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SJM Holdings (SEHK:880) Could Be 65% Below Fair Value On Weaker Half Year Results

Simply Wall St · 1d ago

SJM Holdings (SEHK:880) recently reported half year 2026 results that showed revenue of HK$11,589.8 million, down from HK$14,639.3 million a year earlier, with net loss widening to HK$294.7 million.

The latest earnings release on 25 August appears to have fed into existing weakness in SJM Holdings' stock, with the 1 day share price return declining 1.72% to HK$1.43 and the 90 day share price return down 20.56%. The 1 year total shareholder return has fallen 51.03% and the 5 year total shareholder return is down 78.42%. This indicates that pressure has been building over time rather than easing, despite a 7 day share price return gain of 3.62%.

Scan how other casino and leisure stocks compare on balance sheet strength and recent returns by reviewing our hand picked list of solid balance sheet and fundamentals (440 results) alongside SJM Holdings.

SJM Holdings now trades well below both analyst targets and an estimated intrinsic value, yet the business is still reporting losses and shrinking revenue. Is the discount a margin of safety or a warning sign?

Preferred Price to Sales Multiple of 0.4x: Is it justified?

SJM Holdings is currently valued at a P/S ratio of 0.4x while trading at HK$1.43, which screens as inexpensive compared to both peers and its own estimated fair level.

The P/S multiple compares the company’s market value to its revenue. For a casino and resort operator like SJM Holdings, where earnings are still in loss making territory, revenue based measures can sometimes give a clearer sense of how the market is pricing the underlying business activity.

According to recent assessments, SJM Holdings is viewed as good value on several fronts. The current 0.4x P/S ratio is described as attractive when set against the peer average of 1.2x and the Hong Kong Hospitality industry average of 0.9x. It is also below an estimated fair P/S level of 0.9x, which suggests the market could be pricing the stock well under a level that statistical models associate with its fundamentals.

This gap between the current 0.4x and the estimated fair 0.9x P/S ratio is material. It reinforces the picture already painted by other valuation work such as the SWS DCF model, which indicates SJM Holdings is trading below an estimated future cash flow value of HK$4.15 per share. Together, these checks frame SJM Holdings as a stock the market is valuing more conservatively than both its peer set and the fair ratio models.

Explore the SWS fair ratio for SJM Holdings.

Result: Price-to-sales of 0.4x (UNDERVALUED)

However, the SJM Holdings story still carries clear risks, including ongoing net losses of HK$541.5 million and full reliance on Macau for its HK$25,120.7 million revenue.

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

Another View on SJM Holdings: Discounted Cash Flow Check

The earlier P/S work presents SJM Holdings as undervalued based on sales. Viewed through a second lens, the picture is similar. Our DCF model estimates a future cash flow value of HK$4.15 per share, compared with the current HK$1.43 price. This points to a wide valuation gap. The key question is whether that gap reflects mispricing or the market’s view of risk.

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

880 Discounted Cash Flow as at Sep 2026
880 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 SJM Holdings 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 255 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 this mixed around SJM Holdings, it makes sense to move quickly and review the numbers yourself before opinions harden. To see why some investors are still optimistic, review the 3 key rewards.

Looking for more investment ideas beyond SJM Holdings?

If SJM Holdings has sharpened your focus on value and risk, this may be a good moment to widen your watchlist with a few carefully filtered 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.