Industry Multiples in China Report 2020 - Third Edition

We are pleased to launch the third edition of our report, Industry Multiples in China. This report provides an overview of the market multiples of companies in 11 major industries in the Morgan Stanley Capital International (MSCI) China index based on the latest financial metrics available as of September 30, 2020.

Highlights

• China’s GDP grew by 4.9% year-on-year from September 2019 to September 2020 to approximately CNY 72.28 trillion in the first three quarters, according to China’s National Bureau of Statistics.
• The China Shanghai Composite Stock Market Index increased by 522 points, or 18.9%, since the start of 2020, while Hong Kong’s benchmark Hang Seng Index fell by 5,060 points, or 17.72%, in the first nine months of 2020.
• The total number of companies in (MSCI) China index increased this year. Most of the additions are China A shares. Additionally, the MSCI China index increased by around 33% from September 2019 to September 2020, causing the overall price multiples to increase as well.
• Notwithstanding global headwinds, the consumer staples industry outperformed the other industries in terms of aggregate EBITDA, EBIT and Net Income annual growth rates. Except consumer staples and information technology, all the other industries’ aggregate net income dropped. Nevertheless, driven by the share price rebound, the overall price multiples increased in the third quarter of 2020.