WEBULL

Landrich Holding Limited's (HKG:2132) 27% Dip Still Leaving Some Shareholders Feeling Restless Over Its P/ERatio

Simply Wall St · 1d ago

Landrich Holding Limited (HKG:2132) shares have retraced a considerable 27% in the last month, reversing a fair amount of their solid recent performance. Instead of being rewarded, shareholders who have already held through the last twelve months are now sitting on a 23% share price drop.

Even after such a large drop in price, you could still be forgiven for feeling indifferent about Landrich Holding's P/E ratio of 13.9x, since the median price-to-earnings (or "P/E") ratio in Hong Kong is also close to 12x. While this might not raise any eyebrows, if the P/E ratio is not justified investors could be missing out on a potential opportunity or ignoring looming disappointment.

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The earnings growth achieved at Landrich Holding over the last year would be more than acceptable for most companies. One possibility is that the P/E is moderate because investors think this respectable earnings growth might not be enough to outperform the broader market in the near future. If that doesn't eventuate, then existing shareholders probably aren't too pessimistic about the future direction of the share price.

View our latest analysis for Landrich Holding

pe-multiple-vs-industry
SEHK:2132 Price to Earnings Ratio vs Industry December 12th 2025
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 Landrich Holding's earnings, revenue and cash flow.

What Are Growth Metrics Telling Us About The P/E?

The only time you'd be comfortable seeing a P/E like Landrich Holding's is when the company's growth is tracking the market closely.

If we review the last year of earnings growth, the company posted a terrific increase of 24%. Still, incredibly EPS has fallen 61% in total from three years ago, which is quite disappointing. Accordingly, shareholders would have felt downbeat about the medium-term rates of earnings growth.

Comparing that to the market, which is predicted to deliver 21% growth in the next 12 months, the company's downward momentum based on recent medium-term earnings results is a sobering picture.

With this information, we find it concerning that Landrich Holding is trading at a fairly similar P/E to the market. 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 earnings trends is likely to weigh on the share price eventually.

The Bottom Line On Landrich Holding's P/E

Landrich Holding's plummeting stock price has brought its P/E right back to the rest of the market. It's argued the price-to-earnings ratio is an inferior measure of value within certain industries, but it can be a powerful business sentiment indicator.

Our examination of Landrich Holding revealed its shrinking earnings over the medium-term aren't impacting its P/E as much as we would have predicted, given the market is set to grow. When we see earnings heading backwards and underperforming the market forecasts, we suspect the share price is at risk of declining, sending the moderate P/E lower. If recent medium-term earnings trends continue, it will place shareholders' investments at risk and potential investors in danger of paying an unnecessary premium.

You should always think about risks. Case in point, we've spotted 4 warning signs for Landrich Holding you should be aware of, and 2 of them are a bit unpleasant.

If you're unsure about the strength of Landrich Holding's business, why not explore our interactive list of stocks with solid business fundamentals for some other companies you may have missed.