#头条创作游园会#
The sixth big question is: what factors does the price level of a company (PE level) depend on?
There are three main factors that determine the expected PE of the market: ROE, perpetual growth rate g, and cost of equity Ke
Why do we say that, let's first use a simplified, abstract valuation model, the dividend discount model (Gordon growth model), to derive it.
Assuming that the equity valuation (i.e., the price level) is P, then P=D1/(Ke-g). Thereinto:
D1 stands for expected dividends;
Ke stands for cost of equity;
g stands for the permanent expected growth rate
Dividing both sides of the equation by earnings per share (EPS), we can ultimately derive:
PE=股息支付率*（1+g）/( Ke-g)
Dividend payout ratio = 1 - expected payout ratio / return on equity = 1 - g/ROE
那么，PE=（1-g/ROE）/( Ke-g)。
Then, we divide the dividend discount model into two phases and bring in the dividend payout ratio formula, and there is
You see, among the factors that affect the expected PE, the most important influencing factors are:
One is the absolute value of ROE (return on invested capital), the second is the performance growth rate g, and the third is the equity risk level (Ke)
Therefore, the valuation of a company actually depends on the careful separation of the above three factors.
Among them, we say that the absolute value level of ROE determines the foundation of enterprise value
When the absolute value of ROE rises, PE will rise with it. The growth of ROE, according to DuPont analysis, is mainly affected by the net profit margin of sales, the total asset turnover ratio, and the equity multiplier
Among them, the level of net sales profit margin and total asset turnover rate is related to the growth rate of performance
For example, if the revenue growth rate is greater than the total asset growth rate, the total asset turnover rate will increase; Or, if the growth rate of net profit is greater than the growth rate of revenue, the net profit margin of sales will increase
Therefore, as long as the performance continues to grow, even if the growth rate slows down, as long as the net profit growth rate is greater than the revenue growth rate, the ROE can maintain growth, which is also the reason why the ROE of Robam Appliances continues to rise
In addition, the level of performance growth, as well as Ke (risk factor), affect the elasticity of valuations
If the performance growth rate is dismantled, it is a variety of business data of an enterprise and an industry, which involves industry research, management and other aspects.
If you break down Ke, the influencing factors are the level of the risk-free rate (long-term Treasury yield), as well as beta, the cost of equity risk, and even the country risk premium
This also explains why, at the macro level, long-term Treasury yields affect the stock market
It also explains why interest rate cuts will push up the valuation level of the broader market; It also explains why the sharp decline in the United States stock market almost always implicates the securities markets of other countries
At the same time, it also explains why changes in a country's macro environment can affect people's expectations of valuation
Predict the follow-up and listen to the next breakdown
It does not constitute any investment advice, the stock market is risky, and you need to be cautious when entering the market