Youzan Technology Limited’s (HKG:8083) 39% Price Boost Is Out Of Tune With Revenues
Despite an already strong run, Youzan Technology Limited (HKG:8083) shares have been powering on, with a gain of 39% in the last thirty days. Taking a wider view, although not as strong as the last month, the full year gain of 19% is also fairly reasonable.
Following the firm bounce in price, Youzan Technology’s price-to-sales (or “P/S”) ratio of 4.4x might make it look like a sell right now compared to the wider Software industry in Hong Kong, where around half of the companies have P/S ratios below 3.2x and even P/S below 1.1x are quite common. Nonetheless, we’d need to dig a little deeper to determine if there is a rational basis for the elevated P/S.
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