Risks Still Elevated At These Prices As CJ Century Logistics Holdings Berhad (KLSE:CJCEN) Shares Dive 27%

Simply Wall St · 04/14 22:47

Unfortunately for some shareholders, the CJ Century Logistics Holdings Berhad (KLSE:CJCEN) share price has dived 27% in the last thirty days, prolonging recent pain. The recent drop completes a disastrous twelve months for shareholders, who are sitting on a 60% loss during that time.

Even after such a large drop in price, you could still be forgiven for feeling indifferent about CJ Century Logistics Holdings Berhad's P/S ratio of 0.1x, since the median price-to-sales (or "P/S") ratio for the Logistics industry in Malaysia is also close to 0.4x. 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.

We've discovered 2 warning signs about CJ Century Logistics Holdings Berhad. View them for free.

View our latest analysis for CJ Century Logistics Holdings Berhad

ps-multiple-vs-industry
KLSE:CJCEN Price to Sales Ratio vs Industry April 14th 2025

What Does CJ Century Logistics Holdings Berhad's Recent Performance Look Like?

For instance, CJ Century Logistics Holdings Berhad's receding revenue in recent times would have to be some food for thought. It might be that many expect the company to put the disappointing revenue performance behind them over the coming period, which has kept the P/S from falling. 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.

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 CJ Century Logistics Holdings Berhad's earnings, revenue and cash flow.

How Is CJ Century Logistics Holdings Berhad's Revenue Growth Trending?

There's an inherent assumption that a company should be matching the industry for P/S ratios like CJ Century Logistics Holdings Berhad's to be considered reasonable.

Retrospectively, the last year delivered a frustrating 6.2% decrease to the company's top line. This means it has also seen a slide in revenue over the longer-term as revenue is down 18% 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 9.5% shows it's an unpleasant look.

In light of this, it's somewhat alarming that CJ Century Logistics Holdings Berhad's P/S sits in line with the majority of other companies. It seems most investors are ignoring the recent poor growth rate and are hoping for a turnaround in the company's business prospects. Only the boldest would assume these prices are sustainable as a continuation of recent revenue trends is likely to weigh on the share price eventually.

The Bottom Line On CJ Century Logistics Holdings Berhad's P/S

Following CJ Century Logistics Holdings Berhad's share price tumble, its P/S is just clinging on to the industry median P/S. 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.

The fact that CJ Century Logistics Holdings Berhad currently trades at a P/S on par with the rest of the industry is surprising to us since its recent revenues have been in decline over the medium-term, all while the industry is set to grow. When we see revenue heading backwards in the context of growing industry forecasts, it'd make sense to expect a possible share price decline on the horizon, sending the moderate P/S lower. 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.

There are also other vital risk factors to consider and we've discovered 2 warning signs for CJ Century Logistics Holdings Berhad (1 is concerning!) that you should be aware of before investing here.

If these risks are making you reconsider your opinion on CJ Century Logistics Holdings Berhad, explore our interactive list of high quality stocks to get an idea of what else is out there.