China Resources Mixc Lifestyle Services Limited (HKG:1209) has a price-to-earnings (P/E) ratio of 17.6x, which may seem high compared to the market in Hong Kong where lower P/E ratios are more common. However, the company has been showing superior earnings growth, with a 33% increase in the last year and a 134% increase over the last three years.
Analysts are predicting a 12% annual growth in earnings for the next three years, which is similar to the market’s predicted growth rate of 13% per year. Despite this, the company’s high P/E ratio suggests that investors are more bullish on its future prospects than analysts are. This could indicate that the share price is at risk of declining in the future as earnings growth may not be able to support such a high valuation.
It is important for investors to consider the risks associated with a company’s balance sheet before making investment decisions. Simply Wall St’s free balance sheet analysis can provide insights into key factors that may impact a company’s financial health.
Overall, while the high P/E ratio may be a cause for concern for some investors, it is important to conduct further research and analysis to fully understand the reasons behind it and make informed investment decisions.
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