Patent-Based Predictive Price-to-Earnings Ratio on Increasing Investment Performance of China Stock Market

China listed companies (A-shares) in Shanghai Main Board, Shenzhen Main Board, GE Board, and SME Board are discussed the prediction ability of patent indicators to A-share's price-to-earnings ratio (PE). We constructed patent leading indicators and patent prediction equations for predicting PE via Granger Causality test and time series regression. We found the stock selection criteria by the higher predictive PE growth rate is useful to build valuable stock portfolios for Shanghai Main Board and Shenzhen Main Board with better performance than the market trend. It also worked well on SME Board though is was seriously impacted by China-US trade conflict.