Unfortunately for some shareholders, the Gain Plus Holdings Limited (HKG:9900) share price has dived 28% in the last thirty days, prolonging recent pain. Looking back over the past twelve months the stock has been a solid performer regardless, with a gain of 11%.
Even after such a large drop in price, Gain Plus Holdings' price-to-earnings (or "P/E") ratio of 5.5x might still make it look like a buy right now compared to the market in Hong Kong, where around half of the companies have P/E ratios above 9x and even P/E's above 18x 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 limited.
Recent times have been quite advantageous for Gain Plus 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 you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's out of favour.
SEHK:9900 Price to Earnings Ratio vs Industry March 1st 2024 Want the full picture on earnings, revenue and cash flow for the company? Then our free report on Gain Plus Holdings will help you shine a light on its historical performance.
Does Growth Match The Low P/E?
In order to justify its P/E ratio, Gain Plus Holdings would need to produce sluggish growth that's trailing the market.
If we review the last year of earnings growth, the company posted a terrific increase of 186%. Pleasingly, EPS has also lifted 40% in aggregate from three years ago, thanks to the last 12 months of growth. Accordingly, shareholders would have probably welcomed those medium-term rates of earnings growth.
This is in contrast to the rest of the market, which is expected to grow by 23% over the next year, materially higher than the company's recent medium-term annualised growth rates.
In light of this, it's understandable that Gain Plus 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.
What We Can Learn From Gain Plus Holdings' P/E?
Gain Plus Holdings' P/E has taken a tumble along with its share price. While the price-to-earnings ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of earnings expectations.
As we suspected, our examination of Gain Plus Holdings revealed its three-year earnings trends are contributing to its low P/E, given they look worse than current market expectations. 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.
Plus, you should also learn about this 1 warning sign we've spotted with Gain Plus Holdings.
Of course, you might find a fantastic investment by looking at a few good candidates. So take a peek at this free list of companies with a strong growth track record, trading on a low P/E.
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对于一些股东来说,不幸的是,Gain Plus Holdings Limited(HKG: 9900)的股价在过去三十天中下跌了28%,延续了最近的痛苦。回顾过去的十二个月,无论如何,该股表现良好,涨幅为11%。
即使在价格大幅下跌之后,Gain Plus Holdings的市盈率(或 “市盈率”)为5.5倍,与香港市场相比,目前仍可能看起来像买入。在香港,约有一半公司的市盈率超过9倍,甚至市盈率超过18倍也很常见。但是,仅按面值计算市盈率是不明智的,因为可以解释为什么市盈率有限。
最近对Gain Plus Holdings来说非常有利,因为其收益一直在快速增长。许多人可能预计,强劲的收益表现将大幅下滑,这抑制了市盈率。如果你喜欢该公司,你会希望情况并非如此,这样你就有可能在股票失宠的时候买入一些股票。