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Some China Travel International Investment Hong Kong Limited (HKG:308) Shareholders Look For Exit As Shares Take 27% Pounding

Simply Wall St · 1d ago

China Travel International Investment Hong Kong Limited (HKG:308) shares have had a horrible month, losing 27% after a relatively good period beforehand. Still, a bad month hasn't completely ruined the past year with the stock gaining 29%, which is great even in a bull market.

Even after such a large drop in price, when almost half of the companies in Hong Kong's Hospitality industry have price-to-sales ratios (or "P/S") below 0.8x, you may still consider China Travel International Investment Hong Kong as a stock probably not worth researching with its 1.7x P/S ratio. Although, it's not wise to just take the P/S at face value as there may be an explanation why it's as high as it is.

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See our latest analysis for China Travel International Investment Hong Kong

ps-multiple-vs-industry
SEHK:308 Price to Sales Ratio vs Industry December 10th 2025

What Does China Travel International Investment Hong Kong's P/S Mean For Shareholders?

China Travel International Investment Hong Kong hasn't been tracking well recently as its declining revenue compares poorly to other companies, which have seen some growth in their revenues on average. It might be that many expect the dour revenue performance to recover substantially, which has kept the P/S from collapsing. However, if this isn't the case, investors might get caught out paying too much for the stock.

Want the full picture on analyst estimates for the company? Then our free report on China Travel International Investment Hong Kong will help you uncover what's on the horizon.

How Is China Travel International Investment Hong Kong's Revenue Growth Trending?

The only time you'd be truly comfortable seeing a P/S as high as China Travel International Investment Hong Kong's is when the company's growth is on track to outshine the industry.

In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 2.5%. That put a dampener on the good run it was having over the longer-term as its three-year revenue growth is still a noteworthy 27% in total. Accordingly, while they would have preferred to keep the run going, shareholders would be roughly satisfied with the medium-term rates of revenue growth.

Shifting to the future, estimates from the three analysts covering the company suggest revenue growth is heading into negative territory, declining 1.2% over the next year. That's not great when the rest of the industry is expected to grow by 13%.

With this information, we find it concerning that China Travel International Investment Hong Kong is trading at a P/S higher than the industry. It seems most investors are hoping for a turnaround in the company's business prospects, but the analyst cohort is not so confident this will happen. There's a very good chance these shareholders are setting themselves up for future disappointment if the P/S falls to levels more in line with the negative growth outlook.

What We Can Learn From China Travel International Investment Hong Kong's P/S?

China Travel International Investment Hong Kong's P/S remain high even after its stock plunged. 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.

Our examination of China Travel International Investment Hong Kong's analyst forecasts revealed that its shrinking revenue outlook isn't drawing down its high P/S anywhere near as much as we would have predicted. Right now we aren't comfortable with the high P/S as the predicted future revenue decline likely to impact the positive sentiment that's propping up the P/S. Unless these conditions improve markedly, it'll be a challenging time for shareholders.

Many other vital risk factors can be found on the company's balance sheet. Take a look at our free balance sheet analysis for China Travel International Investment Hong Kong with six simple checks on some of these key factors.

It's important to make sure you look for a great company, not just the first idea you come across. So if growing profitability aligns with your idea of a great company, take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).