CHYY Development Group Limited (HKG:8128) shareholders would be excited to see that the share price has had a great month, posting a 27% gain and recovering from prior weakness. Looking further back, the 18% rise over the last twelve months isn't too bad notwithstanding the strength over the last 30 days.
After such a large jump in price, you could be forgiven for thinking CHYY Development Group is a stock to steer clear of with a price-to-sales ratios (or "P/S") of 3.1x, considering almost half the companies in Hong Kong's Commercial Services industry have P/S ratios below 0.4x. However, the P/S might be quite high for a reason and it requires further investigation to determine if it's justified.
View our latest analysis for CHYY Development Group
SEHK:8128 Price to Sales Ratio vs Industry November 15th 2023
What Does CHYY Development Group's P/S Mean For Shareholders?
As an illustration, revenue has deteriorated at CHYY Development Group over the last year, which is not ideal at all. One possibility is that the P/S is high because investors think the company will still do enough to outperform the broader industry in the near future. If not, then existing shareholders may be quite nervous about the viability of the share price.
Want the full picture on earnings, revenue and cash flow for the company? Then our free report on CHYY Development Group will help you shine a light on its historical performance.
Is There Enough Revenue Growth Forecasted For CHYY Development Group?
There's an inherent assumption that a company should far outperform the industry for P/S ratios like CHYY Development Group's to be considered reasonable.
In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 25%. The last three years don't look nice either as the company has shrunk revenue by 71% in aggregate. So unfortunately, we have to acknowledge that the company has not done a great job of growing revenue over that time.
In contrast to the company, the rest of the industry is expected to grow by 11% over the next year, which really puts the company's recent medium-term revenue decline into perspective.
In light of this, it's alarming that CHYY Development Group's P/S sits above the majority of other companies. Apparently many investors in the company are way more bullish than recent times would indicate and aren't willing to let go of their stock at any price. There's a very good chance existing shareholders are setting themselves up for future disappointment if the P/S falls to levels more in line with the recent negative growth rates.
What Does CHYY Development Group's P/S Mean For Investors?
Shares in CHYY Development Group have seen a strong upwards swing lately, which has really helped boost its P/S figure. While the price-to-sales ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of revenue expectations.
Our examination of CHYY Development Group revealed its shrinking revenue over the medium-term isn't resulting in a P/S as low as we expected, given the industry is set to grow. Right now we aren't comfortable with the high P/S as this revenue performance is highly unlikely to support such positive sentiment for long. Should recent medium-term revenue trends persist, it would pose a significant risk to existing shareholders' investments and prospective investors will have a hard time accepting the current value of the stock.
There are also other vital risk factors to consider and we've discovered 2 warning signs for CHYY Development Group (1 is significant!) that you should be aware of before investing here.
If you're unsure about the strength of CHYY Development Group's business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.
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.
CHYY Development Group Limited(HKG: 8128)股東會很高興看到股價表現不錯,上漲了27%,並從先前的疲軟中恢復過來。再往前看,儘管在過去30天中表現強勁,但在過去十二個月中增長了18%,這還算不錯。
在價格大幅上漲之後,考慮到香港商業服務行業將近一半的公司的市盈率低於0.4倍,你認爲CHYY Development Group是一隻值得避開的股票,其市售率(或 “市盈率”)爲3.1倍,這是可以原諒的。但是,市盈率很高可能是有原因的,需要進一步調查才能確定其是否合理。
查看我們對CHYY開發集團的最新分析
香港交易所:8128 市銷比與行業的比率 2023 年 11 月 15 日
CHYY 發展集團的市盈率對股東意味着什麼?
舉例來說,去年,CHYY Development Group的收入有所下降,這根本不理想。一種可能性是市盈率很高,因爲投資者認爲該公司的表現仍然足以在不久的將來跑贏整個行業。如果不是,那麼現有股東可能會對股價的可行性感到非常緊張。
想全面了解公司的收益、收入和現金流嗎?然後,我們關於CHYY Development Group的免費報告將幫助您了解其歷史表現。
預計CHYY開發集團的收入增長是否足夠?
人們固有的假設是,如果像CHYY Development Group這樣的市盈率被認爲是合理的,公司的表現應該遠遠超過該行業。
有鑑於此,令人震驚的是,CHYY Development Group的市盈率高於大多數其他公司。顯然,該公司的許多投資者比最近所表明的要看漲得多,他們不願以任何價格拋售股票。如果市盈率降至與最近的負增長率更加一致的水平,現有股東很有可能爲未來的失望做好準備。
CHYY 開發集團的市盈率對投資者意味着什麼?
CHYY Development Group的股價最近出現了強勁的上漲波動,這確實有助於提高其市盈率。儘管市售比率不應該成爲決定你是否買入股票的決定性因素,但它是衡量收入預期的有力晴雨表。
我們對CHYY Development Group的審查顯示,鑑於該行業必將增長,其中期收入萎縮並未導致市盈率像我們預期的那樣低。目前,我們對高市盈率不滿意,因爲這種收入表現極不可能長期支撐這種樂觀情緒。如果最近的中期收入趨勢持續下去,將對現有股東的投資構成重大風險,潛在投資者將很難接受股票的當前價值。
還有其他重要的風險因素需要考慮,我們發現了CHYY Development Group的2個警告信號(其中一個很重要!)在這裏投資之前,你應該意識到這一點。
如果你不確定CHYY Development Group的業務實力,爲什麼不瀏覽我們爲你可能錯過的其他公司提供的具有堅實業務基礎的股票互動清單。