The Research of E/P Ratio from the View of Macro Economy, Industry and Company in Taiwan Electronic Stock Market

• Main Authors: Jen-Chieh Tseng, 曾仁傑
• Other Authors: Yen-Sen Ni
• Format: Others
• Language: zh-TW
• Published: 2002
• Online Access: http://ndltd.ncl.edu.tw/handle/49237836437461826980

碩士 === 淡江大學 === 管理科學學系 === 90 === The values of electronic stocks are suspicious by investors, since the NASDAQ index declined sharply from March 2000. Thus, the investors are more concerned with P/E ratio instead of dreaming high values for stocks. After surveying relevant researches, the E/P ratio has better performance than P/E ratio, such as higher R2 value, no autocorrelation due to DW value close to 2. Besides, while EPS is very small, the P/E will approach to an unlimited value, but E/P ratio can conquer the above issue. This research is to investigate the fundamental factors of influencing E/P ratio for Taiwanese electronic stocks. By way of relatively complete analysis including macroeconomic, industry, and financial statement analysis, we find several fundamental variables influencing E/P ratio. Therefore, this research would provide information to decide the values of stocks in investing stocks in the real world. (1) In macroeconomic aspects: 1. Discount rate is positively correlated with E/P ratio, and Growth rate of electronic index is negatively correlated with E/P ratio. It means that risk will lift up, while interest rate is going up. Besides, the increase of the growth of electronic index will be accompanied by the rising of investors'' confidence, then P/E ratio will go up, and E/P ratio will go down. 2. The exchange rate is positively with E/P ratio after Sept. 1997. Foreign investors might withdraw money form stock market, while the value of NT$ is declining. Thus, the stock price will go down, the P/E ratio is going down, and E/P ratio is going up. 3. In addition, the growth rate of industry is negatively related with E/P ratio, D/P is positively related with E/P ratio, and the growth rate of the MIB and the growth rate of the CPI are insignificant with P/E ratio. (2) In industry aspects: 1. The high market-weighted stock is negatively correlated with P/E ratio in 1999 and 2000. The possible reason is that the industry of the high market-weighted stocks belongs to oligopoly industry. Thus, P/E is possibly going up, and E/P is going down. 2. High operating profit ratio is positively with E/P ratio in 1996, which is unexpected. The possible reason is investors are not familiar with electronic industry in 1996, since investors did not realize the competition power of high-tech companies. (3) In financial statement aspects: 1. Expected growth rate of EPS ratio is negatively correlated with E/P in 1996 and 1999, and it means that investors will concern the future growth of stock price. However, the above phenomenon didn''t happened in 1998 and 2000 due to the depression of stock markets in these years. 2. Debt ratio is negatively related with E/P ratio at 1997, and TIE is positively with E/P ratio at 1999.The possible reasons are that leverage might increase profits, lift up the P/E ratio, and low down the E/P ratio. 3. The beta coefficients are not significant in these five years. It indicated that the risk is not relate with E/P ratio in this study.