The Superland Group Holdings Limited (HKG:368) share price has fared very poorly over the last month, falling by a substantial 27%. The drop over the last 30 days has capped off a tough year for shareholders, with the share price down 23% in that time.
In spite of the heavy fall in price, given about half the companies in Hong Kong have price-to-earnings ratios (or "P/E's") above 9x, you may still consider Superland Group Holdings as a highly attractive investment with its 4.1x P/E ratio. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's so limited.
Superland Group Holdings certainly has been doing a great job lately as it's been growing earnings at a really rapid pace. One possibility is that the P/E is low because investors think this strong earnings growth might actually underperform the broader market in the near future. If that doesn't eventuate, then existing shareholders have reason to be quite optimistic about the future direction of the share price.
SEHK:368 Price to Earnings Ratio vs Industry March 25th 2024 Although there are no analyst estimates available for Superland Group Holdings, 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?
Superland Group Holdings' P/E ratio would be typical for a company that's expected to deliver very poor growth or even falling earnings, and importantly, perform much worse than the market.
If we review the last year of earnings growth, the company posted a terrific increase of 301%. EPS has also lifted 7.3% in aggregate from three years ago, mostly thanks to the last 12 months of growth. Therefore, it's fair to say the earnings growth recently has been respectable for the company.
Comparing that to the market, which is predicted to deliver 22% growth in the next 12 months, the company's momentum is weaker based on recent medium-term annualised earnings results.
In light of this, it's understandable that Superland Group Holdings' P/E sits below the majority of other companies. Apparently many shareholders weren't comfortable holding on to something they believe will continue to trail the bourse.
The Bottom Line On Superland Group Holdings' P/E
Superland Group Holdings' P/E looks about as weak as its stock price lately. Using the price-to-earnings ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.
We've established that Superland Group Holdings maintains its low P/E on the weakness of its recent three-year growth being lower than the wider market forecast, as expected. 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 rising strongly in the near future under these circumstances.
It's always necessary to consider the ever-present spectre of investment risk. We've identified 5 warning signs with Superland Group Holdings (at least 3 which are significant), and understanding these should be part of your investment process.
Of course, you might also be able to find a better stock than Superland Group Holdings. So you may wish to see this free collection of other companies that have reasonable P/E ratios and have grown earnings strongly.
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Superland Group Holdings Limited(HKG: 368)的股價在上個月表現非常糟糕,大幅下跌了27%。過去30天的下跌結束了股東艱難的一年,當時股價下跌了23%。
儘管價格大幅下跌,但鑑於香港約有一半的公司的市盈率(或 “市盈率”)高於9倍,您仍然可以將Superland Group Holdings的市盈率視爲具有4.1倍市盈率的極具吸引力的投資。但是,僅按面值計算市盈率是不明智的,因爲可以解釋爲什麼市盈率如此有限。
Superland Group Holdings最近確實做得很好,因爲它的收益增長速度非常快。一種可能性是市盈率很低,因爲投資者認爲這種強勁的收益增長在不久的將來實際上可能低於整個市場。如果最終沒有發生這種情況,那麼現有股東就有理由對股價的未來走向非常樂觀。