China Graphite Group Limited's (HKG:2237) Business Is Yet to Catch Up With Its Share Price

Simply Wall St.2025-10-07

When you see that almost half of the companies in the Metals and Mining industry in Hong Kong have price-to-sales ratios (or "P/S") below 1x, China Graphite Group Limited (HKG:2237) looks to be giving...

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Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly elevated P/S.    We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.  Check out our latest analysis for China Graphite Group SEHK:2237 Price to Sales Ratio vs Industry October 6th 2025Advertisement What Does China Graphite Group's Recent Performance Look Like?  As an illustration, revenue has deteriorated at China Graphite Group over the last year, which is not ideal at all.   It might be that many expect the company to still outplay most other companies over the coming period, which has kept the P/S from collapsing.  If not, then existing shareholders may be quite nervous about the viability of the share price.     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 China Graphite Group's earnings, revenue and cash flow.   Is There Enough Revenue Growth Forecasted For China Graphite Group?   There's an inherent assumption that a company should far outperform the industry for P/S ratios like China Graphite Group's to be considered reasonable.   In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 24%.   The last three years don't look nice either as the company has shrunk revenue by 30% in aggregate.  Therefore, it's fair to say the revenue growth recently has been undesirable for the company.     Weighing that medium-term revenue trajectory against the broader industry's one-year forecast for expansion of 15% shows it's an unpleasant look.  With this information, we find it concerning that China Graphite Group is trading at a P/S higher than the industry.  Apparently many investors in the company are way more bullish than recent times would indicate and aren't willing to let go of their stock at any price.  Only the boldest would assume these prices are sustainable as a continuation of recent revenue trends is likely to weigh heavily on the share price eventually.    The Final Word  Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.  Our examination of China Graphite Group revealed its shrinking revenue over the medium-term isn't resulting in a P/S as low as we expected, given the industry is set to grow.  With a revenue decline on investors' minds, the likelihood of a souring sentiment is quite high which could send the P/S back in line with what we'd expect.  Should recent medium-term revenue trends persist, it would pose a significant risk to existing shareholders' investments and prospective investors will have a hard time accepting the current value of the stock.     Plus, you should also learn about these 2 warning signs we've spotted with China Graphite Group (including 1 which is significant).   Of course, profitable companies with a history of great earnings growth are generally safer bets. 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":"-1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"},"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,"tenantId":"TBGLOBAL","deviceId":"web-server-community-laohu8-v3","version":"4.36.0","shortVersion":"4.36.0","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/2573364379","isCrawlerRequest":true}