Yau Lee Holdings Limited (HKG:406) shares have had a really impressive month, gaining 26% after a shaky period beforehand. Notwithstanding the latest gain, the annual share price return of 8.2% isn't as impressive.
In spite of the firm bounce in price, you could still be forgiven for feeling indifferent about Yau Lee Holdings' P/E ratio of 10.2x, since the median price-to-earnings (or "P/E") ratio in Hong Kong is also close to 8x. Although, it's not wise to simply ignore the P/E without explanation as investors may be disregarding a distinct opportunity or a costly mistake.
As an illustration, earnings have deteriorated at Yau Lee Holdings over the last year, which is not ideal at all. One possibility is that the P/E is moderate because investors think the company might still do enough to be in line with the broader market in the near future. If not, then existing shareholders may be a little nervous about the viability of the share price.
See our latest analysis for Yau Lee Holdings
SEHK:406 Price Based on Past Earnings November 9th 2022 Want the full picture on earnings, revenue and cash flow for the company? Then our
free report on Yau Lee Holdings will help you shine a light on its historical performance.
Does Growth Match The P/E?
There's an inherent assumption that a company should be matching the market for P/E ratios like Yau Lee Holdings' to be considered reasonable.
Retrospectively, the last year delivered a frustrating 55% decrease to the company's bottom line. Even so, admirably EPS has lifted 127% in aggregate from three years ago, notwithstanding the last 12 months. Accordingly, while they would have preferred to keep the run going, shareholders would probably welcome the medium-term rates of earnings growth.
Weighing that recent medium-term earnings trajectory against the broader market's one-year forecast for expansion of 18% shows it's noticeably more attractive on an annualised basis.
In light of this, it's curious that Yau Lee Holdings' P/E sits in line with the majority of other companies. Apparently some shareholders believe the recent performance is at its limits and have been accepting lower selling prices.
The Final Word
Yau Lee Holdings appears to be back in favour with a solid price jump getting its P/E back in line with most other companies. It's argued the price-to-earnings ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.
We've established that Yau Lee Holdings currently trades on a lower than expected P/E since its recent three-year growth is higher than the wider market forecast. When we see strong earnings with faster-than-market growth, we assume potential risks are what might be placing pressure on the P/E ratio. At least the risk of a price drop looks to be subdued if recent medium-term earnings trends continue, but investors seem to think future earnings could see some volatility.
And what about other risks? Every company has them, and we've spotted 4 warning signs for Yau Lee Holdings you should know about.
You might be able to find a better investment than Yau Lee Holdings. If you want a selection of possible candidates, check out this free list of interesting companies that trade on a P/E below 20x (but have proven they can grow earnings).
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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.
友利集團有限公司(HKG:406)股價經歷了令人印象深刻的一個月,在經歷了一段不穩定的時期後上漲了26%。儘管最近股價上漲,但8.2%的年度股價回報率並不令人印象深刻。
儘管股價強勁反彈,但你對友利控股10.2倍的市盈率無動於衷也是情有可原的,因為香港股市的市盈率中值也接近8倍。儘管如此,在沒有解釋的情況下簡單地忽視市盈率是不明智的,因為投資者可能會忽視一個獨特的機會或代價高昂的錯誤。
舉例來説,友利控股的收益在過去一年裏一直在惡化,這根本不是理想的情況。一種可能性是,市盈率是温和的,因為投資者認為,該公司在不久的將來可能仍會採取足夠的措施,與大盤保持一致。如果不是,那麼現有股東可能會對股價的生存能力感到有點緊張。
查看我們對友利控股的最新分析
聯交所:406基於過去收益的價格2022年11月9日想要了解公司的收益、收入和現金流的全貌嗎?那麼我們的
免費關於友利控股的報道將幫助你瞭解其歷史表現。
增長是否與市盈率匹配?
有一種固有的假設,即一家公司應該與市場匹配,才能讓優利控股這樣的市盈率被認為是合理的。
回顧過去一年,該公司的利潤令人沮喪地下降了55%。即便如此,令人欽佩的是,儘管在過去的12個月裏,每股收益比三年前累計上漲了127%。因此,儘管股東們更願意繼續運營,但他們可能會歡迎中期的盈利增長率。
將最近的中期收益軌跡與大盤一年內增長18%的預測進行比較,結果顯示,按年率計算,這一數字明顯更具吸引力。
有鑑於此,令人好奇的是,友利控股的市盈率與大多數其他公司的市盈率持平。顯然,一些股東認為最近的表現已經到了極限,並一直在接受較低的售價。
最後的結論
友利控股(Yau Lee Holdings)似乎再次受到青睞,股價穩步上漲,使其市盈率恢復到與大多數其他公司的水平。有人認為,市盈率是衡量某些行業價值的次要指標,但它可以成為一個強大的商業信心指標。
我們已經確定,友利控股目前的市盈率低於預期,因為該公司最近三年的增長高於更廣泛的市場預測。當我們看到強勁的收益和快於市場的增長時,我們認為潛在的風險可能會給市盈率帶來壓力。至少,如果近期的中期盈利趨勢持續下去,股價下跌的風險看起來會較低,但投資者似乎認為,未來的盈利可能會出現一些波動。
還有其他風險呢?每家公司都有它們,我們已經發現友利控股的4個警告標誌你應該知道。
你也許能找到比友利控股更好的投資。如果您想要選擇可能的候選人,請查看以下內容免費令人感興趣的市盈率低於20倍的公司名單(但已證明它們可以增加收益)。
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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。