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    Benign Growth For Zero2IPO Holdings Inc. (HKG:1945) Underpins Its Share Price

    Simply Wall St·12/17/2025 22:02:41
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    Zero2IPO Holdings Inc.'s (HKG:1945) price-to-sales (or "P/S") ratio of 2.2x might make it look like a buy right now compared to the Capital Markets industry in Hong Kong, where around half of the companies have P/S ratios above 4.2x and even P/S above 9x are quite common. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the reduced P/S.

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    Check out our latest analysis for Zero2IPO Holdings

    ps-multiple-vs-industry
    SEHK:1945 Price to Sales Ratio vs Industry December 17th 2025

    What Does Zero2IPO Holdings' Recent Performance Look Like?

    For instance, Zero2IPO Holdings' receding revenue in recent times would have to be some food for thought. It might be that many expect the disappointing revenue performance to continue or accelerate, which has repressed the P/S. If you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's out of favour.

    We don't have analyst forecasts, but you can see how recent trends are setting up the company for the future by checking out our free report on Zero2IPO Holdings' earnings, revenue and cash flow.

    What Are Revenue Growth Metrics Telling Us About The Low P/S?

    There's an inherent assumption that a company should underperform the industry for P/S ratios like Zero2IPO Holdings' to be considered reasonable.

    In reviewing the last year of financials, we were disheartened to see the company's revenues fell to the tune of 22%. This means it has also seen a slide in revenue over the longer-term as revenue is down 2.1% in total over the last three years. Accordingly, shareholders would have felt downbeat about the medium-term rates of revenue growth.

    In contrast to the company, the rest of the industry is expected to grow by 16% over the next year, which really puts the company's recent medium-term revenue decline into perspective.

    With this in mind, we understand why Zero2IPO Holdings' P/S is lower than most of its industry peers. However, we think shrinking revenues are unlikely to lead to a stable P/S over the longer term, which could set up shareholders for future disappointment. There's potential for the P/S to fall to even lower levels if the company doesn't improve its top-line growth.

    The Final Word

    Typically, we'd caution against reading too much into price-to-sales ratios when settling on investment decisions, though it can reveal plenty about what other market participants think about the company.

    As we suspected, our examination of Zero2IPO Holdings revealed its shrinking revenue over the medium-term is contributing to its low P/S, given the industry is set to grow. At this stage investors feel the potential for an improvement in revenue isn't great enough to justify a higher P/S ratio. Given the current circumstances, it seems unlikely that the share price will experience any significant movement in either direction in the near future if recent medium-term revenue trends persist.

    Plus, you should also learn about these 4 warning signs we've spotted with Zero2IPO Holdings (including 1 which is concerning).

    Of course, profitable companies with a history of great earnings growth are generally safer bets. So you may wish to see this free collection of other companies that have reasonable P/E ratios and have grown earnings strongly.