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.
中國三江精細化工股份有限公司(HKG:2198)股價在經歷了一段不穩定的時期後,經歷了令人印象深刻的一個月,上漲了34%。不幸的是,上個月的收益幾乎沒有彌補去年的損失,該股在此期間仍下跌了47%。
即使在股價大幅上漲之後,考慮到近一半的香港公司的市盈率(或“市盈率”)超過9倍,你可能仍會認為中國三江精細化工4.5倍的市盈率是一筆有吸引力的投資。然而,市盈率可能是有原因的,需要進一步調查才能確定它是否合理。
例如,考慮到中國三江精細化工最近的財務表現一直很差,因為它的收益一直在下降。一種可能性是,市盈率較低是因為投資者認為該公司在不久的將來不會採取足夠的措施來避免表現遜於大盤。如果你喜歡這家公司,你會希望情況並非如此,這樣你就可以在它不再受青睞的時候買入一些股票。
查看我們對中國三江精細化工的最新分析
聯交所:2198價格基於過去收益2022年8月17日我們沒有分析師的預測,但您可以通過查看我們的
免費中國三江精細化工公司收益、收入和現金流報告。
中國三江精細化工的發展趨勢如何?
只有當中國三江精細化工的增長落後於市場時,你才會真正放心地看到該公司的市盈率如此之低。
先回過頭來看,該公司去年的每股收益增長並不值得興奮,因為它公佈了令人失望的66%的降幅。因此,三年前的整體收益也下降了18%。因此,公平地説,最近的收益增長對公司來説是不可取的。
將這一中期收益軌跡與大盤一年增長15%的預期進行比較,可以看出這是一個令人不快的前景。
有鑑於此,中國三江精細化工的市盈率低於大多數其他公司也是可以理解的。然而,我們認為,盈利縮水不太可能帶來長期穩定的市盈率,這可能會讓股東們未來感到失望。即使只是維持這樣的價格也可能很難實現,因為最近的收益趨勢已經在拖累股價。
中國三江精細化工市盈率的底線
最近的股價飆升不足以將中國三江精細化工的市盈率推高至接近市場中值的水平。一般來説,我們傾向於限制市盈率的使用,以確定市場對公司整體健康狀況的看法。
正如我們懷疑的那樣,我們對中國三江精細化工的調查顯示,考慮到市場將會增長,該公司中期盈利縮水是導致其市盈率較低的原因之一。在這個階段,投資者認為盈利改善的潛力還不夠大,不足以證明提高市盈率是合理的。如果近期的中期盈利趨勢繼續下去,在這種情況下,很難看到股價在不久的將來向任何一個方向強勁移動。
在您採取下一步之前,您應該瞭解中國三江精細化工的3個警示標誌我們已經發現了。
如果這些風險讓你重新考慮對中國三江精細化工的看法,探索我們的高質量股票互動列表,以瞭解還有什麼。
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本文由Simply Wall St.撰寫,具有概括性。我們僅使用不偏不倚的方法提供基於歷史數據和分析師預測的評論,我們的文章並不打算作為財務建議。它不構成買賣任何股票的建議,也沒有考慮你的目標或你的財務狀況。我們的目標是為您帶來由基本面數據驅動的長期重點分析。請注意,我們的分析可能不會將最新的對價格敏感的公司公告或定性材料考慮在內。Simply Wall St.對上述任何一隻股票都沒有持倉。