The Daohe Global Group Limited (HKG:915) share price has done very well over the last month, posting an excellent gain of 26%. The bad news is that even after the stocks recovery in the last 30 days, shareholders are still underwater by about 6.2% over the last year.
In spite of the firm bounce in price, there still wouldn't be many who think Daohe Global Group's price-to-sales (or "P/S") ratio of 0.4x is worth a mention when the median P/S in Hong Kong's Retail Distributors industry is similar at about 0.6x. Although, it's not wise to simply ignore the P/S without explanation as investors may be disregarding a distinct opportunity or a costly mistake.
SEHK:915 Price to Sales Ratio vs Industry February 6th 2024
What Does Daohe Global Group's P/S Mean For Shareholders?
As an illustration, revenue has deteriorated at Daohe Global Group over the last year, which is not ideal at all. One possibility is that the P/S is moderate because investors think the company might still do enough to be in line with the broader industry in the near future. If you like the company, you'd at least be hoping this is the case so that you could potentially pick up some stock while it's not quite in favour.
Want the full picture on earnings, revenue and cash flow for the company? Then our free report on Daohe Global Group will help you shine a light on its historical performance.
Is There Some Revenue Growth Forecasted For Daohe Global Group?
In order to justify its P/S ratio, Daohe Global Group would need to produce growth that's similar to the industry.
Taking a look back first, the company's revenue growth last year wasn't something to get excited about as it posted a disappointing decline of 37%. This means it has also seen a slide in revenue over the longer-term as revenue is down 15% in total over the last three years. So unfortunately, we have to acknowledge that the company has not done a great job of growing revenue over that time.
Weighing that medium-term revenue trajectory against the broader industry's one-year forecast for expansion of 17% shows it's an unpleasant look.
With this information, we find it concerning that Daohe Global Group is trading at a fairly similar P/S compared to the industry. It seems most investors are ignoring the recent poor growth rate and are hoping for a turnaround in the company's business prospects. There's a good chance existing shareholders are setting themselves up for future disappointment if the P/S falls to levels more in line with the recent negative growth rates.
What Does Daohe Global Group's P/S Mean For Investors?
Daohe Global Group's stock has a lot of momentum behind it lately, which has brought its P/S level with the rest of the industry. We'd say the price-to-sales ratio's power isn't primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.
Our look at Daohe Global Group revealed its shrinking revenues over the medium-term haven't impacted the P/S as much as we anticipated, given the industry is set to grow. Even though it matches the industry, we're uncomfortable with the current P/S ratio, as this dismal revenue performance is unlikely to support a more positive sentiment for long. Unless the the circumstances surrounding the recent medium-term improve, it wouldn't be wrong to expect a a difficult period ahead for the company's shareholders.
We don't want to rain on the parade too much, but we did also find 4 warning signs for Daohe Global Group that you need to be mindful of.
If these risks are making you reconsider your opinion on Daohe Global Group, explore our interactive list of high quality stocks to get an idea of what else is out there.
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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.
道和環球集團有限公司（HKG: 915）的股價在上個月表現良好，漲幅爲26％。壞消息是，即使在過去30天股市回升之後，股東仍比去年下降了約6.2％。
儘管價格穩步反彈，但當香港零售分銷商行業的市盈率中位數約爲0.6倍時，仍然沒有多少人認爲道合環球集團0.4倍的市銷率（或 “市盈率”）值得一提。但是，不加解釋地忽略市銷率是不明智的，因爲投資者可能會忽視一個明顯的機會或一個代價高昂的錯誤。
SEHK: 915 與行業的股價銷售比率 2024 年 2 月 6 日
道合環球集團的市銷率對股東意味着什麼？
舉例來說，道合環球集團的收入在過去一年中有所惡化，這根本不理想。一種可能性是市銷率適中，因爲投資者認爲公司在不久的將來可能仍然做得足夠多，足以與整個行業保持一致。如果你喜歡這家公司，你至少希望情況確實如此，這樣你就有可能在它不太受青睞的情況下買入一些股票。
想全面了解公司的收益、收入和現金流嗎？那麼我們關於道和環球集團的免費報告將幫助您了解其歷史表現。
道合環球集團的收入預計會增長嗎？
爲了證明其市銷率是合理的，道合環球集團需要實現與該行業相似的增長。
首先回顧一下，該公司去年的收入增長並不令人興奮，因爲它公佈了令人失望的37％的跌幅。這意味着從長遠來看，由於總收入在過去三年中下降了15％，其收入也出現了下滑。因此，不幸的是，我們必須承認，在此期間，該公司在增加收入方面做得不好。
將中期收入軌跡與整個行業一年來對擴張17％的預測進行權衡，可以看出這是一種令人不愉快的表情。
有了這些信息，我們發現道合環球集團的交易市銷率與該行業相似。看來大多數投資者都忽視了最近的糟糕增長率，並希望公司的業務前景有所好轉。如果市銷率降至更符合近期負增長率的水平，現有股東很有可能爲未來的失望做好準備。
道合環球集團的市銷率對投資者意味着什麼？
道合環球集團的股票最近勢頭強勁，這使其市銷率與業內其他公司相比有所上升。我們可以說，市銷比率的力量主要不是作爲一種估值工具，而是用來衡量當前的投資者情緒和未來預期。
我們對道合環球集團的調查顯示，鑑於該行業即將增長，其中期收入萎縮對市銷售率的影響沒有我們預期的那麼大。儘管它與行業相匹配，但我們對當前的市銷率感到不舒服，因爲這種慘淡的收入表現不太可能長期支持更積極的情緒。除非近期中期情況有所改善，否則預計公司股東將面臨艱難時期是沒有錯的。
我們不想在遊行隊伍中下太多雨，但我們也確實發現了道合環球集團需要注意的4個警告標誌。
如果這些風險讓你重新考慮你對道合環球集團的看法，請瀏覽我們的互動式高質量股票清單，了解還有什麼。
對這篇文章有反饋嗎？對內容感到擔憂嗎？請直接聯繫我們。或者，也可以發送電子郵件至編輯團隊 (at) simplywallst.com。
Simply Wall St的這篇文章本質上是籠統的。我們僅使用公正的方法根據歷史數據和分析師的預測提供評論，我們的文章無意作爲財務建議。它不構成買入或賣出任何股票的建議，也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意，我們的分析可能不考慮最新的價格敏感型公司公告或定性材料。簡而言之，華爾街沒有持有任何上述股票的頭寸。
