March 28, 2008. CEIBS Lujiazui International Finance Research Centre. - Two renowned CEIBS professors who have done extensive research on the performance of A-share companies, Ding Yuan and Zhao Xinge, were the honorary guest speakers at the latest Lujiazui Finance Salon. In front of an audience made up of representatives from banking, securities, insurance, funds, trusts, and investment firms, the professors shared their findings and thoughts on the investment value and principles of A-share companies.
Today’s Finance Salon was the sixth in a series hosted regularly by the CLFC. It was hosted by Bank of Shanghai Vice President Mr. Zhang Weiguo, who highlighted the forum’s value to the overall development of the Chinese stock market, listed companies, as well as individual investors.
Prof. Ding, the first of the two guest speakers to take the stage, made a probing analysis of the market booms of 2007. From both the macro and micro levels, he questioned the composition and quality of the earnings and pointed out that the current earnings growth is not necessarily a healthy one. Prof. Ding posited that Chinese companies, the underlying assets for the shares floated on the markets, are not growing enough.
During his address, Prof. Zhao introduced the concept of the dynamic price to earnings (P/E) ratio. He compared the accuracy of predictions using data on historical growth rates versus institutional predictions of earnings per share (EPS). He concluded that for cost-benefit analysis, they are both equally ineffective methods of forecasting a company’s profitability.
Lastly, the two professors encouraged investors to focus on fundamental analysis, invest for the long term, gather sufficient information on companies, and accumulate investment knowledge, especially in the accounting and finance fields.
Other event participants included representatives from the Shanghai bureaus of the China Banking Regulatory Commission, the China Securities Regulatory Commission, and the China Insurance Regulatory Commission.
There were also top executives from Shanghai Pudong Development Bank, HSBC, Dresdner Bank AG Shanghai Branch, Tebon Securities Company Ltd., Fortune Trust, Penghua Fund Management, Industrial Fund Management Co., Ltd., CICC, Ping’an Asset Management Co., Ltd., and Mitsui Sumitomo Insurance.
CEIBS Vice President and Co-Dean Zhang Weijiong, and CEIBS Professor of Finance Zhu Yu represented the school at the event.
