"we have raised our 12-month price target for the Company from $17.44 per share to $20.24 per share, at which the stock is trading at 12.9 times P/E for FY2006 and 8.0 times for FY2007. "
This is the analyst's quote from another Chinese company in which I recently purchased some shares. This has been the standard p/e ratio for Chinese stocks until the recent 'bubble'. GSH is an anomaly due to the recent issuance of stock and massive purchasing by Chinese nationals. If you understand this, you can understand the recent price rise followed by a collapse. The stock price is just returning to a reasonable level, as dictated by historical p/e levels, which have been characteristically lower than comparable stocks in the U.S. market. This does not in any way reflect on the present and future potential of this great investment. IMHO
" reasons to boost earnings per share forecasts for 2007 by 16.1% from $2.18 to $2.53. As a result Ng pushed his 12-month price target for the company from $17.44 per share to $20.24 per share, at which the stock is trading at 12.9 times P/E for the full year 2006 and a conservative 8.0 times for the full year 2007"
This is a typical analyst's forecast for Chinese stocks. Guangshen's p/e is currently over 30. A part of the 'bubble' in some areas.