In This Article:
SuperRobotics Limited (SEHK:8176), a HK$4.28B small-cap, is a consumer staples company operating in an industry which supplies necessities to consumers. This means it is less sensitive to changes in the economic cycle given that demand remains relatively stable over time. Consumer staple analysts are forecasting for the entire industry, a positive double-digit growth of 14.87% in the upcoming year , and a robust short-term growth of 24.03% over the next couple of years. However, this rate came in below the growth rate of the Hong Kong stock market as a whole. Today, I’ll take you through the sector growth expectations, as well as evaluate whether SuperRobotics is lagging or leading in the industry. Check out our latest analysis for SuperRobotics
What’s the catalyst for SuperRobotics’s sector growth?
Growth in the personal product sector has been driven by structural shifts in the way companies innovate in order to meet the needs of changing consumer tastes, and the growing engagement and interaction with customers via e-commerce channels. In the past year, the industry delivered negative growth of -33.43%, underperforming the Hong Kong market growth of 11.05%. SuperRobotics lags the pack with its sustained negative earnings over the past couple of years. The company’s outlook seems uncertain, with a lack of analyst coverage, which doesn’t boost our confidence in the stock. This lack of growth and transparency means SuperRobotics may be trading cheaper than its peers.
Is SuperRobotics and the sector relatively cheap?
The personal product sector’s PE is currently hovering around 19.33x, higher than the rest of the Hong Kong stock market PE of 14.07x. This means the industry, on average, is relatively overvalued compared to the wider market. However, the industry returned a similar 10.83% on equities compared to the market’s 9.56%. Since SuperRobotics’s earnings doesn’t seem to reflect its true value, its PE ratio isn’t very useful. A loose alternative to gauge SuperRobotics’s value is to assume the stock should be relatively in-line with its industry.
Next Steps:
SuperRobotics recently delivered an industry-beating growth rate in earnings, which is a positive for shareholders. If the stock has been on your watchlist for a while, now may be the time to buy, if you like its ability to deliver growth and are not highly concentrated in the consumer staples industry. However, before you make a decision on the stock, I suggest you look at SuperRobotics’s fundamentals in order to build a holistic investment thesis.