Unpleasant Surprises Could Be In Store For Luye Pharma Group Ltd.'s (HKG:2186) Shares

Simply Wall St.09-25

With a price-to-earnings (or "P/E") ratio of 13.6x Luye Pharma Group Ltd. (HKG:2186) may be sending bearish signals at the moment, given that almost half of all companies in Hong Kong have P/E ratios ...

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(HKG:2186) may be sending bearish signals at the moment, given that almost half of all companies in Hong Kong have P/E ratios ...</p>\n\n<a href=\"https://simplywall.st/stocks/hk/pharmaceuticals-biotech/hkg-2186/luye-pharma-group-shares/news/unpleasant-surprises-could-be-in-store-for-luye-pharma-group\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Unpleasant Surprises Could Be In Store For Luye Pharma Group Ltd.'s (HKG:2186) Shares</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nUnpleasant Surprises Could Be In Store For Luye Pharma Group Ltd.'s (HKG:2186) Shares\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-09-25 13:08 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/hk/pharmaceuticals-biotech/hkg-2186/luye-pharma-group-shares/news/unpleasant-surprises-could-be-in-store-for-luye-pharma-group><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>With a price-to-earnings (or \"P/E\") ratio of 13.6x Luye Pharma Group Ltd. (HKG:2186) may be sending bearish signals at the moment, given that almost half of all companies in Hong Kong have P/E ratios ...</p>\n\n<a href=\"https://simplywall.st/stocks/hk/pharmaceuticals-biotech/hkg-2186/luye-pharma-group-shares/news/unpleasant-surprises-could-be-in-store-for-luye-pharma-group\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"02186","symbol_name":"绿叶制药","start_time":0,"source_url":"https://simplywall.st/stocks/hk/pharmaceuticals-biotech/hkg-2186/luye-pharma-group-shares/news/unpleasant-surprises-could-be-in-store-for-luye-pharma-group","article_id":"2470902230","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/6121000-choice2-main-header/1585186699299"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2470902230","pubTimestamp":1727240909,"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"With a price-to-earnings (or \"P/E\") ratio of 13.6x Luye Pharma Group Ltd. ( HKG:2186 ) may be sending bearish signals...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"02186":"绿叶制药","BK1583":"高瓴概念","BK1191":"制药","BK1606":"中医药概念"},"translate_title":"绿叶制药集团有限公司（HKG：2186）的股票可能会出现令人不快的意外","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"02186":1},"content_text":"With a price-to-earnings (or \"P/E\") ratio of 13.6x Luye Pharma Group Ltd. (HKG:2186) may be sending bearish signals at the moment, given that almost half of all companies in Hong Kong have P/E ratios under 9x and even P/E's lower than 5x 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 as high as it is.     Luye Pharma Group certainly has been doing a good job lately as it's been growing earnings more than most other companies.   The P/E is probably high because investors think this strong earnings performance will continue.  You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.      View our latest analysis for Luye Pharma Group SEHK:2186 Price to Earnings Ratio vs Industry September 25th 2024 Want the full picture on analyst estimates for the company? Then our free report on Luye Pharma Group will help you uncover what's on the horizon.   Does Growth Match The High P/E?   There's an inherent assumption that a company should outperform the market for P/E ratios like Luye Pharma Group's to be considered reasonable.   Taking a look back first, we see that the company grew earnings per share by an impressive 61% last year.    As a result, it also grew EPS by 22% in total over the last three years.  So we can start by confirming that the company has actually done a good job of growing earnings over that time.     Turning to the outlook, the next three years should generate growth of 14%  each year as estimated by the four analysts watching the company.  That's shaping up to be similar to the 12% per annum growth forecast for the broader market.  In light of this, it's curious that Luye Pharma Group's P/E sits above the majority of other companies.  Apparently many investors in the company are more bullish than analysts indicate and aren't willing to let go of their stock right now.  These shareholders may be setting themselves up for disappointment if the P/E falls to levels more in line with the growth outlook.    The Key Takeaway  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 Luye Pharma Group's analyst forecasts revealed that its market-matching earnings outlook isn't impacting its high P/E as much as we would have predicted.  When we see an average earnings outlook with market-like growth, we suspect the share price is at risk of declining, sending the high P/E lower.  Unless these conditions improve, it's challenging to accept these prices as being reasonable.      A lot of potential risks can sit within a company's balance sheet.  Take a look at our free balance sheet analysis for Luye Pharma Group with six simple checks on some of these key factors.   Of course, you might also be able to find a better stock than Luye Pharma Group. So you may wish to see this free collection of other companies that have reasonable P/E ratios and have grown earnings strongly. New: AI Stock Screener & AlertsOur new AI Stock Screener scans the market every day to uncover opportunities.• Dividend Powerhouses (3%+ Yield)• Undervalued Small Caps with Insider Buying• High growth Tech and AI CompaniesOr build your own from over 50 metrics.Explore Now for FreeHave 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.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.29.3","shortVersion":"4.29.3","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2470902230"}