Jiading International Group Holdings Ltd (HKG:8153) shareholders that were waiting for something to happen have been dealt a blow with a 30% share price drop in the last month. The recent drop completes a disastrous twelve months for shareholders, who are sitting on a 59% loss during that time.
In spite of the heavy fall in price, when almost half of the companies in Hong Kong's Media industry have price-to-sales ratios (or "P/S") below 0.7x, you may still consider Jiading International Group Holdings as a stock probably not worth researching with its 1.7x P/S ratio. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's as high as it is.
See our latest analysis for Jiading International Group Holdings
How Jiading International Group Holdings Has Been Performing
Jiading International Group Holdings certainly has been doing a great job lately as it's been growing its revenue at a really rapid pace. The P/S ratio is probably high because investors think this strong revenue growth will be enough to outperform the broader industry in the near future. However, if this isn't the case, investors might get caught out paying too much for the stock.
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 Jiading International Group Holdings' earnings, revenue and cash flow.
What Are Revenue Growth Metrics Telling Us About The High P/S?
There's an inherent assumption that a company should outperform the industry for P/S ratios like Jiading International Group Holdings' to be considered reasonable.
Retrospectively, the last year delivered an exceptional 48% gain to the company's top line. This great performance means it was also able to deliver immense revenue growth over the last three years. Accordingly, shareholders would have been over the moon with those medium-term rates of revenue growth.
Comparing that to the industry, which is only predicted to deliver 19% growth in the next 12 months, the company's momentum is stronger based on recent medium-term annualised revenue results.
With this information, we can see why Jiading International Group Holdings is trading at such a high P/S compared to the industry. It seems most investors are expecting this strong growth to continue and are willing to pay more for the stock.
The Final Word
Despite the recent share price weakness, Jiading International Group Holdings' P/S remains higher than most other companies in the industry. Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.
It's no surprise that Jiading International Group Holdings can support its high P/S given the strong revenue growth its experienced over the last three-year is superior to the current industry outlook. In the eyes of shareholders, the probability of a continued growth trajectory is great enough to prevent the P/S from pulling back. If recent medium-term revenue trends continue, it's hard to see the share price falling strongly in the near future under these circumstances.
You should always think about risks. Case in point, we've spotted 5 warning signs for Jiading International Group Holdings you should be aware of, and 3 of them are a bit concerning.
Of course, profitable companies with a history of great earnings growth are generally safer bets. So you may wish to see this free collection of other companies that have reasonable P/E ratios and have grown earnings strongly.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. 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.
香港メディア業界の半数近くが価格/売上高比率(または「P / S」)が0.7倍以下である中、1.7倍のP / S比率を持つJiading International Group Holdingsを調査に値する株とは考えにくいでしょう。ただし、P / Sを単純に受け入れることは賢明ではなく、それが高い理由があるかもしれないことに注意する必要があります。
Jiading International Group Holdingsの最新分析をご覧ください
Jiading International Group Holdingsの実績
Jiading International Group Holdingsは、収益を本当に急速なペースで成長させているため、最近は素晴らしい仕事をしていると言えます。 P / S比率が高いのは、投資家がこの強力な収益成長が近い将来、広範な業界をアウトパフォームするのに十分だと考えているためでしょう。ただし、これが事実でない場合、投資家は株式を高く買いすぎる可能性があります。
アナリストの予測はありませんが、Jiading International Group Holdingsの収益、売上高、キャッシュフローについての無料レポートをチェックすることで、最近の動向が将来のためにどのように設定されているかを確認できます。
売上高成長のメトリックから何がわかるか
P / S比率がJiading International Group Holdingsのように業界をアウトパフォームするためには、企業が業界に比べて良いパフォーマンスを発揮することが当然という前提があります。
この情報を踏まえると、Jiading International Group Holdingsが業界に比べてP / Sが高い理由がわかります。投資家のほとんどは、この強力な成長が続くことを予想し、株式をより高く買うことを進んで受け入れているようです。
最終的な言葉として
最近の株価の弱さにもかかわらず、Jiading International Group HoldingsのP / S比率は、業界の他のほとんどの企業よりも高いままです。通常、投資決定をする際にP / S比率にあまりにも多くの意味を読み取ることを避けることがありますが、これは市場参加者が会社についてどう考えているかについて多くのことを明らかにすることができます。
Jiading International Group Holdingsが高いP / Sを維持できるのは、過去3年間の収益成長が現在の業界見通しよりも優れているためです。株主から見れば、持続的な成長の軌跡が十分にあるため、P / Sが引き戻されることはないでしょう。最近の中期的な収益傾向が続く場合、これらの状況下では株価が大幅に下落することは考えにくいです。
いつもリスクについて考えるようにしてください。たとえば、 Jading International Group Holdingsについて 気にすべき5つの注意事項 を発見しましたが、そのうちの3つは少し心配です。