China's P/E Down to 20

After peaking just below 50 in January, the P/E ratio (trailing 12-month) of China's Shanghai Composite index is now at 20.95.  Since China has long been considered an emerging market with high growth potential, it has historically had a high P/E ratio (average 36). 

However, a P/E of 20 is not unfamiliar territory for the index.  Back in mid '05, the P/E got all the way down to 16.39 just before the historic rise in the index over the next few years.

click to enlarge

Comments

[paultaut]

16 it is then

[ChandlerLutz]

Interesting post...but could you please provide the source of your information?...thanks....

[johnthebear]

If 16 is possible, does that mean the index goes back to 1000?

If so, what are the probabilities of a 18 PE by 1/09?

How do you explain the loose correlation between the FXI and Shanghai (^ssec) that occurred the last couple of days. Check out the comparisons in Yahoo finance. Do typical FXI investors and media ever look at the real Shanghai market or are they in their own bubble?

[fatleopard]

its more important to know whether Earnings of Chinese corporations continue to grow, else, your 20 times P.E. calculation could be totally invalid.

[X-15]

WH, JST,WATG,SDTH -low PE

25% + growth

[paultaut]

2000