WEBULL

Shenzhen International Holdings Limited's (HKG:152) Shares Lagging The Market But So Is The Business

Simply Wall St · 2d ago

With a price-to-earnings (or "P/E") ratio of 7.6x Shenzhen International Holdings Limited (HKG:152) may be sending bullish signals at the moment, given that almost half of all companies in Hong Kong have P/E ratios greater than 13x and even P/E's higher than 25x are not unusual. Although, it's not wise to just take the P/E at face value as there may be an explanation why it's limited.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

With earnings growth that's superior to most other companies of late, Shenzhen International Holdings has been doing relatively well. One possibility is that the P/E is low because investors think this strong earnings performance might be less impressive moving forward. If you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's out of favour.

See our latest analysis for Shenzhen International Holdings

pe-multiple-vs-industry
SEHK:152 Price to Earnings Ratio vs Industry January 8th 2026
If you'd like to see what analysts are forecasting going forward, you should check out our free report on Shenzhen International Holdings.

Does Growth Match The Low P/E?

There's an inherent assumption that a company should underperform the market for P/E ratios like Shenzhen International Holdings' to be considered reasonable.

If we review the last year of earnings growth, the company posted a worthy increase of 9.3%. However, this wasn't enough as the latest three year period has seen an unpleasant 21% overall drop in EPS. So unfortunately, we have to acknowledge that the company has not done a great job of growing earnings over that time.

Looking ahead now, EPS is anticipated to climb by 7.9% per year during the coming three years according to the six analysts following the company. That's shaping up to be materially lower than the 14% each year growth forecast for the broader market.

In light of this, it's understandable that Shenzhen International Holdings' P/E sits below the majority of other companies. Apparently many shareholders weren't comfortable holding on while the company is potentially eyeing a less prosperous future.

The Bottom Line On Shenzhen International Holdings' P/E

While the price-to-earnings ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of earnings expectations.

As we suspected, our examination of Shenzhen International Holdings' analyst forecasts revealed that its inferior earnings outlook is contributing to its low P/E. Right now shareholders are accepting the low P/E as they concede future earnings probably won't provide any pleasant surprises. Unless these conditions improve, they will continue to form a barrier for the share price around these levels.

Don't forget that there may be other risks. For instance, we've identified 2 warning signs for Shenzhen International Holdings (1 is potentially serious) you should be aware of.

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