Despite an already strong run, Shanghai Kai Kai Industry Company Limited (SHSE:600272) shares have been powering on, with a gain of 26% in the last thirty days. Unfortunately, the gains of the last month did little to right the losses of the last year with the stock still down 12% over that time.
Following the firm bounce in price, Shanghai Kai Kai Industry’s price-to-earnings (or “P/E”) ratio of 51.7x might make it look like a strong sell right now compared to the market in China, where around half of the companies have P/E ratios below 28x and even P/E’s below 17x are quite common. However, the P/E might be quite high for a reason and it requires further investigation to determine if it’s justified.
With earnings growth that’s exceedingly strong of late, Shanghai Kai Kai Industry has been doing very well. It seems that many are expecting the strong earnings performance to beat most other companies over the coming…
