Jiu Rong Holdings Limited (HKG:2358) shareholders have had their patience rewarded with a 53% share price jump in the last month. Still, the 30-day jump doesn't change the fact that longer term shareholders have seen their stock decimated by the 63% share price drop in the last twelve months.
In spite of the firm bounce in price, you could still be forgiven for feeling indifferent about Jiu Rong Holdings' P/S ratio of 0.2x, since the median price-to-sales (or "P/S") ratio for the Consumer Durables industry in Hong Kong is also close to 0.6x. While this might not raise any eyebrows, if the P/S ratio is not justified investors could be missing out on a potential opportunity or ignoring looming disappointment.
View our latest analysis for Jiu Rong Holdings
SEHK:2358 Price to Sales Ratio vs Industry December 18th 2023
What Does Jiu Rong Holdings' P/S Mean For Shareholders?
Jiu Rong Holdings has been doing a good job lately as it's been growing revenue at a solid pace. One possibility is that the P/S is moderate because investors think this respectable revenue growth might not be enough to outperform the broader industry in the near future. Those who are bullish on Jiu Rong Holdings will be hoping that this isn't the case, so that they can pick up the stock at a lower valuation.
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 Jiu Rong Holdings' earnings, revenue and cash flow.
What Are Revenue Growth Metrics Telling Us About The P/S?
In order to justify its P/S ratio, Jiu Rong Holdings would need to produce growth that's similar to the industry.
Taking a look back first, we see that the company grew revenue by an impressive 16% last year. Pleasingly, revenue has also lifted 34% in aggregate from three years ago, thanks to the last 12 months of growth. Therefore, it's fair to say the revenue growth recently has been superb for the company.
Comparing that to the industry, which is predicted to deliver 34% growth in the next 12 months, the company's momentum is weaker, based on recent medium-term annualised revenue results.
In light of this, it's curious that Jiu Rong Holdings' P/S sits in line with the majority of other companies. Apparently many investors in the company are less bearish than recent times would indicate and aren't willing to let go of their stock right now. 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
Its shares have lifted substantially and now Jiu Rong Holdings' P/S is back within range of the industry median. 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.
We've established that Jiu Rong Holdings' average P/S is a bit surprising since its recent three-year growth is lower than the wider industry forecast. Right now we are uncomfortable with the P/S as this revenue performance isn't likely to support a more positive sentiment for long. Unless there is a significant improvement in the company's medium-term performance, it will be difficult to prevent the P/S ratio from declining to a more reasonable level.
You should always think about risks. Case in point, we've spotted 4 warning signs for Jiu Rong Holdings you should be aware of, and 3 of them are potentially serious.
If companies with solid past earnings growth is up your alley, you may wish to see this free collection of other companies with strong earnings growth and low P/E ratios.
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.
Jiu Rong Holdings Limited (HKG:2358) の株主は、過去1か月間で株価が53%上昇したことで辛抱強さが報われました。しかし、長期の株主は過去12か月間に株価が63%下落した事実は変わりません。
価格の急落にもかかわらず、香港の耐久消費財業界の中央価格売上高比率(または「P/S」比率)が0.6倍に近いため、Jiu Rong HoldingsのP/S比率0.2倍に対して無関心に感じるかもしれません。これは誰も驚かないかもしれませんが、P/S比率が正当化されない場合、投資家は潜在的な機会を逃したり、迫り来る失望を無視したりする可能性があります。
Jiu Rong Holdingsの最新の分析をご覧ください。
SEHK:2358の売上高倍率対業界比較(2023年12月18日)
Jiu Rong HoldingsのP/S比率は株主にとって何を意味するのでしょうか?
Jiu Rong Holdingsは、売上高を堅調に伸ばしているため、最近は良い仕事をしています。1つの可能性は、P/S比率が適度であるため、投資家はこの立派な売上高成長が近い将来の業界全体を上回ることはないと考えているかもしれません。Jiu Rong Holdingsに強気の人々は、P/S比率が低くなるのを待って、株式を低い評価額で購入できることを期待しているでしょう。
アナリスト予測は持っていませんが、無料レポートでJiu Rong Holdingsの収益、売上高、キャッシュフローを確認することで、最近のトレンドが将来会社をどのように設定しているかを確認できます。
このため、Jiu Rong HoldingsのP/S比率が他の多くの企業と同じレベルにあることは興味深いことです。おそらく、多くの投資家は、最近の時代ほど弱気ではなく、現在の株式を手放す意思がないということです。近い将来にP/S比率が最近の成長率に合わせたレベルに落ちた場合、彼らは将来的な失望を招く可能性があります。
その株価は大幅に上がっていて、Jiu Rong HoldingsのP/S比率は業界の中央値の範囲内に戻っています。価格対売上高比率は、一部の業界内での価値の低い尺度であると主張されていますが、これは強力なビジネスセンチメントの指標になり得ます。
Jiu Rong Holdingsの平均P/S比率が少し驚くべきものであることが分かりましたが、最近の3年間の成長が広範な業界予測より低いため、現在の売上高パフォーマンスは長続きしないことから、現時点ではP/S比率に不快感を覚えています。会社の中期的なパフォーマンスに大幅な改善がない限り、P/S比率をより合理的なレベルに減らすことは困難になるでしょう。
いつもリスクについて考えるべきです。例えば、私たちはJiu Rong Holdingsの4つの警告サインを発見し、そのうちの3つは深刻な可能性があります。
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。