china-deal-screening
Purpose
Screen A-share investment targets — systematic deal screening for Chinese equity investments.
Data Sources
Primary: iFind MCP (Tier-1 paid) / AkShare MCP (Tier-2 free alternative)
get_industry_stocks(industry="...") → Industry universe
get_quote(ticker) → Valuation screening
get_financials(ticker, "income") → Financial screening
get_index_data("000001") → Market context
Secondary Sources
- East Money — stock screener
- Hithink RoyalFlush iFinD — screening tool
- CNINFO — company filings
- Wind — professional screening
Workflow
Step 1: Define Screening Criteria
Screening framework:
| Category |
Criteria |
Typical Range |
| Market cap |
Min/max |
¥5 billion - ¥50 billion |
| Valuation |
P/E, P/B |
P/E 10-30x |
| Growth |
Revenue/earnings growth |
>15% YoY |
| Profitability |
ROE, margins |
ROE >15% |
| Financial health |
Debt/equity, current ratio |
D/E <60% |
| Liquidity |
Avg daily volume |
>¥50 million |
| Governance |
Ownership structure |
Clean cap table |
Step 2: Build Screening Universe
Universe construction:
| Filter |
Criteria |
Source |
| A-share Main Board |
6-digit codes starting with 600/000/001 |
AkShare |
| ChiNext |
Starts with 300 |
AkShare |
| STAR Market |
Starts with 688 |
AkShare |
| Beijing Stock Exchange |
Starts with 8/9 |
AkShare |
| ST exclusion |
Exclude ST/*ST |
Filter |
| Recently listed stocks |
Exclude <6 months |
Filter |
Step 3: Financial Screening
Financial metrics:
| Metric |
Formula |
Target |
| Revenue growth rate |
(Revenue - Revenue_prev) / Revenue_prev |
>15% |
| Net profit growth rate |
(NI - NI_prev) / NI_prev |
>15% |
| ROE |
Net Income / Average Equity |
>15% |
| Gross margin |
Gross Profit / Revenue |
>30% |
| Net margin |
Net Income / Revenue |
>10% |
| Debt-to-asset ratio |
Total Debt / Total Assets |
<60% |
| Operating cash flow/net profit |
OCF / Net Income |
>0.8 |
Step 4: Valuation Screening
Valuation metrics:
| Metric |
Formula |
Target |
| P/E (TTM) |
Price / TTM EPS |
10-30x |
| P/B |
Price / BV per share |
1-5x |
| P/S |
EV / Revenue |
1-5x |
| EV/EBITDA |
EV / EBITDA |
5-15x |
| PEG |
P/E / Growth rate |
<1.0 |
| Dividend yield |
Dividend / Price |
>2% (if applicable) |
Step 5: Technical Screening (Optional)
Technical filters:
| Indicator |
Criteria |
| Stock price position |
Not at 52-week high |
| Moving averages |
Above key MAs |
| Trading volume |
Above average |
| Volatility |
Moderate |
Step 6: Quality Screening
Quality filters:
| Factor |
Check |
| Audit opinion |
Standard unqualified |
| Management |
Stable, experienced |
| Shareholder structure |
No pledge risk |
| Related-party transactions |
Reasonable level |
| Litigation/penalties |
No material issues |
Step 7: Scoring & Ranking
Scoring model:
| Category |
Weight |
Score (1-10) |
Weighted |
| Valuation attractiveness |
25% |
|
|
| Growth potential |
20% |
|
|
| Profitability |
20% |
|
|
| Financial health | 15% | | |
| Quality/Governance | 10% | | |
| Liquidity | 10% | | |
| Total | 100% | | |
Rank candidates by total score.
Step 8: Due Diligence Queue
Create DD pipeline:
| Rank |
Company |
Ticker |
Score |
Sector |
Next Step |
| 1 |
|
|
X.X |
|
Full DD |
| 2 |
|
|
X.X |
|
Quick scan |
| 3 |
|
|
X.X |
|
Quick scan |
Screening Templates
Template 1: Growth at Reasonable Price (GARP)
| Filter |
Criteria |
| P/E |
10-25x |
| Revenue growth |
>20% |
| ROE |
>15% |
| D/E |
<50% |
| Market cap |
>¥10 billion |
Template 2: Deep Value
| Filter |
Criteria |
| P/B |
<1.5x |
| Dividend yield |
>3% |
| D/E |
<40% |
| FCF |
Positive |
| Business |
Stable, understandable |
Template 3: Quality Compounder
| Filter |
Criteria |
| ROE |
>20% (3Y avg) |
| Revenue growth |
>15% |
| Gross margin |
>40% |
| D/E |
<40% |
| Market cap |
>¥20 billion |
Template 4: Turnaround Candidate
| Filter |
Criteria |
| Recent loss |
1-2 years |
| Revenue trough |
Near bottom |
| New management |
Recent change |
| Restructuring |
In progress |
| Industry recovery |
Improving |
China-Specific Screening Considerations
Market Structure
| Factor |
Impact on Screening |
| Retail-dominated |
Retail sentiment matters |
| Policy-driven |
Policy changes create opportunities |
| Concepts/themes |
Theme investing common |
| Northbound capital |
Foreign flows signal quality |
| Institutional holdings |
Institutional ownership |
Common A-share Screening Pitfalls
| Pitfall |
Issue |
Mitigation |
| One-off gains |
Distorts growth/earnings |
Use non-recurring-adjusted data |
| Accounting policies |
Aggressive recognition |
Check notes |
| Related-party transactions |
Inflated revenue |
Review disclosures |
| Major shareholder pledges |
Pledge risk |
Check pledge ratio |
| ST risk |
Delisting risk |
Exclude ST stocks |
Quality Checks
Before finalizing:
- Criteria well-defined
- Universe appropriate
- Data quality verified
- Scoring model calibrated
- Top candidates make sense
- Next steps clear
Data Source Mode Switch: Set env var IFIND_DATA_SOURCE_MODE to control data source preference.
ifind-only (strict): Use iFind only, error if unavailableifind-fallback (default): iFind preferred, fallback to AkShareakshare-only: Skip iFind, use AkShare only
