Is China Galaxy Securities (SEHK:6881) Still Cheap Following Strong Half Year 2026 Earnings?

China Galaxy Securities (SEHK:6881) has drawn fresh attention after reporting half year 2026 results, with revenue of CNY 16,850 million and net income of CNY 7,797.06 million, alongside higher earnings per share than a year earlier.

The earnings announcement appears to have attracted buyers, with China Galaxy Securities recording a 1 day share price return of 2.41% and a 7 day share price return of 5.29%, even though the year to date share price return is down 22.68%. At the latest share price of HK$8.065, that short term momentum contrasts with a 1 year total shareholder return that is down 22.32%. The 3 year and 5 year total shareholder returns of 122.13% and 134.23% respectively highlight how sentiment around the stock has shifted over different time horizons as investors absorb both the recent half year results and the August board changes.

Scan beyond China Galaxy Securities and compare its rebound with a hand picked group of 256 high quality undervalued stocks that also pair earnings strength with balance sheet quality.

China Galaxy Securities now has stronger half year numbers and a recent share price rebound, yet the stock is still down sharply over 2026. Is this a solid business that is temporarily mispriced, or a fair tag for the risks ahead?

Preferred P/E of 6x for China Galaxy Securities: Is it justified?

On the latest figures, China Galaxy Securities trades on a P/E of 6x, which points to a lower valuation compared with peers even after the recent share price rebound.

The P/E ratio compares the current share price with earnings per share. For a capital markets company like China Galaxy Securities, it gives a quick read on how much investors are paying for each unit of current earnings, and how those earnings are being valued against similar stocks in Hong Kong.

China Galaxy Securities is described as good value on this measure. Its 6x P/E is below the Hong Kong Capital Markets industry average of 8.6x and also below the peer average of 8.5x. It is also below an estimated fair P/E of 10.2x, which suggests a level the market could move toward if earnings quality and growth forecasts remain consistent with current expectations.

Explore the SWS fair ratio for China Galaxy Securities.

Result: Price-to-earnings of 6x (UNDERVALUED)

However, China Galaxy Securities still carries risk if earnings momentum slows or if regulatory changes squeeze returns across its wealth management and capital markets businesses.

Find out about the key risks to this China Galaxy Securities narrative.

Another view on China Galaxy Securities using our DCF model

The P/E of 6x presents China Galaxy Securities as relatively inexpensive compared with peers. Our DCF model points to a fair value of about HK$16.04 a share, which is roughly double the current HK$8.07 price and suggests the stock is trading at a sizable discount to that estimate. The key question is whether those future cash flow assumptions will hold up.

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

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out China Galaxy Securities 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 256 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

The mix of pressure and optimism around China Galaxy Securities makes the picture more nuanced than a simple bullish or bearish label. To get a fuller view, review both sides of the story for yourself by checking the 5 key rewards and 1 important warning sign.

Looking for more investment ideas beyond China Galaxy Securities?

If you stop with China Galaxy Securities, you might miss some setups that could be worth further research. Use this moment to review your watchlist with targeted ideas that fit your approach.

• Look for potential value opportunities by scanning a hand picked group of 256 high quality undervalued stocks that combine earnings strength with solid fundamentals.
• Consider building a steadier income stream by focusing on 418 dividend fortresses that prioritise dividend payouts alongside financial resilience.
• Emphasise resilience by concentrating on a 300 resilient stocks with low risk scores that aims to limit downside while still allowing for upside potential.

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.

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