Looking for normality under abnormal conditions: crossing the fog of bank valuation -Part 1

Market value is the transaction price (valuation) of a company in the capital market, and it is the simplest, most direct, and most effective metric for evaluating and measuring a listed company. For investors, valuation is a process of simulating and quantifying various factors that affect the company's future profitability. For business operators, valuation can be regarded as a key indicator of strategic management, and the level of valuation is closely related to the effectiveness of the strategy.

When the share capital is constant, the market value is determined by the stock price, and the stock price is determined by the price-to-book ratio (PB) or price-to-earnings ratio (PE). The higher the price-to-book ratio or the price-to-earnings ratio, the greater the market value, and vice versa. The embarrassing thing is that, up to now, the valuation of A-share listed banks is at the bottom of all the CITIC Tier 1 and Shenwan Tier 1 industries, and has become one of the few industries that have broken the net. If you draw a long line of sight, just by looking at the valuation, now is undoubtedly the "worst time" for banks.