As you might know, market turmoil in China is currently affecting stock markets everywhere and one of the hardest hit markets right now is just next door to the Middle Kingdom — Hong Kong. Amid a Chinese economic slowdown, the Hang Seng Index has plunged 35% from its April peak when it crossed below 19,000 last week which caused the index to fall below its net asset value for the first time since 1998 during the Asian financial crisis. In comparison, the S&P 500 currently trades at a price-to-book ratio of around 2.5. The Hang Seng’s PE ratio is also at one of its lowest points right now. At its close last Friday, the index was trading at just 7.73 times earnings. Now I know that number alone won’t give you the full context, so I did some research and pulled out a chart of the Hang Seng’s historical PE from 1983 to 2015:

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