Despite an already strong run, Shanghai Aiyingshi Co.,Ltd (SHSE:603214) shares have been powering on, with a gain of 29% in the last thirty days. The last 30 days bring the annual gain to a very sharp 27%.
Even after such a large jump in price, Shanghai AiyingshiLtd’s price-to-earnings (or “P/E”) ratio of 27.8x might still make it look like a buy right now compared to the market in China, where around half of the companies have P/E ratios above 38x and even P/E’s above 75x are quite common. However, the P/E might be low for a reason and it requires further investigation to determine if it’s justified.
Shanghai AiyingshiLtd certainly has been doing a good job lately as its earnings growth has been positive while most other companies have been seeing their earnings go backwards. It might be that many expect the strong earnings performance to degrade substantially, possibly more than the market, which has repressed the…
