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Assessing Seyond Holdings (SEHK:2665) Valuation After Recent Share Price Gain And Premium P/S Multiple

Simply Wall St · 4d ago

Seyond Holdings (SEHK:2665), a Hong Kong based LiDAR producer for automotive use, has drawn investor attention after a recent daily gain of 2.8% alongside mixed short term share performance.

See our latest analysis for Seyond Holdings.

The HK$9.94 share price move today comes after a mixed few months, with a 30 day share price return of 3.64% and a year to date share price return of 3.96% decline. At the same time, the 1 year total shareholder return of 13.90% and 3 year total shareholder return of 31.73% point to momentum that has been building over a longer horizon as investors reassess growth potential and risk around its LiDAR business.

If Seyond has caught your eye, this could be a good moment to see what else is happening across auto makers and related suppliers, starting with auto manufacturers.

With Seyond still loss making on HK$159.575m of revenue and the share price up over longer horizons but softer year to date, is this a mispriced LiDAR player, or are markets already baking in future growth?

Price to Sales of 10.4x: Is it justified?

On a P/S basis, Seyond's HK$9.94 share price sits at 10.4x sales, which is far richer than both its industry and direct peers.

The P/S multiple compares the company’s market value to its revenue, a common yardstick for loss making or early stage businesses where earnings are still negative. For a LiDAR producer like Seyond that is not yet profitable, investors often lean on revenue based measures to judge how much they are paying for each dollar of current sales.

Here, the market is assigning a P/S of 10.4x to Seyond, while the Hong Kong Auto Components industry sits at 1.1x and the peer average is 2.4x. That is a very steep premium, so the current pricing suggests investors are willing to pay several times more for Seyond's revenue than for typical sector names.

Compared with the broader Auto Components industry, Seyond's 10.4x P/S is more than 9 times the sector average and over 4 times the peer group average. This gap is wide and clearly positions Seyond as an expensive name on a simple sales multiple basis.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price-to-sales of 10.4x (OVERVALUED)

However, you also need to weigh the HK$398.195m loss against HK$159.575m of revenue, as well as the risk that a high 10.4x P/S cools if sentiment turns.

Find out about the key risks to this Seyond Holdings narrative.

Build Your Own Seyond Holdings Narrative

If you read this and come to a different conclusion, or would rather analyze the numbers yourself, you can form your own view in a few minutes by starting with Do it your way.

A great starting point for your Seyond Holdings research is our analysis highlighting 1 key reward and 3 important warning signs that could impact your investment decision.

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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.