China Hongqiao Group (SEHK:1378) Could Be 71% Undervalued After Half Year Earnings

Why China Hongqiao Group’s Latest Earnings Matter For Investors

China Hongqiao Group (SEHK:1378) recently reported its half year 2026 earnings, giving investors fresh detail on sales, profits and earnings per share that can help frame expectations for the stock.

For the six months to June 30, 2026, the company reported sales of CNY 87,505.9 million compared with CNY 81,039.09 million a year earlier. Net income for the period was CNY 17,210.31 million versus CNY 12,361.05 million in the prior year half.

Basic earnings per share from continuing operations came in at CNY 1.734 compared with CNY 1.314 a year ago. Diluted earnings per share from continuing operations were CNY 1.599 compared with CNY 1.314.

These half year figures arrive less than a week before today’s date of August 27, 2026, so they are still relatively fresh in the market. They also sit alongside previously reported full year numbers, where China Hongqiao Group recorded revenue of CNY 168,820.528 million and net income of CNY 27,485.366 million.

In addition to the half year report, the company has also disclosed quarterly figures for the period ending December 31. For that quarter, China Hongqiao Group reported revenue of HK$81.31 billion and net profit of HK$10.28 billion, giving investors another reference point for how recent performance compares within the financial year.

China Hongqiao Group’s recent earnings update has come as the share price sits at HK$23.5, after a 1 day share price return of 1.56% and a year to date share price decline of 30.92%. This contrasts with a 3 year total shareholder return of 282.90%. Over the past quarter the share price has fallen 16.13%, which suggests recent momentum has faded, even though the 5 year total shareholder return of 230.87% points to a very different experience for longer term holders.

Surf 267 high quality undervalued stocks that, like China Hongqiao Group after this earnings release, have strong financial results catching analysts' attention.

After a strong set of figures yet a share price that has fallen sharply this year, China Hongqiao Group now sets up as a debate. Does the current valuation still leave more upside than downside for new buyers?

Price-to-Earnings of 7.2x for China Hongqiao Group: Is It Justified?

China Hongqiao Group closed at HK$23.5, and on that price the stock is trading on a P/E of 7.2x. Based on current data, this level is flagged as good value compared both with peers and with the wider Hong Kong Metals and Mining industry.

The P/E ratio compares the company’s share price with its earnings per share. For a business like China Hongqiao Group that already reports profits and has an established earnings base, P/E is a straightforward way to see how much investors are paying for each unit of current earnings.

Here, the picture is clear. China Hongqiao Group is described as good value on a P/E of 7.2x versus a peer average P/E of 34.3x and an industry average P/E of 14.6x. The same ratio is also below an estimated fair P/E of 11.6x. This indicates that the market valuation is lower than that reference point based on current information.

Explore the SWS fair ratio for China Hongqiao Group

Result: Price-to-Earnings of 7.2x (UNDERVALUED)

However, there are clear risks that could challenge the current China Hongqiao Group story, including the highly concentrated revenue exposure to the PRC and volatile share price performance.

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

Another View Using The SWS DCF Model

The P/E of 7.2x points to good value for China Hongqiao Group, and the SWS DCF model suggests something even more extreme. On this view, the estimated value of HK$81.12 per share versus the current HK$23.5 price indicates the stock screens as heavily undervalued. Which lens do you trust more?

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 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 267 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

If this China Hongqiao Group update leaves you weighing both the upbeat and cautious signals, consider acting while the information is fresh and test the data yourself. To see both sides of the story presented together, review the 4 key rewards and 1 important warning sign

Looking For More Investment Ideas Beyond China Hongqiao Group?

Do not stop with China Hongqiao Group. Use the latest data while it is fresh and keep building a watchlist that fits your goals and risk comfort.

• Target potential mispricing by scanning a focused set of 267 high quality undervalued stocks that financial data suggests may be trading below what their fundamentals support.
• Strengthen your downside protection by reviewing a curated 313 resilient stocks with low risk scores where balance sheets and risk scores work together to limit unpleasant surprises.
• Spot future candidates early by checking a hand picked 616 high quality undiscovered gems before broader market attention starts to narrow the opportunity set.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com