China Sanjiang Fine Chemicals Company Limited (HKG:2198) shares have had a really impressive month, gaining 34% after a shaky period beforehand. Unfortunately, the gains of the last month did little to right the losses of the last year with the stock still down 47% over that time.
Even after such a large jump in price, given close to half the companies in Hong Kong have price-to-earnings ratios (or "P/E's") above 9x, you may still consider China Sanjiang Fine Chemicals as an attractive investment with its 4.5x P/E ratio. However, the P/E might be low for a reason and it requires further investigation to determine if it's justified.
For example, consider that China Sanjiang Fine Chemicals' financial performance has been poor lately as it's earnings have been in decline. One possibility is that the P/E is low because investors think the company won't do enough to avoid underperforming the broader market in the near future. If you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's out of favour.
View our latest analysis for China Sanjiang Fine Chemicals
SEHK:2198 Price Based on Past Earnings August 17th 2022 We don't have analyst forecasts, but you can see how recent trends are setting up the company for the future by checking out our
free report on China Sanjiang Fine Chemicals' earnings, revenue and cash flow.
How Is China Sanjiang Fine Chemicals' Growth Trending?
The only time you'd be truly comfortable seeing a P/E as low as China Sanjiang Fine Chemicals' is when the company's growth is on track to lag the market.
Taking a look back first, the company's earnings per share growth last year wasn't something to get excited about as it posted a disappointing decline of 66%. As a result, earnings from three years ago have also fallen 18% overall. Therefore, it's fair to say the earnings growth recently has been undesirable for the company.
Weighing that medium-term earnings trajectory against the broader market's one-year forecast for expansion of 15% shows it's an unpleasant look.
In light of this, it's understandable that China Sanjiang Fine Chemicals' P/E would sit below the majority of other companies. However, we think shrinking earnings are unlikely to lead to a stable P/E over the longer term, which could set up shareholders for future disappointment. Even just maintaining these prices could be difficult to achieve as recent earnings trends are already weighing down the shares.
The Bottom Line On China Sanjiang Fine Chemicals' P/E
The latest share price surge wasn't enough to lift China Sanjiang Fine Chemicals' P/E close to the market median. Generally, our preference is to limit the use of the price-to-earnings ratio to establishing what the market thinks about the overall health of a company.
As we suspected, our examination of China Sanjiang Fine Chemicals revealed its shrinking earnings over the medium-term are contributing to its low P/E, given the market is set to grow. At this stage investors feel the potential for an improvement in earnings isn't great enough to justify a higher P/E ratio. If recent medium-term earnings trends continue, it's hard to see the share price moving strongly in either direction in the near future under these circumstances.
Before you take the next step, you should know about the 3 warning signs for China Sanjiang Fine Chemicals that we have uncovered.
If these risks are making you reconsider your opinion on China Sanjiang Fine Chemicals, explore our interactive list of high quality stocks to get an idea of what else is out there.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
中国三江精细化工股份有限公司(HKG:2198)股价在经历了一段不稳定的时期后,经历了令人印象深刻的一个月,上涨了34%。不幸的是,上个月的收益几乎没有弥补去年的损失,该股在此期间仍下跌了47%。
即使在股价大幅上涨之后,考虑到近一半的香港公司的市盈率(或“市盈率”)超过9倍,你可能仍会认为中国三江精细化工4.5倍的市盈率是一笔有吸引力的投资。然而,市盈率可能是有原因的,需要进一步调查才能确定它是否合理。
例如,考虑到中国三江精细化工最近的财务表现一直很差,因为它的收益一直在下降。一种可能性是,市盈率较低是因为投资者认为该公司在不久的将来不会采取足够的措施来避免表现逊于大盘。如果你喜欢这家公司,你会希望情况并非如此,这样你就可以在它不再受青睐的时候买入一些股票。
查看我们对中国三江精细化工的最新分析
联交所:2198价格基于过去收益2022年8月17日我们没有分析师的预测,但您可以通过查看我们的
免费中国三江精细化工公司收益、收入和现金流报告。
中国三江精细化工的发展趋势如何?
只有当中国三江精细化工的增长落后于市场时,你才会真正放心地看到该公司的市盈率如此之低。
先回过头来看,该公司去年的每股收益增长并不值得兴奋,因为它公布了令人失望的66%的降幅。因此,三年前的整体收益也下降了18%。因此,公平地说,最近的收益增长对公司来说是不可取的。
将这一中期收益轨迹与大盘一年增长15%的预期进行比较,可以看出这是一个令人不快的前景。
有鉴于此,中国三江精细化工的市盈率低于大多数其他公司也是可以理解的。然而,我们认为,盈利缩水不太可能带来长期稳定的市盈率,这可能会让股东们未来感到失望。即使只是维持这样的价格也可能很难实现,因为最近的收益趋势已经在拖累股价。
中国三江精细化工市盈率的底线
最近的股价飙升不足以将中国三江精细化工的市盈率推高至接近市场中值的水平。一般来说,我们倾向于限制市盈率的使用,以确定市场对公司整体健康状况的看法。
正如我们怀疑的那样,我们对中国三江精细化工的调查显示,考虑到市场将会增长,该公司中期盈利缩水是导致其市盈率较低的原因之一。在这个阶段,投资者认为盈利改善的潜力还不够大,不足以证明提高市盈率是合理的。如果近期的中期盈利趋势继续下去,在这种情况下,很难看到股价在不久的将来向任何一个方向强劲移动。
在您采取下一步之前,您应该了解中国三江精细化工的3个警示标志我们已经发现了。
如果这些风险让你重新考虑对中国三江精细化工的看法,探索我们的高质量股票互动列表,以了解还有什么。
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本文由Simply Wall St.撰写,具有概括性。我们仅使用不偏不倚的方法提供基于历史数据和分析师预测的评论,我们的文章并不打算作为财务建议。它不构成买卖任何股票的建议,也没有考虑你的目标或你的财务状况。我们的目标是为您带来由基本面数据驱动的长期重点分析。请注意,我们的分析可能不会将最新的对价格敏感的公司公告或定性材料考虑在内。Simply Wall St.对上述任何一只股票都没有持仓。