WEBULL
WebtradeDownload

Lygend Resources & Technology (SEHK:2245) Could Be 52% Undervalued On Full Nickel Capacity

Simply Wall St · 1d ago

Lygend Resources & Technology (SEHK:2245) has reported that all 12 production lines of its KPS project on Obi Island in Indonesia are now running at designed capacity, bringing total nickel capacity to 400,000 tons annually.

See our latest analysis for Lygend Resources & Technology.

The latest KPS milestone comes after a strong recent recovery in Lygend Resources & Technology’s share price, with a 27.91% 90-day share price return and 9.43% 30-day share price return. The stock’s 3-year total shareholder return stands at 70.95%, suggesting momentum has picked up again after a weaker year to date.

If this Obi Island capacity news has you thinking more broadly about nickel and battery metals, it could be a useful moment to scan other rare earth and related producers through our 28 best rare earth metal stocks

For Lygend Resources & Technology, the recent rebound appears to fall between a concrete jump in nickel capacity and a change in mood around the stock. Is the current valuation mainly reflecting new fundamentals, or a sentiment swing that could fade?

Preferred P/E of 7.1x: Is it justified for Lygend Resources & Technology?

On the latest numbers, Lygend Resources & Technology trades on a P/E of 7.1x, which sits well below both its peer group average of 50.2x and the wider Hong Kong metals and mining industry average of 15.3x. At a last close of HK$15.08, that points to a valuation that screens as cheap relative to other earnings generating stocks in the same sector.

The P/E multiple compares the current share price with earnings per share. For a company like Lygend Resources & Technology that already reports profits and a Return on Equity of 22.7%, this metric gives a quick sense of how much investors are currently paying for each unit of earnings. A lower P/E can mean the market is cautious about future profitability, or it can mean the current earnings base is not being fully recognised.

Here the contrast is clear. Lygend Resources & Technology is described as having high quality earnings, with net profit margins of 7.1% compared with 6.1% last year, earnings growth of 61.1% over the past year and 17.6% per year over five years, as well as profit growth that has outpaced the broader metals and mining industry. Yet the stock trades at a P/E that is very small compared to both the 50.2x peer average and the 15.3x sector average. This suggests the market is assigning a much lower price tag to its earnings than to those of many competitors.

Relative to the Hong Kong metals and mining industry in particular, that discount is striking. Investors are currently paying a P/E of 15.3x on average for sector earnings, while Lygend Resources & Technology changes hands at 7.1x despite faster recent earnings growth than the industry and a high Return on Equity. For anyone watching the recent rebound in the share price, this wide gap between the company specific multiple and industry norms is a key part of the valuation story.

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

Result: Price-to-Earnings of 7.1x (UNDERVALUED)

However, the recent share price rebound for Lygend Resources & Technology still sits against a weaker year-to-date return and a relatively concentrated China revenue base.

Find out about the key risks to this Lygend Resources & Technology narrative.

Another view on Lygend Resources & Technology’s value

The P/E suggests Lygend Resources & Technology looks inexpensive, and the SWS DCF model also points to HK$31.30 per share versus the current HK$15.08. That implies the stock is assessed as undervalued by both earnings and cash flow lenses. If both agree, what might the market still be worried about?

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

2245 Discounted Cash Flow as at Aug 2026
2245 Discounted Cash Flow as at Aug 2026

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Lygend Resources & Technology 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 257 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Next Steps

This mix of optimism and caution around Lygend Resources & Technology leaves plenty of room for debate, so move quickly, review the figures for yourself and weigh both sides by checking the 2 key rewards and 1 important warning sign

Looking for more investment ideas beyond Lygend Resources & Technology?

If this update on Lygend Resources & Technology has sharpened your focus, it is a smart moment to broaden your watchlist using targeted stock ideas.

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.