WEBULL

Assessing Onewo (SEHK:2602)’s Valuation After Launching a 10% H-Share Buyback Program

Simply Wall St · 2d ago

Onewo (SEHK:2602) just put a clear marker down by kicking off a buyback of up to 10% of its H shares, signaling confidence in its long term outlook and capital discipline.

See our latest analysis for Onewo.

The buyback news lands after a choppy stretch, with a 30 day share price return of minus 11.07% and a three year total shareholder return of minus 55.31%. Management is clearly trying to reset sentiment and rebuild momentum.

If this kind of opportunistic capital return has you thinking about where else insiders might be backing growth, now is a good time to explore fast growing stocks with high insider ownership.

With the stock still trading well below both its analyst target and our estimate of intrinsic value, despite solid double digit profit growth, the key question now is whether this rebound catalyst creates a genuine buying opportunity or if markets are already pricing in future growth.

Price-to-Earnings of 18x, is it justified?

Onewo trades at a price-to-earnings ratio of around 18 times based on the last close of HK$20.24, a premium to both peers and estimated fair levels.

The price-to-earnings multiple compares what investors are paying today for each unit of current earnings. It is a key lens for real estate and services businesses where profitability and growth expectations can drive sentiment more than asset values alone.

In this case, the stock screens as expensive on several fronts. Its 18 times earnings multiple is higher than the Hong Kong real estate industry average of 13.8 times, the peer group average of 14.3 times, and the estimated fair price-to-earnings ratio of 15.3 times. This suggests the market is paying up in advance for the forecast improvement in profits rather than reflecting current earnings pressure and weaker recent margins.

Set against that backdrop, the valuation gap versus both the industry and the model implied fair multiple highlights how strongly the market is pricing in Onewo's expected earnings rebound. It also leaves room for the share price to move back towards a lower, more sustainable price-to-earnings level if those optimistic growth assumptions do not fully materialise.

Explore the SWS fair ratio for Onewo

Result: Price-to-Earnings of 18x (OVERVALUED)

However, downside risks remain, including a slower than expected earnings rebound or renewed weakness in China’s property cycle, which could pressure margins and sentiment.

Find out about the key risks to this Onewo narrative.

Another View: Deep Value on Our DCF Model

While 18 times earnings looks rich, our DCF model presents a different perspective, suggesting fair value closer to HK$62.98, which is around 68% above the current HK$20.24 price. If the cash flow assumptions are accurate and the market is mispricing the stock, some investors may see this as an opportunity worth further investigation.

Look into how the SWS DCF model arrives at its fair value.

2602 Discounted Cash Flow as at Dec 2025
2602 Discounted Cash Flow as at Dec 2025

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Onewo for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 907 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Onewo Narrative

If you would rather interrogate the numbers yourself and challenge these assumptions, you can craft a personalised view of Onewo in just a few minutes: Do it your way.

A great starting point for your Onewo research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

Ready for more high conviction ideas?

Before you move on, lock in your next potential opportunity by using Simply Wall St’s targeted screeners to uncover specific themes that match your strategy.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.