Price-earnings ratio (PE) refers to the ratio of price per share to earnings per share, reflecting the price investors are willing to pay for each yuan of profit. The higher the ratio, the greater the future growth potential of the company. The usage is to compare two similar companies. Because there are no two identical companies, this indicator is sometimes very effective, and sometimes it is just a reference.

The improvement of P/E ratio is only one aspect of fundamentals, and cannot be used as the only principle of stock selection. More importantly, it depends on whether there is big capital to enter. China's stock market is still capital-driven, and even the best stocks can't rise without capital. Our shareholders' funds are pitiful, and it is impossible to control the rise and fall of stocks, so we can only follow the big funds. So pay attention to the trend of stock price, hoping to help you.