Putian Communication Group Limited (HKG:1720) shareholders won't be pleased to see that the share price has had a very rough month, dropping 27% and undoing the prior period's positive performance. Instead of being rewarded, shareholders who have already held through the last twelve months are now sitting on a 37% share price drop.
Although its price has dipped substantially, Putian Communication Group may still be sending bullish signals at the moment with its price-to-earnings (or "P/E") ratio of 6.6x, since almost half of all companies in Hong Kong have P/E ratios greater than 10x and even P/E's higher than 19x are not unusual. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's limited.
For instance, Putian Communication Group's receding earnings in recent times would have to be some food for thought. It might be that many expect the disappointing earnings performance to continue or accelerate, which has repressed the P/E. However, if this doesn't eventuate then existing shareholders may be feeling optimistic about the future direction of the share price.
SEHK:1720 Price to Earnings Ratio vs Industry June 19th 2024 Although there are no analyst estimates available for Putian Communication Group, take a look at this free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow.
Does Growth Match The Low P/E?
Putian Communication Group's P/E ratio would be typical for a company that's only expected to deliver limited growth, and importantly, perform worse than 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 69%. The last three years don't look nice either as the company has shrunk EPS by 76% in aggregate. So unfortunately, we have to acknowledge that the company has not done a great job of growing earnings over that time.
In contrast to the company, the rest of the market is expected to grow by 21% over the next year, which really puts the company's recent medium-term earnings decline into perspective.
With this information, we are not surprised that Putian Communication Group is trading at a P/E lower than the market. 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. There's potential for the P/E to fall to even lower levels if the company doesn't improve its profitability.
The Key Takeaway
Putian Communication Group's P/E has taken a tumble along with its share price. 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 Putian Communication Group 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.
It is also worth noting that we have found 4 warning signs for Putian Communication Group (2 shouldn't be ignored!) that you need to take into consideration.
If these risks are making you reconsider your opinion on Putian Communication Group, explore our interactive list of high quality stocks to get an idea of what else is out there.
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Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
Putian Communication Group Limited(HKG:1720)的股东们不会因为股价在一个非常困难的月份中下跌27%,从而消除先前时期的积极表现而感到高兴。相反,已经持有该股票的股东现在正在面临37%的股价下跌。
尽管其价格已大幅下跌,但目前的Putian Communication Group可能仍在发出积极信号,其市盈率(或“P / E”)为6.6倍,因为香港近一半以上的公司的市盈率均大于10倍,甚至市盈率高于19倍并不少见。尽管如此,不能仅仅将市盈率视为实际情况,因为可能有限制的原因。
例如,近期 Putian Communication Group 的收益不断下降可能会引起人们深思。许多人可能预计令人失望的收益表现会继续或加速,这已经抑制了市盈率。然而,如果这种情况未能实现,现有股东可能对股价未来的走向感到乐观。
SEHK:1720 市盈率与行业板块比较(2024年6月19日)虽然没有分析师的预测可用于 Putian Communication Group,但是可以查看这个免费数据丰富的可视化图表,以了解该公司在收益,营业收入和现金流方面的表现如何。
增长是否与低市盈率相匹配?
Putian Communication Group 的市盈率将是一个典型的预期仅有有限增长并且更重要的是表现不如市场的公司。
根据这个信息,我们不奇怪 Putian Communication Group 的市盈率低于市场。然而,我们认为收益缩减不太可能导致长期稳定的市盈率,这可能会让股东在未来感到失望。如果公司不改善其盈利能力,市盈率有可能下降到更低的水平。
重要提示
Putian Communication Group 的市盈率随着股价一起下跌。一般而言,我们更喜欢仅限制使用市盈率来确定市场对公司整体健康状况的看法。
正如我们所怀疑的那样,我们对 Putian Communication Group 的调查表明,其中期收益的下降加剧了其低市盈率的影响,考虑到市场正在增长。在这个阶段,投资者觉得尽管市盈率低,但收益改善的潜力还不足以证明合理的市盈率。如果最近的中期收益趋势继续下去,在这些情况下难以看到股价在不久的将来有强劲的上升或下降。
值得注意的是,我们已经发现 Putian Communication Group 存在4个值得警惕的迹象(其中2个不应被忽视!),你需要考虑这些迹象。
如果这些风险让您重新考虑 Putian Communication Group 的投资意见,请浏览我们的高质量股票互动列表,以了解其他的股票。