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    Some Confidence Is Lacking In Hopson Development Holdings Limited's (HKG:754) P/S

    Simply Wall St·01/02/2026 22:08:18
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    With a median price-to-sales (or "P/S") ratio of close to 0.7x in the Real Estate industry in Hong Kong, you could be forgiven for feeling indifferent about Hopson Development Holdings Limited's (HKG:754) P/S ratio of 0.4x. While this might not raise any eyebrows, if the P/S ratio is not justified investors could be missing out on a potential opportunity or ignoring looming disappointment.

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    Check out our latest analysis for Hopson Development Holdings

    ps-multiple-vs-industry
    SEHK:754 Price to Sales Ratio vs Industry January 2nd 2026

    How Hopson Development Holdings Has Been Performing

    As an illustration, revenue has deteriorated at Hopson Development Holdings over the last year, which is not ideal at all. One possibility is that the P/S is moderate because investors think the company might still do enough to be in line with the broader industry in the near future. If not, then existing shareholders may be a little nervous about the viability of the share price.

    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 Hopson Development Holdings' earnings, revenue and cash flow.

    Do Revenue Forecasts Match The P/S Ratio?

    There's an inherent assumption that a company should be matching the industry for P/S ratios like Hopson Development 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 7.6%. That put a dampener on the good run it was having over the longer-term as its three-year revenue growth is still a noteworthy 9.6% in total. Accordingly, while they would have preferred to keep the run going, shareholders would be roughly satisfied with the medium-term rates of revenue growth.

    This is in contrast to the rest of the industry, which is expected to grow by 5.3% over the next year, materially higher than the company's recent medium-term annualised growth rates.

    With this in mind, we find it intriguing that Hopson Development Holdings' P/S is comparable to that of its industry peers. Apparently many investors in the company are less bearish than recent times would indicate and aren't willing to let go of their stock right now. They may be setting themselves up for future disappointment if the P/S falls to levels more in line with recent growth rates.

    The Key Takeaway

    Using the price-to-sales ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects.

    We've established that Hopson Development Holdings' average P/S is a bit surprising since its recent three-year growth is lower than the wider industry forecast. Right now we are uncomfortable with the P/S as this revenue performance isn't likely to support a more positive sentiment for long. If recent medium-term revenue trends continue, the probability of a share price decline will become quite substantial, placing shareholders at risk.

    You always need to take note of risks, for example - Hopson Development Holdings has 2 warning signs we think you should be aware of.

    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.