Abstract

Due to real estate and financial industry respectively characterized by strong and weak periodicity, this article
aiming to investigate which kind of cyclical industry in the listed companies will Price/Earnings (PE) and
Price/Book value (PB) be more suitable for evaluating selects the data of Shenzhen Development Bank (SDB)
and Vanke A from Feb. 28 1991 to June 30 2009, uses mean-variance comparison method and analyzes theirs
PE and PB. The results are that PE is more suitable for the evaluation of SDB and PB is more suitable for the
evaluation of Vanke A. It shows that to some extent PE is more suitable for the evaluation of weak cyclical
industry and PB is more suitable for the evaluation of strong cyclical industry.

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