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China Hongqiao Group (SEHK:1378) After Strong Half Year Results Still Looks Cheap

Simply Wall St · 2d ago

China Hongqiao Group (SEHK:1378) drew fresh attention after reporting half year 2026 results, with sales of CNY 87,505.9 million and net income of CNY 17,210.31 million, alongside higher earnings per share.

See our latest analysis for China Hongqiao Group.

Despite the recent half year results and the decision to redeem US$330.0m of notes, China Hongqiao Group’s 90 day share price return is down 21.74% and the year to date share price return is down 31.86%. However, the 3 year total shareholder return of 291.71% points to much stronger longer term performance and suggests that recent momentum has faded compared with earlier gains.

If China Hongqiao Group’s moves have you thinking about other materials linked ideas, it could be worth scanning the market using the 9 top copper producer stocks

China Hongqiao Group now combines stronger recent earnings with a share price that has pulled back sharply. Do the current valuation and risk profile still tilt in favour of buyers, or has the easy part of the move already passed?

Price-to-Earnings of 8.6x: Is it justified for China Hongqiao Group?

On the latest numbers, China Hongqiao Group trades on a P/E of 8.6x, which screens as good value compared with both peers and the broader Hong Kong Metals and Mining industry.

The P/E ratio compares the current share price with earnings per share. For a business like China Hongqiao Group that already reports profits and has a track record of earnings growth, it is a straightforward way to see how much investors are currently paying for each unit of profit.

In this case, the stock is described as good value against its direct peer group, with a P/E of 8.6x versus a peer average of 9.8x. It is also flagged as good value against the Hong Kong Metals and Mining industry, where the average P/E comes in at 16.1x. Relative to an estimated fair P/E of 12.5x, the current multiple implies the market is pricing China Hongqiao Group at a lower level than the regression based fair ratio that the SWS model suggests could be reasonable.

Explore the SWS fair ratio for China Hongqiao Group

Result: Price-to-Earnings of 8.6x (UNDERVALUED)

However, investors still need to weigh risks such as China Hongqiao Group’s heavy reliance on PRC revenue, as well as its exposure to global aluminum demand and pricing cycles.

Find out about the key risks to this China Hongqiao Group narrative.

Another View on China Hongqiao Group’s Valuation

The P/E of 8.6x suggests China Hongqiao Group looks cheap on earnings. The SWS DCF model points in the same direction, with an estimated future cash flow value of HK$80.45 per share versus a share price of HK$23.18. That is flagged as undervalued. How comfortable are you with the assumptions behind that gap?

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

1378 Discounted Cash Flow as at Aug 2026
1378 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 China Hongqiao Group 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 269 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

With China Hongqiao Group presenting both appealing valuation signals and some clear watchpoints, it makes sense to review the full picture for yourself and move quickly if the balance of risk and reward fits your approach. To see both sides set out in one place, start with the 4 key rewards and 1 important warning sign

Looking for more investment ideas beyond China Hongqiao Group?

Do not stop at China Hongqiao Group. The same tools that surfaced this opportunity can help you quickly spot other stocks that fit your style and risk comfort.

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.