Chaoda Modern Agriculture (Holdings) Limited (HKG:682) shareholders that were waiting for something to happen have been dealt a blow with a 52% share price drop in the last month. Instead of being rewarded, shareholders who have already held through the last twelve months are now sitting on a 29% share price drop.
Even after such a large drop in price, you could still be forgiven for feeling indifferent about Chaoda Modern Agriculture (Holdings)'s P/S ratio of 0.6x, since the median price-to-sales (or "P/S") ratio for the Food industry in Hong Kong is about the same. Although, it's not wise to simply ignore the P/S without explanation as investors may be disregarding a distinct opportunity or a costly mistake.
SEHK:682 Price to Sales Ratio vs Industry July 19th 2024
How Has Chaoda Modern Agriculture (Holdings) Performed Recently?
For instance, Chaoda Modern Agriculture (Holdings)'s receding revenue in recent times would have to be some food for thought. It might be that many expect the company to put the disappointing revenue performance behind them over the coming period, which has kept the P/S from falling. If not, then existing shareholders may be a little nervous about the viability of the share price.
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 Chaoda Modern Agriculture (Holdings)'s earnings, revenue and cash flow.
How Is Chaoda Modern Agriculture (Holdings)'s Revenue Growth Trending?
There's an inherent assumption that a company should be matching the industry for P/S ratios like Chaoda Modern Agriculture (Holdings)'s to be considered reasonable.
Taking a look back first, the company's revenue growth last year wasn't something to get excited about as it posted a disappointing decline of 5.1%. That put a dampener on the good run it was having over the longer-term as its three-year revenue growth is still a noteworthy 16% in total. Although it's been a bumpy ride, it's still fair to say the revenue growth recently has been mostly respectable for the company.
This is in contrast to the rest of the industry, which is expected to grow by 8.2% over the next year, materially higher than the company's recent medium-term annualised growth rates.
In light of this, it's curious that Chaoda Modern Agriculture (Holdings)'s P/S sits in line with the majority of other companies. 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/S falls to levels more in line with recent growth rates.
The Final Word
With its share price dropping off a cliff, the P/S for Chaoda Modern Agriculture (Holdings) looks to be in line with the rest of the Food industry. It's argued the price-to-sales ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.
Our examination of Chaoda Modern Agriculture (Holdings) revealed its poor three-year revenue trends aren't resulting in a lower P/S as per our expectations, given they look worse than current industry outlook. When we see weak revenue with slower than industry growth, we suspect the share price is at risk of declining, bringing the P/S back in line with expectations. Unless the recent medium-term conditions improve, it's hard to accept the current share price as fair value.
It is also worth noting that we have found 2 warning signs for Chaoda Modern Agriculture (Holdings) (1 is a bit concerning!) that you need to take into consideration.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
在过去的一个月里,Chaoda Modern Agriculture (Holdings) Limited (HKG:682)的股价下跌了52%,等待着发生一些事情的股东遭受了打击。相反,已经持有股票的股东们经历了一个29%的股价下跌,不但没有得到奖励,反而受到了惩罚。
即使价格大跌,你仍然可能会对Chaoda Modern Agriculture (Holdings)的市销率0.6倍感到冷漠,因为香港食品行业的中位数市销率大约相同。然而,不明确解释市销率并不明智,因为投资者可能会忽略某种独特的机会或代价高昂的错误。
SEHK:682市销率与行业板块2024年7月19日的对比
Chaoda Modern Agriculture (Holdings)的近况如何?
比如,Chaoda Modern Agriculture (Holdings) 最近的营业收入下降必须要引起人们的关注。可能许多人期待该公司在未来一段时期内将令人失望的营收表现抛之脑后,这也使得市销率没有下降。如果没有,那么现有股东将对股价的可行性感到有些紧张。
我们没有分析师的预测,但你可以查看关于Chaoda Modern Agriculture (Holdings)收益、营业收入和现金流的免费报告,来了解公司最近的趋势如何为未来做好准备。
Chaoda Modern Agriculture (Holdings)的营业收入增长情况如何?
认为一家公司应该与行业板块的市销率相匹配,才能被认为是合理的,这是一个固有假设,如Chaoda Modern Agriculture (Holdings)的市销率,常让人感到困惑。
鉴于此,Chaoda Modern Agriculture (Holdings)的市销率与其他大部分公司保持一致,这显得很好奇。似乎大多数投资者忽略了相当有限的最近增长率,并愿意为接触到该股付出代价。如果市销率跌至与最近增长率相符合的水平,他们可能正在为未来的失望做出准备。
最终结论
随着其股价暴跌,Chaoda Modern Agriculture (Holdings)的市销率与食品行业的其余部分保持一致。虽然市销率被认为是某些行业内价值不佳的度量标准,但它是一种强大的业务情绪指标。
我们对Chaoda Modern Agriculture (Holdings)的审查显示,其不良的三年营收趋势并没有导致我们预期的市销率降低,因为它们看起来比当前行业前景更糟糕。当我们看到营收疲软且增长速度低于行业平均水平时,我们认为股价有下跌的风险,将市销率带回符合预期的水平。除非最近的中期情况改善,否则很难接受当前股价的公平价值。