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    TBK & Sons Holdings Limited's (HKG:1960) 26% Share Price Surge Not Quite Adding Up

    Simply Wall St·01/01/2026 22:15:15
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    TBK & Sons Holdings Limited (HKG:1960) shares have had a really impressive month, gaining 26% after a shaky period beforehand. The last month tops off a massive increase of 114% in the last year.

    After such a large jump in price, you could be forgiven for thinking TBK & Sons Holdings is a stock not worth researching with a price-to-sales ratios (or "P/S") of 1.4x, considering almost half the companies in Hong Kong's Energy Services industry have P/S ratios below 0.4x. However, the P/S might be high for a reason and it requires further investigation to determine if it's justified.

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    View our latest analysis for TBK & Sons Holdings

    ps-multiple-vs-industry
    SEHK:1960 Price to Sales Ratio vs Industry January 1st 2026

    What Does TBK & Sons Holdings' Recent Performance Look Like?

    For instance, TBK & Sons Holdings' receding revenue in recent times would have to be some food for thought. One possibility is that the P/S is high because investors think the company will still do enough to outperform the broader industry in the near future. You'd really hope so, otherwise you're paying a pretty hefty price for no particular reason.

    Although there are no analyst estimates available for TBK & Sons Holdings, take a look at this free data-rich visualisation to see how the company stacks up on earnings, revenue and cash flow.

    How Is TBK & Sons Holdings' Revenue Growth Trending?

    There's an inherent assumption that a company should outperform the industry for P/S ratios like TBK & Sons 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 66%. As a result, revenue from three years ago have also fallen 88% overall. So unfortunately, we have to acknowledge that the company has not done a great job of growing revenue over that time.

    In contrast to the company, the rest of the industry is expected to grow by 7.9% over the next year, which really puts the company's recent medium-term revenue decline into perspective.

    In light of this, it's alarming that TBK & Sons Holdings' P/S sits above the majority of other companies. It seems most investors are ignoring the recent poor growth rate and are hoping for a turnaround in the company's business prospects. Only the boldest would assume these prices are sustainable as a continuation of recent revenue trends is likely to weigh heavily on the share price eventually.

    What We Can Learn From TBK & Sons Holdings' P/S?

    The large bounce in TBK & Sons Holdings' shares has lifted the company's P/S handsomely. Generally, our preference is to limit the use of the price-to-sales ratio to establishing what the market thinks about the overall health of a company.

    We've established that TBK & Sons Holdings currently trades on a much higher than expected P/S since its recent revenues have been in decline over the medium-term. With a revenue decline on investors' minds, the likelihood of a souring sentiment is quite high which could send the P/S back in line with what we'd expect. If recent medium-term revenue trends continue, it will place shareholders' investments at significant risk and potential investors in danger of paying an excessive premium.

    Having said that, be aware TBK & Sons Holdings is showing 3 warning signs in our investment analysis, and 1 of those can't be ignored.

    If these risks are making you reconsider your opinion on TBK & Sons Holdings, explore our interactive list of high quality stocks to get an idea of what else is out there.