Tat Hong (SEHK:2153) Losses Deepen—Net Loss Growth Challenges Bullish Narratives

Tat Hong Equipment Service (SEHK:2153) has just posted its financial results for H1 2026, reporting revenue of 293.7 million CNY and a basic EPS of -0.072 CNY. Net income excluding extra items was -84.4 million CNY. The company’s revenue compared to previous periods was 340.9 million CNY in H1 2025 and 323.7 million CNY in H2 2024, while basic EPS moved from -0.031 CNY and -0.064 CNY in those prior half-periods, respectively. Persistent losses and compressed margins continue to be key themes in the company's latest earnings season.

See our full analysis for Tat Hong Equipment Service.

Next, we are putting these numbers up against the prevailing narratives from the Simply Wall St community to see which stories stand up to scrutiny and where outlooks diverge.

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Losses Accelerate: Net Income Drops 74.7% Per Year

• Over the past five years, annual net losses increased at a rate of 74.7%, with the trailing twelve months showing a net loss (excluding extra items) of 139.98 million CNY.
• The most notable headwind for the company is its lack of profitability. Despite persistent revenue, the absence of any margin improvement, combined with a growing loss profile, makes any bullish argument about stable business fundamentals heavily challenged by actual earnings delivery.
  • Trailing twelve month basic EPS is -0.125 per share, a deeper loss than previous periods.
  • There is no turnaround in sight, as each half-year since 2024 has ended in red ink, casting real doubt on claims of underlying stability.

Premium Valuation Despite Profit Headwinds

• Tat Hong’s price-to-sales ratio stands at 1.8x, markedly higher than the peer average of 1.2x and the broader Hong Kong Construction industry’s 0.4x. Net losses continue to deepen and the share price (0.99 HKD) remains far above the DCF fair value estimate of 0.04 HKD.
• The argument that the company deserves a premium because of service reliability or sector focus does not align with the numbers. Mounting losses and a lack of meaningful rewards directly undermine the case for a valuation premium.
  • DCF-based fair value (0.04 HKD) signals a significant disconnect between market optimism and the company’s fundamentals.
  • Bears highlight that expensive multiples without profit delivery make the stock especially vulnerable if broader industry sentiment cools.

No Signs of Earnings Growth Turnaround

• For the trailing twelve months, there has been zero improvement in net profit margin or earnings growth, with negative earnings persisting across all reported periods since H2 2024.
• The data shows a total lack of positive inflection. Each reporting window displays new or larger losses, making expectations of a near-term turnaround increasingly difficult to support.
  • Trailing revenue fell from 664.57 million CNY to 594.80 million CNY, while losses accelerated at each new half-year mark.
  • This ongoing trend creates challenges for both optimistic and balanced narratives hoping for a recovery within the sector.

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 Tat Hong Equipment Service'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.

See What Else Is Out There

Tat Hong Equipment Service continues to report widening losses and trades at a premium valuation. There are no signs of earnings improvement or profitability on the horizon.

If current valuation disconnects give you pause, use these 927 undervalued stocks based on cash flows to find opportunities where strong fundamentals and attractive pricing align right now.

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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