Monday, December 5, 2022
    HomeLifestyleEarnings are growing at China Resources Mixc Lifestyle Services (HKG:1209) but shareholders...

    Earnings are growing at China Resources Mixc Lifestyle Services (HKG:1209) but shareholders still don’t like its prospects

    The simplest way to benefit from a rising market is to buy an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. That downside risk was realized by China Resources Mixc Lifestyle Services Limited (HKG:1209) shareholders over the last year, as the share price declined 29%. That contrasts poorly with the market decline of 23%. Because China Resources Mixc Lifestyle Services hasn’t been listed for many years, the market is still learning about how the business performs. Shareholders have had an even rougher run lately, with the share price down 21% in the last 90 days. However, one could argue that the price has been influenced by the general market, which is down 17% in the same timeframe.

    Since China Resources Mixc Lifestyle Services has shed CN¥3.1b from its value in the past 7 days, let’s see if the longer term decline has been driven by the business’ economics.

    Before we look at the performance, you might like to know that our analysis indicates that 1209 is potentially undervalued!

    While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

    Even though the China Resources Mixc Lifestyle Services share price is down over the year, its EPS actually improved. It could be that the share price was previously over-hyped.

    It’s fair to say that the share price does not seem to be reflecting the EPS growth. So it’s well worth checking out some other metrics, too.

    Given the yield is quite low, at 0.9%, we doubt the dividend can shed much light on the share price. China Resources Mixc Lifestyle Services’ revenue is actually up 32% over the last year. Since the fundamental metrics don’t readily explain the share price drop, there might be an opportunity if the market has overreacted.

    The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

    SEHK:1209 Earnings and Revenue Growth September 28th 2022

    China Resources Mixc Lifestyle Services is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. If you are thinking of buying or selling China Resources Mixc Lifestyle Services stock, you should check out this free report showing analyst consensus estimates for future profits.

    A Different Perspective

    We doubt China Resources Mixc Lifestyle Services shareholders are happy with the loss of 28% over twelve months (even including dividends). That falls short of the market, which lost 23%. There’s no doubt that’s a disappointment, but the stock may well have fared better in a stronger market. The share price decline has continued throughout the most recent three months, down 21%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we’d remain pretty wary until we see some strong business performance. Before forming an opinion on China Resources Mixc Lifestyle Services you might want to consider these 3 valuation metrics.

    We will like China Resources Mixc Lifestyle Services better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

    Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

    Valuation is complex, but we’re helping make it simple.

    Find out whether China Resources Mixc Lifestyle Services is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

    View the Free Analysis



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