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China Youran Dairy Group (SEHK:9858) Jumped, What Is Catching The Market's Attention?

Simply Wall St · 21h ago

China Youran Dairy Group (SEHK:9858) drew attention after reporting half year 2026 earnings that showed sales of CNY 10,626.7 million and a shift from a prior loss to net income of CNY 806.03 million.

The half year results on 25 August came alongside a sharp 1 day share price return of 6.78% to HK$4.33, which capped a 90 day share price return of 39.23%. Over the past three years, China Youran Dairy Group has delivered a 192.57% total shareholder return, although the year to date share price return is down 13.40%, which suggests momentum has cooled compared with the recent rebound.

Scan how China Youran Dairy Group compares with other recently active opportunities by reviewing a hand picked 261 high quality undervalued stocks.

China Youran Dairy Group has returned to profit while the share price has already moved sharply higher. Is that jump mainly about better fundamentals, or a change in sentiment that the valuation now needs to justify?

Price-to-Earnings of 23.2x: Is it justified?

China Youran Dairy Group now trades on a P/E of 23.2x, while the last close was HK$4.33. That puts the stock at a higher valuation level than many direct peers and the wider Hong Kong Food industry.

The P/E ratio compares the share price to earnings per share. This means the market is paying 23.2 times recent earnings for China Youran Dairy Group. For a company that has only recently returned to profit following a large one-off loss of CNY 3.5b in the 12 months to 30 June 2026, this suggests investors are assigning a meaningful value to the earnings recovery story.

Analyst and market data indicate that this P/E of 23.2x is expensive relative to the Hong Kong Food industry average of 12.3x and a peer average of 8.3x. However, when compared to an estimated fair P/E of 35.2x derived from the SWS fair ratio work, the current multiple sits well below the level the market could move towards if those relationships hold.

Explore the SWS fair ratio for China Youran Dairy Group.

Result: Price-to-Earnings of 23.2x (ABOUT RIGHT)

However, risks remain if China Youran Dairy Group struggles to sustain net income growth or if sentiment shifts and the current P/E premium contracts sharply.

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

Another View Using The SWS DCF Model

The first check suggested China Youran Dairy Group looks reasonably placed on a P/E of 23.2x against an estimated fair ratio of 35.2x. However, the SWS DCF model points the other way. At HK$4.33, the stock is trading above an indicated future cash flow value of HK$3.96, which frames it as overvalued on this measure. Which signal do you think deserves more weight?

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

9858 Discounted Cash Flow as at Sep 2026
9858 Discounted Cash Flow as at Sep 2026

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out China Youran Dairy 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 261 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 sentiment on China Youran Dairy Group split between improving earnings and valuation questions, it makes sense to review the numbers yourself and move quickly to form an opinion. To balance both the concerns and the potential upside in one place, take a closer look at the 2 key rewards and 2 important warning signs.

Looking for more investment ideas beyond China Youran Dairy Group?

If you want a broader watchlist alongside China Youran Dairy Group, you can use the Simply Wall Street Screener to surface focused ideas that match your style quickly.

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.