As of January 1, 2025, the Shanghai stock market has a trailing price-to-earnings (P/E) ratio of 15.29 and a forward P/E of 13.05, while the CAPE ratio is 14.98. These multiples are based on the SSE Composite Index, the primary benchmark for mainland China’s stock market. Chinese stocks experienced weak earnings growth over the past year, with earnings declining in 2024. Analysts maintain modest expectations for 2025.

It is important to note that major Chinese technology companies, including Alibaba Group, Tencent, Xiaomi, & Meituan, are listed on the Hong Kong Stock Exchange and are not included in the SSE Composite. The Shanghai stock market is primarily dominated by large mainland banks and industrial firms.

For the most up-to-date figures and full historical data, explore the data subscriptions offered by Siblis Research.

Shanghai Composite Index – P/E (TTM & Forward), EPS (TTM & Forward), & CAPE Ratio

* The table presents both trailing and forecasted Earnings Per Share (EPS), with values indexed to a base of 100 as of January 1, 2022. EPS (TTM) reflects the aggregate earnings of the SSE Composite index stocks for the past 12 months and is calculated using the net income of the companies. EPS (Forward) is the forecasted (analyst consensus) earnings per share for the next 12 months and is calculated using the estimated operating profit of the companies.

Gain full access to our Global Equity Valuations database with the Professional Subscription Plan. 35+ markets/indices. 40+ years of data.

✔ Comprehensive Valuation Metrics – Price-Earnings Ratios (trailing & forward), Earnings Per Share (trailing & forward), CAPE Ratios, Dividend Yields, Market Cap-to-GNI Ratios, Long-Term Interest Rates – Price levels included, analyze market performance in relation to valuations.
✔ Sector Weightings & Breakdowns – Make your own sector-adjustments using your preferred methodology.
✔ Flexible Data Access – Customize data format and delivery method to fit your specific needs.
✔ Explore a sample dataset here.

Earnings Growth of Chinese Equity Market

Over the past decade, earnings growth for Chinese public companies has remained largely stagnant. While the Chinese economy has continued to expand—albeit at a slower pace than in the 1990s and early 2000s—this growth has not translated into strong corporate earnings.

Chinese stocks were only mildly affected by the 2008 financial crisis, thanks to massive government stimulus. However, in the years that followed, earnings growth for Shanghai-listed companies has been dismal. After the COVID lockdowns, many anticipated a surge in economic activity and consumer spending, but the expected boom never really materialized.

The most commonly cited reasons for weak corporate performance are summarized below:

Weak Consumer Demand

• China’s post-pandemic recovery has been weaker than expected, with low consumer confidence and household deleveraging, meaning more savings and less spending. Most Chinese citizens have a large portion of their savings invested in the local real estate markets and recent property troubles have affected consumer wealth and spending behavior.

Rising Operating Costs

• Labor costs in China have been rising, while manufacturing and operational expenses continue to climb. Many Chinese firms are competing on thin margins, making profitability difficult despite revenue growth. For example, the solar industry has seen plunging prices due to oversupply, causing losses even for top producers like Xinte Energy.

Regulatory Crackdowns

• The government’s increased oversight of the private sector, particularly in tech, education, and financial services, has dampened earnings potential. Sectors like e-commerce, online tutoring, and fintech have been affected by fines, restrictions, and restructuring requirements. Both Alibaba and Tencent have slowed investment and expansion due to regulatory uncertainty.

US-China Trade Tensions

• Geopolitical tensions, U.S. tariffs, and export restrictions on critical technologies (like semiconductors) have hurt Chinese companies’ ability to grow in foreign markets.

High Corporate Debt

• Many Chinese companies, especially in real estate and infrastructure, have taken on large amounts of debt, limiting their ability to generate healthy earnings. Property developers like Evergrande and Country Garden have faced financial distress, weighing on the broader economy.

Overcapacity

• Many Chinese industries, including real estate, solar panels, and EVs suffer from serious overcapacity, leading to price wars and squeezed profit margins. For example, BYD, China’s largest EV maker and celebrated local corporate champion, is reporting slowing profit growth due to a price war in the automobile sector, despite strong sales volumes.

Stock Market Disconnection from Economic Growth

• China’s stock market has struggled with low investor confidence due to government interventions, strict capital controls, and lack of transparency. Public companies may not fully reflect the broader economy’s performance due to the dominance of state-owned enterprises (SOEs), which often prioritize government goals over profit maximization.