Hangzhou Huaxing Chuangye Communication Technology Co., Ltd. (SZSE:300025) has seen a significant increase in its share price over the last month, with a gain of 40%, and a full year gain of 23%. However, the company’s price-to-sales ratio of 9.5x is quite high compared to other companies in the Telecom industry in China. The company’s revenue has been in decline, raising concerns about the sustainability of the share price.
Analysts have not provided estimates for Hangzhou Huaxing Chuangye Communication Technology, but the company’s recent revenue growth has been disappointing. The company’s revenue declined by 4.2% last year and by 8.0% over the last three years. In contrast, the industry is predicted to deliver 5.0% growth in the next 12 months. This raises concerns about the company’s ability to outperform its peers in the industry.
Investors should be cautious about Hangzhou Huaxing Chuangye Communication Technology’s high price-to-sales ratio, as the company’s recent revenue trends are likely to weigh heavily on the share price in the future. The company is showing warning signs in terms of profitability and it is essential for investors to conduct thorough research before making any investment decision. While the company has seen a boost in its share price in the short term, the long-term sustainability of this growth remains uncertain.
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