Investors Should Expect Kinsus Interconnect Technology Corp.’s Low P/S Ratio

TLDR:

• Kinsus Interconnect Technology Corp. has a low P/S ratio of 1.6x, which is lower than other semiconductor companies in Taiwan.
• The company has been experiencing declining revenue, leading to a suppressed P/S ratio.

Key Points:

Kinsus Interconnect Technology Corp., listed on TWSE as 3189, has a price-to-sales (P/S) ratio of 1.6x, which is significantly lower than many of its counterparts in the semiconductor industry in Taiwan. While this may seem like a bullish signal, investors should take a closer look at the reasons behind this low P/S ratio.

The company has been facing challenges with declining revenue, which has been a major contributor to its low P/S ratio. In the past year, Kinsus Interconnect Technology recorded a revenue decline of 37%, bringing its revenue growth back to where it was three years ago. Analysts predict a modest revenue growth of 14% per year over the next three years, indicating a slower growth trajectory compared to the broader industry.

The underwhelming revenue outlook has led investors to have a cautious stance on the company, resulting in a low P/S ratio. Investors are hesitant to pay a premium for a company with uncertain future revenue potential. Kinsus Interconnect Technology will need to demonstrate a significant improvement in revenue performance to justify a higher P/S ratio in the future.