritize dividend retention over stock buybacks, affecting market dynamics [7] - The Chinese government's strict regulatory environment aims to maintain market stability and fairness, contrasting with the more market-driven approaches seen in other countries [7] Investment Opportunities and Risks - Simple comparisons of current valuations with those of 2008 overlook the fundamental changes in the economic environment, necessitating a broader focus on macroeconomic conditions, industry trends, and company fundamentals for informed investment decisions [9] - The A-share market's primary function is financing rather than pure investment returns, highlighting the importance of incremental capital inflows as a driving force behind market movements [10] Future Outlook - The investment value of the A-share market is expected to gradually be released as the Chinese economy continues to develop and the capital market deepens, despite short-term uncertainties [12] - A shift towards long-term value investing is emerging, replacing short-term speculation, which is contributing to a more rational market environment [11]