Analysis of Investment Strategies for A-Shares and Hong Kong Stock Connect Dividend Indices from the Perspective of PR (Price-to-ROE) Ratio

Based on the information I have obtained and search results, I will provide you with an investment strategy analysis report for A-Shares and Hong Kong Stock Connect dividend indices based on the PR (Price-to-ROE) ratio:

The PR (Price-to-ROE) ratio is an important indicator of Buffett’s value investment philosophy, with the calculation formula:

Core investment logic:

• 0.4-0.5PR
  : Buying range with margin of safety
• Close to 1PR
  : Sell signal
• 0.7-0.9PR
  : Relatively undervalued state, with medium- to long-term investment value

According to search results, the PR values of multiple dividend indices are currently between 0.7 and 0.9, in a relatively undervalued state [1], which provides a good opportunity window for medium- to long-term investment.

1. Shanghai Stock Exchange Dividend Index (000015)
   • Features: Selects the top 50 stocks with the highest dividend yields in the Shanghai Stock Exchange market
   • Industry distribution: Mainly concentrated in traditional value stocks such as banking, energy, and utilities
   • Suitable for conservative investors

2. Shenzhen Stock Exchange Dividend Index (399324)
   • Features: Representative of high-dividend stocks in the Shenzhen Stock Exchange market
   • Growth: Has better growth potential compared to the Shanghai Stock Exchange Dividend Index

3. CSI Dividend Index (000922)
   • Features: Selected across markets, covering both Shanghai and Shenzhen Stock Exchanges
   • Diversification: More balanced industry allocation
   • Liquidity: Largest scale and best liquidity

1. Hang Seng High Dividend Yield Index
   • Features: Representative of high-dividend stocks in the Hong Kong stock market
   • Valuation advantage: Has a valuation discount compared to A-Shares
   • Exchange rate risk: Need to consider RMB exchange rate fluctuations

1. Yifangda Dividend ETF (515180)
   • Tracking index: CSI Dividend Index
   • Management fee rate: Low, suitable for long-term holding
   • Scale: Large-scale ETF with abundant liquidity

2. CSI Dividend ETF (510890)
   • Tracking target: CSI Dividend Index
   • Trading activity: High, easy for buying and selling operations
   • Dividend stability: Constituent stocks have good dividend records

1. Hang Seng High Dividend ETF (513690)
   • Investment target: High-dividend stocks in the Hong Kong market
   • Exchange rate hedging: Some products provide exchange rate hedging functions
   • Diversified investment: Forms a good complement to A-Shares

• Valuation advantage
  : PR value of 0.7-0.9 is in a relatively undervalued range [1]
• Policy support
  : Regulators encourage value investment and long-term investment
• Capital flow
  : Institutional funds are gradually returning to value stocks

1. Interest rate risk
   : If the central bank raises interest rates, it may affect the relative attractiveness of high-dividend stocks
2. Economic cycle
   : Traditional value stocks are more sensitive to economic cycles
3. Exchange rate fluctuations
   : Hong Kong Stock Connect investments need to consider exchange rate factors

• Core allocation (60-70%)
  : A-Shares dividend ETFs (e.g.,515180,510890)
• Satellite allocation (20-30%)
  : Hong Kong Stock Connect high-dividend ETFs (e.g.,513690)
• Cash reserve (10-20%)
  : Wait for better buying opportunities

1. Batch position building
   : Use the current PR value advantage to buy in batches
2. Regular rebalancing
   : Adjust positions according to changes in PR values
3. Long-term holding
   : Dividend investment focuses on the compound interest effect; it is recommended to hold for 3-5 years

• When PR value approaches 1.0, gradually reduce positions
• When the increase of a single index exceeds 30%, consider taking profits
• Timely stop loss when fundamental deterioration occurs

Based on the PR (Price-to-ROE) ratio analysis, the current A-Shares and Hong Kong Stock Connect dividend indices are indeed in a medium- to long-term investment window. The PR range of 0.7-0.9 provides investors with relatively safe value investment opportunities. It is recommended to prioritize CSI Dividend Index-related ETF products, while appropriately allocating Hong Kong Stock Connect high-dividend ETFs to achieve regional diversification.

In the current market environment, adopting the “core-satellite” strategy with A-Shares dividend ETFs as the core and Hong Kong Stock Connect high-dividend ETFs as the satellite can not only enjoy the dividends of value investment but also reduce single-market risks through diversification.

[1] Online search results - Market analysis on the relatively undervalued PR (Price-to-ROE) ratio of 0.7-0.9 for A-Shares and Hong Kong Stock Connect dividend indices

[2] Bloomberg - Information related to China Market Update

[3] Yahoo Finance - Analysis on investment opportunities of high-dividend ETFs