Chinney Kin Wing Holdings Limited (HKG:1556) shareholders would be excited to see that the share price has had a great month, posting a 38% gain and recovering from prior weakness. Taking a wider view, although not as strong as the last month, the full year gain of 19% is also fairly reasonable.
Even after such a large jump in price, Chinney Kin Wing Holdings' price-to-earnings (or "P/E") ratio of 3.8x might still make it look like a strong buy right now compared to the market in Hong Kong, where around half of the companies have P/E ratios above 10x and even P/E's above 20x are quite common. 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.
Recent times have been quite advantageous for Chinney Kin Wing Holdings as its earnings have been rising very briskly. It might be that many expect the strong earnings performance to degrade substantially, which has repressed the P/E. If that doesn't eventuate, then existing shareholders have reason to be quite optimistic about the future direction of the share price.
Check out our latest analysis for Chinney Kin Wing Holdings
Although there are no analyst estimates available for Chinney Kin Wing Holdings, take a look at this free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow.
What Are Growth Metrics Telling Us About The Low P/E?
There's an inherent assumption that a company should far underperform the market for P/E ratios like Chinney Kin Wing Holdings' to be considered reasonable.
Retrospectively, the last year delivered an exceptional 44% gain to the company's bottom line. Pleasingly, EPS has also lifted 67% in aggregate from three years ago, thanks to the last 12 months of growth. Therefore, it's fair to say the earnings growth recently has been superb for the company.
Weighing that recent medium-term earnings trajectory against the broader market's one-year forecast for expansion of 21% shows it's noticeably less attractive on an annualised basis.
With this information, we can see why Chinney Kin Wing Holdings is trading at a P/E lower than the market. It seems most investors are expecting to see the recent limited growth rates continue into the future and are only willing to pay a reduced amount for the stock.
The Key Takeaway
Chinney Kin Wing Holdings' recent share price jump still sees its P/E sitting firmly flat on the ground. 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 Chinney Kin Wing 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. Unless the recent medium-term conditions improve, they will continue to form a barrier for the share price around these levels.
Having said that, be aware Chinney Kin Wing Holdings is showing 2 warning signs in our investment analysis, you should know about.
If P/E ratios interest you, you may wish to see this free collection of other companies that have grown earnings strongly and trade on P/E's below 20x.
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.
Chinney Kin Wing Holdings Limited (HKG:1556)の株主は、株価が大幅に上昇し、先行の弱点から回復し、優れた1か月を過ごしたことを喜ばしく思うでしょう。より広い視野を持つと、前月ほど強くはなかったが、1年間で19%の利益は比較的妥当です。
Chinney Kin Wing Holdingsにとって最近の時代は非常に有利であり、配当は非常に急速に上昇しています。強い利益の成果を大幅に低下させることを多くの人々が期待しているかもしれず、P/E比が抑えられている状態になっています。もしそうでない場合は、既存の株主は株価の将来的な方向についてかなり楽観的である理由があります。
Chinney Kin Wing Holdingsについての最新の分析について確認してください。
Chinney Kin Wing Holdingsのアナリスト予想はありませんが、この無料のデータ豊富な視覚化を参照して、同社の収益、売上高、キャッシュフローなどを調べてください。
低P/Eから成長メトリックは何を示唆していますか?
Chinney Kin Wing HoldingsのP/E比という市場に比べて合理的であるための固有の前提があります。
これらの情報から、Chinney Kin Wing Holdingsが市場よりも低いP/Eで取引されている理由がわかります。株式投資家の大多数が、最近の限定された成長率が将来も続くと予想しており、そのため株式に割り当てる金額を削減する準備をしている為です。
重要なポイント
Chinney Kin Wing Holdingsの最近の株価上昇は、P/Eに大きな影響を与えませんでした。 株式を売却すべきかどうかを決定するために価格収益比だけを使用することは賢明ではありませんが、同社の将来の見通しの実用的なガイドとなる可能性があります。
Chinney Kin Wing Holdingsは、広範な市場予測よりも最近の3年間の成長が低いため、P/E比を維持していることがわかりました。この段階では、EPSの改善の可能性が十分にあるとは感じていないため、投資家はP/E比を上昇させるために十分な理由がないと見なしています。 これらの水準を中心にして株価の障壁を形成し続けるため、中期的な条件が改善しない限り、そうなってしまうでしょう。
ただし、その分、Chinney Kin Wing Holdingsは、投資分析で2つの警告信号を示しています。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。