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QuestionsCategory: Investor PsychologyYZJ Shipbuilding
Eugene Ming asked 4 years ago

Why is YZJ Shipbuilding’s P/E ratio so low (less than 2)? Is it possible that the numbers are being manipulated? Does it mean that the share is greatly undervalued if the financials are correct and accurate? What other considerations should there be before investing in this counter?

1 Answers
Victor Chng answered 4 years ago

Hi Eugene,
Shipping business are usually traded below PE 10x because of their unpredictable earnings unlike recurring business. For IQ members, we strongly advocate to look at recurring business. You can understand more about recurring under the module 3 section – high recurring revenue.