Is Longfor Group Holdings (SEHK:960) Still Below Fair Value Following Weak Profit Guidance?

Guidance points to weaker profits and pressure on development margins

Longfor Group Holdings (SEHK:960) issued earnings guidance for the six months to 30 June 2026 that points to lower profit and sharply weaker core net profit compared with the same period in 2025.

The company expects profit attributable to owners to be between RMB1.80b and RMB2.00b, compared with RMB3.22b a year earlier. Core net profit is guided to RMB50m to RMB100m, versus RMB1.38b in the prior period.

See our latest analysis for Longfor Group Holdings.

At a share price of HK$6.445, Longfor Group Holdings has seen a 1-day share price return of 0.70%, while the 90-day share price return is down 21.50% and the 1-year total shareholder return has declined 38.61%. This suggests momentum has weakened as the recent guidance affects sentiment.

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Longfor Group Holdings now trades at a steep discount to both analyst targets and some intrinsic value estimates, even after the weak guidance. This raises the question of whether this level of caution simply reflects the earnings risk, or whether sentiment has swung too far.

Preferred P/E multiple of 38.5x: Is it justified for Longfor Group Holdings?

Based on current data, Longfor Group Holdings trades on a P/E of 38.5x, which sits well above both its peers and the wider Hong Kong real estate sector.

The P/E multiple compares the company’s share price to its earnings per share and helps you see how much investors are paying for each unit of current profit. For a developer with earnings under pressure and margins at 1.1%, a higher multiple suggests the market is placing weight on future profit recovery rather than recent reported results.

Compared with the Hong Kong Real Estate industry average P/E of 8.7x, Longfor Group Holdings is priced at a much richer level. It also trades above the estimated fair P/E of 21.8x, which marks a level the market could move towards if expectations cool or earnings do not track current forecasts.

Explore the SWS fair ratio for Longfor Group Holdings

Result: Price-to-Earnings of 38.5x (OVERVALUED)

However, the sharp drop in guided core profit and the 78% share price fall over five years highlight that earnings pressure and weak sentiment could continue to weigh on Longfor Group Holdings.

Find out about the key risks to this Longfor Group Holdings narrative.

Another view on Longfor Group Holdings using the SWS DCF model

The high P/E for Longfor Group Holdings paints a costly picture, yet the SWS DCF model suggests a very different story. At around HK$6.45, the stock trades about 66.7% below an estimated fair value of HK$19.34, which points to a wide gap between price and implied cash flow value.

This kind of disconnect can reflect doubts about forecasts, concerns over funding and margins, or simply very weak sentiment. The key question for you is whether the DCF assumptions look realistic enough to challenge what the current market price is signalling.

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 Longfor Group 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 270 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 clearly mixed around Longfor Group Holdings, now is a useful time to look through the numbers yourself and decide what really matters. To see both sides of the story in one place, review the 2 key rewards and 3 important warning signs

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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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