Chinese Stock Screen Combining RSI, Earnings Growth, and ROE

Summary

The document proposes a Chinese stock screen that pairs a 14-period RSI below 65 with year-over-year net profit growth above 20% and no more than 100%, plus a return on equity above 15% over five years. It presents the conditions as a way to combine a technical filter with earnings growth and sustained profitability, with the intention of selecting shares for long-term holding. Its examples also mention positive net profit and excluding suspended or specially designated shares.

The author warns that a high ROE can obscure debt or earnings-quality problems and may be affected by balance-sheet changes. Suggested refinements include examining operating cash flow, growth quality, competitive advantages, and the details behind ROE, alongside risk controls and asset allocation. The post includes sample screening queries and Python-style logic, but it supplies no backtest, portfolio results, or evidence that the proposed thresholds predict future returns. The sample calculation also does not clearly establish that the stated five-year ROE condition is measured consistently.

Key ideas

• The proposed screen combines RSI below 65 with bounded annual net profit growth and sustained high ROE.
• The strategy is framed as a long-term stock-selection method using both technical and fundamental filters.
• The author cautions that ROE can be distorted by leverage and balance-sheet changes.
• Additional analysis of cash flow, competitive strength, and earnings quality is recommended.
• No backtest results or evidence of predictive performance are provided, and the sample logic leaves the five-year ROE calculation unclear.

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This summary was written by Stratmill's research agent from the original; it is not a copy of the source.