Dongjiang Environmental Company Limited’s (HKG:895) 29% Share Price Surge Not Quite Adding Up
The Dongjiang Environmental Company Limited (HKG:895) share price has done very well over the last month, posting an excellent gain of 29%. Looking further back, the 19% rise over the last twelve months isn’t too bad notwithstanding the strength over the last 30 days.
Although its price has surged higher, it’s still not a stretch to say that Dongjiang Environmental’s price-to-sales (or “P/S”) ratio of 0.6x right now seems quite “middle-of-the-road” compared to the Commercial Services industry in Hong Kong, where the median P/S ratio is around 0.5x. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/S.
We’ve discovered 2 warning signs about Dongjiang…
