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    Coastal Greenland Limited (HKG:1124) Might Not Be As Mispriced As It Looks After Plunging 25%

    Simply Wall St·12/31/2025 22:11:09
    語音播報

    Coastal Greenland Limited (HKG:1124) shareholders won't be pleased to see that the share price has had a very rough month, dropping 25% and undoing the prior period's positive performance. Looking at the bigger picture, even after this poor month the stock is up 77% in the last year.

    Although its price has dipped substantially, there still wouldn't be many who think Coastal Greenland's price-to-sales (or "P/S") ratio of 0.7x is worth a mention when it essentially matches the median P/S in Hong Kong's Real Estate industry. However, investors might be overlooking a clear opportunity or potential setback if there is no rational basis for the P/S.

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    View our latest analysis for Coastal Greenland

    ps-multiple-vs-industry
    SEHK:1124 Price to Sales Ratio vs Industry December 31st 2025

    What Does Coastal Greenland's P/S Mean For Shareholders?

    With revenue growth that's exceedingly strong of late, Coastal Greenland has been doing very well. The P/S is probably moderate because investors think this strong revenue growth might not be enough to outperform the broader industry in the near future. Those who are bullish on Coastal Greenland will be hoping that this isn't the case, so that they can pick up the stock at a lower valuation.

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

    Is There Some Revenue Growth Forecasted For Coastal Greenland?

    In order to justify its P/S ratio, Coastal Greenland would need to produce growth that's similar to the industry.

    Taking a look back first, we see that the company's revenues underwent some rampant growth over the last 12 months. The latest three year period has also seen an incredible overall rise in revenue, aided by its incredible short-term performance. So we can start by confirming that the company has done a tremendous job of growing revenue over that time.

    Comparing that to the industry, which is only predicted to deliver 5.4% growth in the next 12 months, the company's momentum is stronger based on recent medium-term annualised revenue results.

    In light of this, it's curious that Coastal Greenland's P/S sits in line with the majority of other companies. Apparently some shareholders believe the recent performance is at its limits and have been accepting lower selling prices.

    What We Can Learn From Coastal Greenland's P/S?

    Following Coastal Greenland's share price tumble, its P/S is just clinging on to the industry median P/S. 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 Coastal Greenland currently trades on a lower than expected P/S since its recent three-year growth is higher than the wider industry forecast. There could be some unobserved threats to revenue preventing the P/S ratio from matching this positive performance. At least the risk of a price drop looks to be subdued if recent medium-term revenue trends continue, but investors seem to think future revenue could see some volatility.

    It is also worth noting that we have found 3 warning signs for Coastal Greenland (2 make us uncomfortable!) that you need to take into consideration.

    It's important to make sure you look for a great company, not just the first idea you come across. So if growing profitability aligns with your idea of a great company, take a peek at this free list of interesting companies with strong recent earnings growth (and a low P/E).