Sino-Ocean Service Holding Limited (HKG:6677) shares have had a horrible month, losing 28% after a relatively good period beforehand. The recent drop completes a disastrous twelve months for shareholders, who are sitting on a 69% loss during that time.
Although its price has dipped substantially, Sino-Ocean Service Holding may still be sending bearish signals at the moment with its price-to-earnings (or "P/E") ratio of 12.7x, since almost half of all companies in Hong Kong have P/E ratios under 9x and even P/E's lower than 5x are not unusual. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the elevated P/E.
While the market has experienced earnings growth lately, Sino-Ocean Service Holding's earnings have gone into reverse gear, which is not great. One possibility is that the P/E is high because investors think this poor earnings performance will turn the corner. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.
SEHK:6677 Price to Earnings Ratio vs Industry June 17th 2024 Keen to find out how analysts think Sino-Ocean Service Holding's future stacks up against the industry? In that case, our free report is a great place to start.
Is There Enough Growth For Sino-Ocean Service Holding?
There's an inherent assumption that a company should outperform the market for P/E ratios like Sino-Ocean Service Holding's to be considered reasonable.
Taking a look back first, the company's earnings per share growth last year wasn't something to get excited about as it posted a disappointing decline of 44%. This means it has also seen a slide in earnings over the longer-term as EPS is down 88% in total over the last three years. Therefore, it's fair to say the earnings growth recently has been undesirable for the company.
Shifting to the future, estimates from the two analysts covering the company suggest earnings should grow by 56% per annum over the next three years. That's shaping up to be materially higher than the 16% each year growth forecast for the broader market.
In light of this, it's understandable that Sino-Ocean Service Holding's P/E sits above the majority of other companies. Apparently shareholders aren't keen to offload something that is potentially eyeing a more prosperous future.
The Bottom Line On Sino-Ocean Service Holding's P/E
Despite the recent share price weakness, Sino-Ocean Service Holding's P/E remains higher than most other companies. Typically, we'd caution against reading too much into price-to-earnings ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.
We've established that Sino-Ocean Service Holding maintains its high P/E on the strength of its forecast growth being higher than the wider market, as expected. At this stage investors feel the potential for a deterioration in earnings isn't great enough to justify a lower P/E ratio. Unless these conditions change, they will continue to provide strong support to the share price.
It is also worth noting that we have found 2 warning signs for Sino-Ocean Service Holding that you need to take into consideration.
You might be able to find a better investment than Sino-Ocean Service Holding. If you want a selection of possible candidates, check out this free list of interesting companies that trade on a low P/E (but have proven they can grow earnings).
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.
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Sino-Ocean Service Holding Limited (HKG:6677)株は、前月から28%の大幅な下落を経験し、以前に比べると比較的良い期間を過ごした後に大きなダメージが出た。最近の下落で株主にとって惨めな12か月が終わり、その1年間で株主は69%の損失を被った。
株価が大幅に下落していても、Sino-Ocean Service Holdingの株価収益率(P/E)比率が12.7倍に高いため、現在は弱気なヒントを出している可能性がある。香港の企業の半数近くがP/E比率が9倍以下であり、5倍以下のP/Eも珍しくないためである。しかしながら、高いP/Eには合理的な根拠があるかどうかについては、もう少し深く掘り下げる必要がある。
市場が最近収益成長を経験している中、Sino-Ocean Service Holdingの収益は逆転しているため、あまり良くありません。可能性の一つは、P/Eが高いのは、この悪い収益パフォーマンスが好転すると投資家が考えているためです。そうでないと、特に理由がないのにかなり高い価格を払うことになります。
SEHK:6677株価収益率vs業種 6月17日2024年アナリストがSino-Ocean Service Holdingの将来を業界と比較してどう考えているかを知りたいと思っていますか?その場合、私たちの無料レポートは素晴らしい出発点となります。
Sino-Ocean Service Holdingに十分な成長がありますか?
Sino-Ocean Service HoldingのP/E比率のような場合、企業が市場を上回る必要があるという前提があります。
つまり、Sino-Ocean Service HoldingのP/E比率は、多くの他の企業よりも高いため、その株価を見捨てることは株主には不可能です。資本に見込みがある会社を購入していることを示唆しています。
Sino-Ocean Service HoldingのP/E
最近の株価の弱さにもかかわらず、Sino-Ocean Service HoldingのP/Eは他の多くの企業よりも高く維持されています。一般的に、投資決定を下す際に、P/E比率にあまりにも多くの重要性を付けることは避けた方が良いですが、他の市場参加者が会社にどのように考えているかを多く示すことができます。
Sino-Ocean Service Holdingは、広い市場の予測成長率よりも高い予測成長率を維持することでP/E比率を高く維持していることがわかりました。この時点では、投資家は、収益の悪化の可能性が十分に大きくないため、低いP/E比率が正当化されないと判断しています。これらの条件が変わらない限り、それらは引き続き株価を強く支えるでしょう。
Sino-Ocean Service Holdingには、考慮すべき2つの警告サインがあることも注意に値します。
あなたはSino-Ocean Service Holdingよりも優れた投資を見つけるかもしれません。低いP/Eで取引され、収益を成長させることができる興味深い企業の無料リストをチェックしてみてください。
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。