Chinese stocks listed in Shanghai and Hong Kong have never been cheaper. Here’s why

The fate of mostly Chinese companies represented on the Hang Seng Index in Hong Kong is far worse.

Their average price-to-book value stood at 0.85 times on Wednesday, near the record-low of 0.82 times reported in October 2022. The measure peaked at 1.56 times in April 2015, according to Bloomberg data.

“The derating of the valuations of Chinese equities has been a big drag on performance,” said Nicholas Yeo, the Hong Kong-based head of China equities at abrdn, which manages assets worth US$467 billion globally. That is largely due to the economy being not great, he added.

Place China bets carefully and look across Asia: JPMorgan Private Bank

At the same time, perceptions, especially outside China, have been pretty negative, Yeo said.

The Shanghai Composite Index tracks all 2,158 companies listed on the bourse, with a total market capitalisation of 42.9 trillion yuan (US$6 trillion). The Index has declined 4.3 per cent so far this…