SINOPEC Engineering (Group) Co., Ltd.

SHSC:2386 Stock Report

Market Cap: HK$24.5b

SINOPEC Engineering (Group) Valuation

Is 2386 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of 2386 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 2386 (HK$5.57) is trading below our estimate of fair value (HK$16.78)

Significantly Below Fair Value: 2386 is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 2386?

Key metric: As 2386 is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for 2386. This is calculated by dividing 2386's market cap by their current earnings.
What is 2386's PE Ratio?
PE Ratio9.7x
EarningsCN¥2.34b
Market CapCN¥22.78b

Price to Earnings Ratio vs Peers

How does 2386's PE Ratio compare to its peers?

The above table shows the PE ratio for 2386 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average6x
552 China Communications Services
7x6.0%HK$27.6b
586 China Conch Venture Holdings
5.9x16.4%HK$11.6b
1618 Metallurgical Corporation of China
5.5x15.5%HK$67.8b
3311 China State Construction International Holdings
5.7x12.3%HK$56.0b
2386 SINOPEC Engineering (Group)
9.7x12.2%HK$24.5b

Price-To-Earnings vs Peers: 2386 is expensive based on its Price-To-Earnings Ratio (9.7x) compared to the peer average (6x).

Price to Earnings Ratio vs Industry

How does 2386's PE Ratio compare vs other companies in the HK Construction Industry?

4 CompaniesPrice / EarningsEstimated GrowthMarket Cap
385 Chinney Alliance Group
2xn/aUS$27.14m
8188 GME Group Holdings
1.5xn/aUS$22.05m
1591 Shun Wo Group Holdings
1.8xn/aUS$9.25m
8373 Indigo Star Holdings
1.5xn/aUS$3.24m
No more companies available in this PE range
2386 9.7xIndustry Avg. 9.9xNo. of Companies14PE0816243240+
4 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: 2386 is good value based on its Price-To-Earnings Ratio (9.7x) compared to the Hong Kong Construction industry average (9.9x).

Price to Earnings Ratio vs Fair Ratio

What is 2386's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

2386 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio9.7x
Fair PE Ration/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate 2386's Price-To-Earnings Fair Ratio for valuation analysis.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

The above table shows the analyst 2386 forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentHK$5.57
HK$6.64
+19.2%
6.3%HK$7.28HK$6.12n/a7
Nov ’25HK$5.54
HK$6.62
+19.5%
6.3%HK$7.26HK$6.10n/a7
Oct ’25HK$5.38
HK$6.62
+23.0%
5.9%HK$7.14HK$6.12n/a7
Sep ’25n/a
HK$6.62
0%
5.9%HK$7.14HK$6.12n/a7
Aug ’25n/a
HK$5.94
0%
12.0%HK$7.05HK$5.11n/a7
Jul ’25n/a
HK$5.89
0%
12.1%HK$7.00HK$5.08n/a7
Jun ’25n/a
HK$5.72
0%
10.5%HK$6.79HK$5.08n/a6
May ’25n/a
HK$5.21
0%
6.2%HK$5.60HK$4.68n/a5
Apr ’25n/a
HK$5.14
0%
5.0%HK$5.50HK$4.70n/a5
Mar ’25n/a
HK$5.01
0%
6.6%HK$5.35HK$4.50n/a5
Feb ’25n/a
HK$4.77
0%
11.9%HK$5.38HK$3.80n/a5
Jan ’25n/a
HK$4.77
0%
11.9%HK$5.38HK$3.80n/a5
Dec ’24n/a
HK$4.63
0%
12.2%HK$5.38HK$3.80n/a4
Nov ’24n/a
HK$4.53
0%
11.2%HK$5.21HK$3.78HK$5.544
Oct ’24n/a
HK$4.88
0%
17.3%HK$6.30HK$3.78HK$5.385
Sep ’24n/a
HK$4.74
0%
17.9%HK$6.32HK$3.79n/a6
Aug ’24n/a
HK$4.74
0%
18.6%HK$6.39HK$3.80n/a6
Jul ’24n/a
HK$4.84
0%
20.0%HK$6.71HK$3.80n/a6
Jun ’24n/a
HK$4.84
0%
20.0%HK$6.71HK$3.80n/a6
May ’24n/a
HK$4.84
0%
20.0%HK$6.71HK$3.80n/a6
Apr ’24n/a
HK$4.84
0%
20.0%HK$6.71HK$3.80n/a6
Mar ’24n/a
HK$5.53
0%
21.9%HK$7.38HK$3.87n/a6
Feb ’24n/a
HK$5.53
0%
21.9%HK$7.38HK$3.87n/a6
Jan ’24n/a
HK$5.37
0%
22.2%HK$7.13HK$3.74n/a6
Dec ’23n/a
HK$5.24
0%
22.4%HK$7.00HK$3.67n/a6
Nov ’23n/a
HK$5.19
0%
21.5%HK$6.64HK$3.56n/a6

Analyst Forecast: Target price is less than 20% higher than the current share price.

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