Earnings Working Against Zheneng Jinjiang Environment Holding Company Limited's (SGX:BWM) Share Price Following 40% Dive
Earnings Working Against Zheneng Jinjiang Environment Holding Company Limited's (SGX:BWM) Share Price Following 40% Dive
Zheneng Jinjiang Environment Holding Company Limited (SGX:BWM) shares have had a horrible month, losing 40% after a relatively good period beforehand. Still, a bad month hasn't completely ruined the past year with the stock gaining 41%, which is great even in a bull market.
Since its price has dipped substantially, given about half the companies in Singapore have price-to-earnings ratios (or "P/E's") above 12x, you may consider Zheneng Jinjiang Environment Holding as an attractive investment with its 8x P/E ratio. However, the P/E might be low for a reason and it requires further investigation to determine if it's justified.
For instance, Zheneng Jinjiang Environment Holding's receding earnings in recent times would have to be some food for thought. It might be that many expect the disappointing earnings performance to continue or accelerate, which has repressed the P/E. However, if this doesn't eventuate then existing shareholders may be feeling optimistic about the future direction of the share price.
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 Zheneng Jinjiang Environment Holding's earnings, revenue and cash flow.What Are Growth Metrics Telling Us About The Low P/E?
In order to justify its P/E ratio, Zheneng Jinjiang Environment Holding would need to produce sluggish growth that's trailing the market.
If we review the last year of earnings, dishearteningly the company's profits fell to the tune of 13%. The last three years don't look nice either as the company has shrunk EPS by 14% in aggregate. Therefore, it's fair to say the earnings growth recently has been undesirable for the company.
In contrast to the company, the rest of the market is expected to grow by 11% over the next year, which really puts the company's recent medium-term earnings decline into perspective.
In light of this, it's understandable that Zheneng Jinjiang Environment Holding's P/E would sit below the majority of other companies. Nonetheless, there's no guarantee the P/E has reached a floor yet with earnings going in reverse. There's potential for the P/E to fall to even lower levels if the company doesn't improve its profitability.
The Bottom Line On Zheneng Jinjiang Environment Holding's P/E
Zheneng Jinjiang Environment Holding's recently weak share price has pulled its P/E below most other companies. We'd say the price-to-earnings ratio's power isn't primarily as a valuation instrument but rather to gauge current investor sentiment and future expectations.
As we suspected, our examination of Zheneng Jinjiang Environment Holding revealed its shrinking earnings over the medium-term are contributing to its low P/E, given the market is set to grow. Right now shareholders are accepting the low P/E as they concede future earnings probably won't provide any pleasant surprises. Unless the recent medium-term conditions improve, they will continue to form a barrier for the share price around these levels.
You should always think about risks. Case in point, we've spotted 4 warning signs for Zheneng Jinjiang Environment Holding you should be aware of, and 2 of them are a bit concerning.
If you're unsure about the strength of Zheneng Jinjiang Environment Holding's business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.
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.
振能錦江環境控股有限公司(新交所股票代碼:BWM)的股價經歷了一個糟糕的月份,在經歷了相對不錯的時期之後,股價下跌了40%。儘管如此,糟糕的月份並沒有完全毀掉過去的一年,該股上漲了41%,即使在牛市中也是不錯的。
由於其價格已大幅下跌,鑑於新加坡約有一半公司的市盈率(或 “市盈率”)高於12倍,您可以將振能錦江環境控股的市盈率爲8倍,將其視爲具有吸引力的投資。但是,市盈率之低可能是有原因的,需要進一步調查以確定其是否合理。
例如,振能錦江環境控股近期收益的下降值得深思。許多人可能預計,令人失望的收益表現將持續或加速,這抑制了市盈率。但是,如果最終沒有出現這種情況,那麼現有股東可能會對股價的未來走向感到樂觀。
我們沒有分析師的預測,但您可以查看我們關於振能錦江環境控股收益、收入和現金流的免費報告,了解最近的趨勢如何爲公司未來做好準備。關於低市盈率,增長指標告訴我們什麼?
爲了證明其市盈率是合理的,振能錦江環境控股需要實現落後於市場的緩慢增長。
如果我們回顧一下去年的收益,令人沮喪的是,該公司的利潤下降了13%。過去三年看起來也不太好,因爲該公司的每股收益總共縮減了14%。因此,可以公平地說,最近的收益增長對公司來說是不可取的。
與該公司形成鮮明對比的是,預計明年其他市場將增長11%,這確實使該公司近期的中期收益下降成爲可觀的預期。
有鑑於此,振能錦江環境控股的市盈率將低於其他大多數公司是可以理解的。儘管如此,還不能保證市盈率已達到最低水平,收益反轉。如果公司不提高盈利能力,市盈率有可能降至更低的水平。
振能錦江環境控股市盈率的底線
振能錦江環境控股最近股價疲軟,使其市盈率低於大多數其他公司。我們可以說,市盈率的力量主要不在於作爲估值工具,而是衡量當前投資者情緒和未來預期。
正如我們所懷疑的那樣,我們對振能錦江環境控股的審查顯示,鑑於市場即將增長,其中期收益萎縮是其市盈率低的原因。目前,股東們正在接受低市盈率,因爲他們承認未來的收益可能不會帶來任何驚喜。除非最近的中期狀況有所改善,否則它們將繼續構成股價在這些水平附近的障礙。
你應該時刻考慮風險。舉個例子,我們發現了你應該注意的振能錦江環境控股的4個警告標誌,其中兩個有點令人擔憂。
如果您不確定振能錦江環境控股的業務實力,爲什麼不瀏覽我們的互動式股票清單,其中列出了一些您可能錯過的其他公司,這些股票具有穩健的業務基本面。
對這篇文章有反饋嗎?對內容感到擔憂?直接聯繫我們。 或者,給編輯團隊 (at) simplywallst.com 發送電子郵件。
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。
譯文內容由第三人軟體翻譯。
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