Why We're Not Concerned About Meitu, Inc.'s (HKG:1357) Share Price

When close to half the companies in Hong Kong have price-to-earnings ratios (or "P/E's") below 12x, you may consider Meitu, Inc. (HKG:1357) as a stock to avoid entirely with its 32x P/E ratio. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly elevated P/E. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. With earnings growth that's superior to most other companies of late, Meitu has been doing relatively well. It seems that many are expecting the strong earnings performance to persist, which has raised the P/E. If not, then existing shareholders might be a little nervous about the viability of the share price. See our latest analysis for Meitu SEHK:1357 Price to Earnings Ratio vs Industry January 2nd 2026 Want the full picture on analyst estimates for the company? Then our free report on Meitu will help you uncover what's on the horizon. What Are Growth Metrics Telling Us About The High P/E? Meitu's P/E ratio would be typical for a company that's expected to deliver very strong growth, and importantly, perform much better than the market. Retrospectively, the last year delivered an exceptional 94% gain to the company's bottom line. Although, its longer-term performance hasn't been as strong with three-year EPS growth being relatively non-existent overall. So it appears to us that the company has had a mixed result in terms of growing earnings over that time. Shifting to the future, estimates from the analysts covering the company suggest earnings should grow by 20% per annum over the next three years. With the market only predicted to deliver 14% each year, the company is positioned for a stronger earnings result. With this information, we can see why Meitu is trading at such a high P/E compared to the market. It seems most investors are expecting this strong future growth and are willing to pay more for the stock. The Final Word Using the price-to-earnings ratio alone to determine if you should sell your stock isn't sensible, however it can be a practical guide to the company's future prospects. As we suspected, our examination of Meitu's analyst forecasts revealed that its superior earnings outlook is contributing to its high P/E. Right now shareholders are comfortable with the P/E as they are quite confident future earnings aren't under threat. It's hard to see the share price falling strongly in the near future under these circumstances. Plus, you should also learn about this 1 warning sign we've spotted with Meitu. Of course, you might also be able to find a better stock than Meitu. So you may wish to see this free collection of other companies that have reasonable P/E ratios and have grown earnings strongly. Mobile Infrastructure for Defense and DisasterThe next wave in robotics isn't humanoid. Its fully autonomous towers delivering 5G, ISR, and radar in under 30 minutes, anywhere.Get the investor briefing before the next round of contractsSponsored On Behalf of CiTech