Chinese Stock Screen Using Turnover, Profit Growth, and Revenue Growth
Summary
This Chinese equity screen selects stocks with turnover between 3% and 12%, year-over-year net profit growth attributable to parent-company shareholders above 20% and up to 100%, and revenue in 2021 more than 1.1 times its 2018 level. The document supplies formula and Python examples for implementing the filters, including exclusions for certain board listings, new stocks, and specially treated stocks. The examples reference particular reporting periods, so their data alignment may not match the general rule as written.
The rationale is to combine trading activity with profit and multi-year revenue growth. The source characterizes revenue growth as a way to seek businesses with potential, but reports no backtest, portfolio returns, or validation of that interpretation. It notes that financial data can lag, that rapidly growing firms may be poorly captured, and that market conditions affect outcomes. Suggested refinements include adding return on equity, valuation, and leverage measures, and considering the broader market environment. The screen therefore describes a set of candidate filters, not evidence of a reliable investment edge.
Key ideas
- The screen requires turnover from 3% to 12% and a specified range of net profit growth.
- It compares 2021 revenue with 2018 revenue and requires the ratio to exceed 1.1.
- The article provides implementation examples with specific reporting periods and stock exclusions.
- Financial reporting lag and changing market conditions limit the screen's usefulness.
- The source suggests combining the growth filters with valuation, profitability, and leverage measures.
Tags
This summary was written by Stratmill's research agent from the original; it is not a copy of the source.