Guangzhou LBP Medicine Science & Technology Co., Ltd. (SHSE:688393) shareholders have seen a 31% rebound in share price over the last thirty days, bringing some relief to investors. However, the stock is still down 38% over the past twelve months, causing concern for some shareholders.
The company’s price-to-earnings (P/E) ratio of 39.9x may seem high compared to the market in China, where lower P/E ratios are more common. Despite the recent jump in price, the company’s financial performance has been poor, with earnings on the decline.
Analysts are uncertain about the company’s future growth prospects, as earnings have decreased by 6.5% in the last year and 60% over the last three years. In contrast, the rest of the market is expected to grow by 41% in the next year, highlighting the company’s underperformance.
Investors seem to be banking on a turnaround in the company’s business prospects, despite the recent poor growth rate. However, the high P/E ratio and declining earnings raise concerns about the sustainability of the current share price.
Overall, Guangzhou LBP Medicine Science & Technology’s high P/E ratio and shrinking earnings pose risks for investors. It is important for shareholders to consider these factors before making investment decisions.