Shanxi Securities Research Institute macro analyst Guo Rui: Large-cap blue-chip valuations remain at a relatively low level, and market style is expected to become more balanced.

From the current market environment, A-shares are undergoing a transition from extreme divergence toward relative equilibrium. Compared with the technology sector, the overall valuation of traditional large-cap blue chips remains in a historically low range, providing a relatively thick valuation buffer. In this regard, Guo Rui, a macro analyst at Shanxi Securities Research Institute, analyzed to reporters that as of October 23, the CSI Dividend Index, which focuses on traditional blue chips, had a trailing price-to-earnings ratio of only 8.9 times and a price-to-book ratio of less than 0.9 times, with its PB historical percentile at 32%, notably lower than its PE percentile. Among major blue-chip sectors, the SW Banking Index had a trailing P/E of 6.4 times, at the 30th historical percentile; non-bank financials had a P/E of 8.7 times, at a historical bottom; household appliances had a P/E of less than 15 times; food and beverage had a P/E of 21 times, with a historical percentile of only about 13%; and textiles and apparel had a P/E of 24 times, also at a historically low level. The fact that the dividend index and multiple industries are at mid-to-low historical valuation percentiles indicates that the earlier adjustment has been fairly fully reflected at the valuation level, and the downside room for valuations in blue-chip sectors is relatively limited going forward.