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Melbourne Enterprises (SEHK:158) EPS Loss Deepens, Reinforcing Bearish Profitability Narrative

Simply Wall St · 2d ago

Melbourne Enterprises FY 2025 Earnings Snapshot

Melbourne Enterprises (SEHK:158) has just posted its FY 2025 first half numbers, with revenue of HK$81.9 million and EPS of -HK$5.66, setting the tone for what remains a loss-making period.

Looking back over recent halves, the company has seen revenue move from HK$79.9 million in 1H FY 2024 to HK$81.8 million in 2H FY 2024 and HK$81.9 million in 1H FY 2025. Over the same stretch, EPS has swung from HK$0.76 to -HK$7.01 and now -HK$5.66. This underscores how thin margins continue to pressure the bottom line even as the top line holds relatively steady.

See our full analysis for Melbourne Enterprises.

With the latest figures on the table, the next step is to assess how this revenue stability and persistent EPS pressure line up with the dominant narratives around Melbourne Enterprises and where those stories might be overdue for a rethink.

Curious how numbers become stories that shape markets? Explore Community Narratives

SEHK:158 Earnings & Revenue History as at Dec 2025
SEHK:158 Earnings & Revenue History as at Dec 2025

Losses Deepen To HK$640 Million Over 12 Months

  • On a trailing 12 month basis, net income excluding extra items moved from a loss of HK$156.4 million to a loss of HK$640.5 million, while total revenue rose from HK$161.7 million to HK$164.2 million over the same periods.
  • What stands out for a bearish view is that the HK$640.5 million loss over the latest 12 month period is far larger than the HK$141.5 million loss in 1H FY 2025 alone. This highlights that the recent narrowing of half year losses has not yet changed the broader loss making pattern.
    • Critics highlight that basic EPS over the last 12 months dropped from negative HK$6.25 to negative HK$25.62 even as revenue only edged up from HK$161.7 million to HK$164.2 million.
    • This gap between modest revenue growth and much larger cumulative losses heavily supports the bearish concern that current operations are not yet supporting sustainable profitability.

Price To Sales At 9.7x Despite Losses

  • The stock trades on a 9.7 times price to sales multiple versus 0.7 times for the Hong Kong real estate industry and 2.3 times for peers, even though the company is loss making over the trailing 12 months.
  • Bears argue that paying 9.7 times sales for a business with a HK$640.5 million trailing 12 month loss leaves little margin of safety if profitability does not improve.
    • They point out that this sales multiple is over four times the peer average of 2.3 times while basic EPS over the last two reported halves has been negative at HK$7.01 and HK$5.66.
    • That combination of high revenue multiples and persistent negative EPS strengthens the bearish argument that the current valuation is demanding relative to financial performance.
Skeptics watching a 9.7 times sales multiple on top of HK$640 million in trailing losses may want a deeper breakdown of how the bear case is built. 🐻 Melbourne Enterprises Bear Case

DCF Fair Value Suggests About 30% Upside

  • DCF fair value is HK$91.18 per share compared with the current share price of HK$63.85, implying the stock traded roughly 30 percent below that model based estimate over the last year.
  • Supporters of a more bullish stance focus on this gap between DCF fair value and price, but must weigh it against the reality that the company remains unprofitable on a trailing 12 month basis.
    • They note that while net losses have narrowed only modestly at around 0.2 percent per year over five years, the 5.33 percent dividend yield still offers income even though it is not covered by earnings.
    • This mix of a DCF fair value above market and a dividend funded despite losses creates a nuanced bullish case that depends on eventual improvement in cash flows rather than current profitability.
With shares around HK$63.85 and DCF fair value at HK$91.18, some investors see a potential mispricing worth unpacking in more detail. 📊 Read the full Melbourne Enterprises Consensus Narrative.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Melbourne Enterprises's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

Explore Alternatives

Melbourne Enterprises pairs steep, widening losses with a demanding valuation multiple and an uncovered dividend, leaving little room for error if its turnaround falters.

If those red flags make you uneasy, use our these 913 undervalued stocks based on cash flows to quickly redirect your research toward companies where price better reflects fundamentals and potential upside looks more balanced.

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.