Hengdeli Holdings (SEHK:3389) Returns To 1H Profitability Yet Trailing Losses Challenge Bullish Narratives

Hengdeli Holdings (SEHK:3389) has kicked off FY 2025 with first half revenue of C¥314.3 million and basic EPS of C¥0.006, alongside net income excluding extra items of C¥26.3 million. The company has seen revenue move from C¥580.4 million and a small loss in EPS of C¥0.001 in 1H 2024 to C¥463.2 million with EPS of C¥0.014 loss in 2H 2024, before landing at the latest 1H 2025 levels. This gives investors a clearer view of how both top line and per share results have shifted across recent reporting periods. Overall, the release highlights a business where margins and profitability trends remain central to how the story will be interpreted.

See our full analysis for Hengdeli Holdings.

With the headline numbers on the table, the next step is to see how this earnings profile lines up with the dominant narratives around Hengdeli, and where the data starts to challenge those views.

Curious how numbers become stories that shape markets? Explore Community Narratives

TTM still loss making despite 1H profit

• Across the trailing twelve months to 1H 2025, Hengdeli recorded C¥648.9 million in revenue and a net income (excluding extra items) loss of C¥26.9 million, compared with a 1H 2025 profit of C¥26.3 million on revenue of C¥314.3 million.
• What stands out against the generally more optimistic view is that, even with losses shrinking at about 45.7% per year over five years, the latest twelve month figures still show C¥26.9 million of losses. This suggests the historical improvement trend and the recent positive half year result are not yet fully reflected in the trailing period as a whole.
  • Supporters who highlight the 45.7% annual improvement in profitability over five years can point to the swing from a C¥62.7 million loss in 2H 2024 to a C¥26.3 million profit in 1H 2025 as evidence that the turnaround is visible in individual periods.
  • At the same time, the TTM loss of C¥26.9 million and earlier half year losses of C¥2.5 million in 1H 2024 and C¥62.7 million in 2H 2024 show that the path has been uneven, which is important context for anyone leaning on the historical improvement rate alone.

Retail holders often focus on headline profitability swings without checking the trailing picture, and here that trailing loss keeps the story more balanced than a single strong half might suggest.

📊 Read the what the Community is saying about Hengdeli Holdings.

Premium P/S against luxury peers

• The stock trades on a P/S multiple of 1.1x, compared with 0.7x for the Hong Kong luxury industry and 0.6x for peers, while the last twelve months remain loss making with C¥26.9 million of net income (excluding extra items) loss on C¥648.9 million of revenue.
• Critics highlight that paying a higher P/S multiple for a company that is still unprofitable on a trailing basis is hard to justify using recent numbers alone, and the current figures offer some support for that cautious stance.
  • The higher 1.1x P/S multiple comes alongside negative trailing EPS of C¥0.006 and a TTM loss of C¥26.9 million, whereas 1H 2025 shows only a single period profit of C¥26.3 million and EPS of C¥0.006.
  • The fact that the industry and peer averages sit at 0.7x and 0.6x respectively means investors are effectively paying a premium sales multiple even though the trailing period does not yet show consistent profitability, which aligns with the bearish focus on valuation risk.

DCF fair value far below market price

• The provided DCF fair value of HK$0.04 per share sits well below the current share price of HK$0.18, while the business remains loss making on a trailing basis with C¥26.9 million of net income (excluding extra items) loss over the last twelve months.
• Bears argue that a share price more than 4x the DCF fair value, paired with a P/S of 1.1x against industry and peer averages of 0.7x and 0.6x, points to meaningful valuation risk that the latest half year profit alone does not offset.
  • The DCF gap between HK$0.18 and HK$0.04, together with ongoing TTM losses and negative trailing EPS of C¥0.006, lines up with the view that the market is asking investors to pay up ahead of clearer evidence of sustained profitability.
  • Even with the multi year improvement rate of about 45.7% in profitability, the combination of a premium sales multiple and a DCF fair value below market keeps the valuation side of the cautious narrative grounded firmly in the numbers provided.

Next Steps

Don't just look at this quarter; the real story is in the long-term trend. We've done an in-depth analysis on Hengdeli Holdings's growth and its valuation to see if today's price is a bargain. Add the company to your watchlist or portfolio now so you don't miss the next big move.

The article has highlighted both cautious points and areas of optimism, so now is the time to review the figures yourself and decide what matters most to you. To see what the current optimism is based on, take a closer look at the 1 key reward.

See What Else Is Out There

Hengdeli is still loss making on a trailing basis while trading on a premium P/S multiple and a market price well above the indicated DCF fair value.

If paying up for a stock with ongoing losses and valuation questions feels uncomfortable, use the 251 high quality undervalued stocks to quickly spot companies where the price looks more grounded in current fundamentals.

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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