Jiangsu Sunshine Co., Ltd. (SHSE:600220) shares have had a horrible month, losing 27% after a relatively good period beforehand. Looking back over the past twelve months the stock has been a solid performer regardless, with a gain of 11%.
Although its price has dipped substantially, you could still be forgiven for feeling indifferent about Jiangsu Sunshine's P/E ratio of 30.8x, since the median price-to-earnings (or "P/E") ratio in China is also close to 32x. While this might not raise any eyebrows, if the P/E ratio is not justified investors could be missing out on a potential opportunity or ignoring looming disappointment.
Recent times have been quite advantageous for Jiangsu Sunshine as its earnings have been rising very briskly. The P/E is probably moderate because investors think this strong earnings growth might not be enough to outperform the broader market in the near future. If that doesn't eventuate, then existing shareholders have reason to be feeling optimistic about the future direction of the share price.
See our latest analysis for Jiangsu Sunshine
SHSE:600220 Price Based on Past Earnings September 19th 2022 Want the full picture on earnings, revenue and cash flow for the company? Then our
free report on Jiangsu Sunshine will help you shine a light on its historical performance.
Is There Some Growth For Jiangsu Sunshine?
Jiangsu Sunshine's P/E ratio would be typical for a company that's only expected to deliver moderate growth, and importantly, perform in line with the market.
If we review the last year of earnings growth, the company posted a terrific increase of 198%. As a result, it also grew EPS by 19% in total over the last three years. Therefore, it's fair to say the earnings growth recently has been respectable for the company.
Weighing that recent medium-term earnings trajectory against the broader market's one-year forecast for expansion of 41% shows it's noticeably less attractive on an annualised basis.
With this information, we find it interesting that Jiangsu Sunshine is trading at a fairly similar P/E to the market. It seems most investors are ignoring the fairly limited recent growth rates and are willing to pay up for exposure to the stock. They may be setting themselves up for future disappointment if the P/E falls to levels more in line with recent growth rates.
The Key Takeaway
With its share price falling into a hole, the P/E for Jiangsu Sunshine looks quite average now. We'd say the price-to-earnings ratio's power isn't primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.
Our examination of Jiangsu Sunshine revealed its three-year earnings trends aren't impacting its P/E as much as we would have predicted, given they look worse than current market expectations. Right now we are uncomfortable with the P/E as this earnings performance isn't likely to support a more positive sentiment for long. If recent medium-term earnings trends continue, it will place shareholders' investments at risk and potential investors in danger of paying an unnecessary premium.
It's always necessary to consider the ever-present spectre of investment risk. We've identified 5 warning signs with Jiangsu Sunshine (at least 2 which don't sit too well with us), and understanding these should be part of your investment process.
You might be able to find a better investment than Jiangsu Sunshine. 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.
江苏阳光股份有限公司。(上海证券交易所:600220)股票经历了一个糟糕的月份,在经历了一段相对较好的时期后,下跌了27%。回顾过去12个月,该股表现稳健,涨幅达11%。
尽管江苏阳光的股价大幅下跌,但你对江苏阳光30.8倍的市盈率无动于衷也是情有可原的,因为中国的市盈率中值也接近32倍。尽管这可能不会令人惊讶,但如果市盈率不合理,投资者可能会错过潜在的机会,或者忽视迫在眉睫的失望。
最近一段时间对江苏阳光来说相当有利,因为它的收益一直在快速增长。市盈率可能是温和的,因为投资者认为这种强劲的收益增长可能不足以在不久的将来跑赢大盘。如果不能实现这一点,那么现有股东有理由对股价的未来走势感到乐观。
查看我们对江苏阳光的最新分析
上海证交所:600220基于过去收益的价格2022年9月19日想要了解公司的收益、收入和现金流的全貌吗?那么我们的
免费江苏阳光的报道将帮助您了解它的历史表现。
江苏阳光有增长吗?
对于一家预计只会实现温和增长,而且重要的是表现与市场一致的公司来说,江苏阳光的市盈率将是典型的。
如果我们回顾过去一年的收益增长,该公司公布了198%的惊人增长。因此,在过去三年中,它的每股收益总共增长了19%。因此,公平地说,最近的收益增长对公司来说是可敬的。
将最近的中期收益轨迹与大盘一年增长41%的预测进行比较,结果显示,按年率计算,它的吸引力明显下降。
有了这些信息,我们发现有趣的是,江苏阳光的市盈率与市场相当接近。似乎大多数投资者都忽视了最近相当有限的增长率,并愿意为股票敞口支付高价。如果市盈率下降到与最近的增长率更接近的水平,他们可能会让自己在未来感到失望。
关键的外卖
随着股价跌入低谷,江苏阳光目前的市盈率看起来相当平均。我们会说,市盈率的力量主要不是作为一种估值工具,而是衡量当前投资者的情绪和未来预期。
我们对江苏阳光的调查显示,其三年盈利趋势对市盈率的影响并不像我们预期的那么大,因为它们看起来比目前的市场预期更糟糕。目前,我们对市盈率感到不安,因为这种盈利表现不太可能在很长时间内支持更积极的情绪。如果近期的中期盈利趋势持续下去,将使股东的投资面临风险,潜在投资者面临支付不必要溢价的危险。
总是有必要考虑到投资风险的幽灵无处不在。我们已经确定了江苏阳光的5个预警信号(至少有两个不太适合我们),了解这些应该是你投资过程的一部分。
你也许能找到比江苏阳光更好的投资。如果您想要选择可能的候选人,请查看以下内容免费令人感兴趣的市盈率低于20倍的公司名单(但已证明它们可以增加收益)。
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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。