Chinese Stock Screen Using Turnover, Profit Growth, and Price

Summary

The document describes a Chinese equity screening rule that selects stocks with turnover between 3% and 12%, year-over-year net profit growth attributable to parent-company shareholders above 20% and at most 100%, and a share price below 12. It presents the combination as a way to bring trading activity, company earnings growth, and low share price into one screen, with sample implementations for screening and ranking candidates.

The article gives no backtest or performance evidence for the rule. It cautions that a low share price can exclude strong companies and may coincide with overheating or manipulation; the selected financial and price measures also leave out other business and market conditions. It suggests adding financial, industry, and technical filters and applying risk controls such as stops and position limits. The Python example does not fully match the stated rule: it omits the turnover filter and uses a price field labeled PE_TTM, so its output should not be treated as a faithful implementation.

Key ideas

• The screen combines turnover, year-over-year net profit growth, and a low share-price threshold.
• The stated turnover range is 3% to 12%, while profit growth must exceed 20% and not exceed 100%.
• The article does not provide evidence that the screening rule produces profitable results.
• Low share price and a small set of indicators can omit important company and market information.
• The sample Python implementation omits turnover and appears to compare a PE field with the price threshold.

Tags

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