Bonny International Holding Limited (HKG:1906) shareholders have had their patience rewarded with a 37% share price jump in the last month. Looking further back, the 13% rise over the last twelve months isn't too bad notwithstanding the strength over the last 30 days.
Since its price has surged higher, given around half the companies in Hong Kong's Luxury industry have price-to-sales ratios (or "P/S") below 0.7x, you may consider Bonny International Holding as a stock to avoid entirely with its 3.3x P/S ratio. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly elevated P/S.
What Does Bonny International Holding's Recent Performance Look Like?
The revenue growth achieved at Bonny International Holding over the last year would be more than acceptable for most companies. It might be that many expect the respectable revenue performance to beat most other companies over the coming period, which has increased investors' willingness to pay up for the stock. 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 Bonny International Holding's earnings, revenue and cash flow.
How Is Bonny International Holding's Revenue Growth Trending?
Bonny International Holding's P/S ratio would be typical for a company that's expected to deliver very strong growth, and importantly, perform much better than the industry.
Taking a look back first, we see that the company managed to grow revenues by a handy 10% last year. Still, lamentably revenue has fallen 38% in aggregate from three years ago, which is disappointing. Therefore, it's fair to say the revenue growth recently has been undesirable for the company.
Comparing that to the industry, which is predicted to deliver 13% growth in the next 12 months, the company's downward momentum based on recent medium-term revenue results is a sobering picture.
With this in mind, we find it worrying that Bonny International Holding's P/S exceeds that of its industry peers. It seems most investors are ignoring the recent poor growth rate and are hoping for a turnaround in the company's business prospects. Only the boldest would assume these prices are sustainable as a continuation of recent revenue trends is likely to weigh heavily on the share price eventually.
The Final Word
Bonny International Holding's P/S has grown nicely over the last month thanks to a handy boost in the share price. 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 Bonny International Holding 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. With a revenue decline on investors' minds, the likelihood of a souring sentiment is quite high which could send the P/S back in line with what we'd expect. If recent medium-term revenue trends continue, it will place shareholders' investments at significant risk and potential investors in danger of paying an excessive premium.
Don't forget that there may be other risks. For instance, we've identified 2 warning signs for Bonny International Holding (1 is a bit concerning) you should be aware of.
If these risks are making you reconsider your opinion on Bonny International Holding, explore our interactive list of high quality stocks to get an idea of what else is out there.
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.
Bonny International Holding Limited(HKG:1906)的股東已經耐心等待了一個月,股價上漲了37%。再往前看,過去十二個月上漲了13%,儘管最近30天的強勢表現並不算太糟糕。
由於Bonny International Holding的股價上漲,而在香港奢侈品行業中約有一半公司的市銷率低於0.7倍,因此您可能會考慮完全避免這隻股票,因爲它的市銷率爲3.3倍。儘管如此,我們需要深入挖掘,以確定市銷率高得多的理性基礎。
Bonny International Holding的最近表現如何?
Bonny International Holding在過去一年實現的營業收入增長對大多數公司來說是可以接受的。這可能意味着許多人預計有可觀的營收表現會在未來時期打敗大多數其它公司,這增加了投資者願意爲該股票買單的意願。如果不能實現這一點,那麼現有股東可能會對股票的存續性有點擔憂。
我們沒有分析師預測,但您可以查看我們關於Bonny International Holding盈利、營收和現金流的免費報告,了解最近的發展趨勢如何使公司走向未來。
Bonny International Holding的營收增長如何發展?
Bonny International Holding的市銷率對於一個預計會實現非常強勁的增長,而且更重要的是,表現要比行業好得多的公司而言,是典型的。
在此情況下,我們發現Bonny International Holding的市銷率超過了同行業公司。看起來大多數投資者忽略了最近的低增長率,並希望公司的業務前景會翻轉。只有最勇敢的人才會認爲這些價格是可持續的,因爲近期的營收趨勢的延續很可能會對股價產生沉重的影響。
最終結論
由於股價的大幅上漲,Bonny International Holding的市銷率在過去一個月內增長了不少。雖然有人認爲市銷率是某些行業內價值的次優指標,但它可以成爲一個重要的業務情緒指標。
我們對Bonny International Holding的審查顯示,中期內營收的下降不會導致P/S低於我們預期的水平,考慮到行業的增長前景。隨着投資者對營收下滑的關注,情緒惡化的可能性相當高,這可能會使P/S恢復到我們預期的水平。如果最近的中期營收趨勢繼續,將會將股東的投資置於巨大的風險之中,而潛在投資者在支付過高溢價方面也有危險。
不要忘記還可能存在其他風險。例如,我們已確定了Bonny International Holding的2個警示信號(其中1個有點令人擔憂),您應該意識到。
如果這些風險使您重新考慮Bonny International Holding,那麼請查看我們的互動高質量股票清單,了解其他可能的選擇。