JNBY Design (SEHK:3306): Valuation Insights Following Dividend Approval and Auditor Appointment

JNBY Design (SEHK:3306) just received shareholder approval for a final dividend of HKD 0.93 per share and announced Deloitte Touche Tohmatsu as its new auditor at the recent AGM. This has drawn fresh attention from investors.

See our latest analysis for JNBY Design.

The latest governance moves have come on the back of solid momentum in JNBY Design's share price, which has climbed over 5% year-to-date and closed at HK$18.57. Looking further out, the company’s 12-month total shareholder return stands at an impressive 45.8%, building on its multi-year run as one of the sector’s long-term outperformers. Recent capital return news and an auditor change have only added to the positive sentiment.

If you're thinking about what else could be on the rise, it is worth broadening your search and discovering fast growing stocks with high insider ownership

With shares trading below analyst targets and significant recent returns, the question for investors is whether JNBY Design is still undervalued or if the market has already priced in its future growth potential.

Price-to-Earnings of 9.7x: Is it justified?

JNBY Design is trading at a price-to-earnings (P/E) ratio of 9.7x, well below the peer average of 34.5x. This makes the shares look attractively valued compared to similar companies.

The P/E ratio measures how much investors are willing to pay for each dollar of earnings. In sectors like luxury consumer goods, a lower P/E could mean the market does not fully recognize the company's earnings power or expects growth to slow.

In this case, the market is currently pricing JNBY Design at a significant discount relative to its peers. While the industry average sits much higher, this gap could close if the company continues to deliver solid results and sentiment remains positive. However, when compared to our estimate of the fair price-to-earnings ratio (8.6x), JNBY Design appears slightly expensive and may be trading above levels supported by fundamental trends in the sector.

Explore the SWS fair ratio for JNBY Design

Result: Price-to-Earnings of 9.7x (UNDERVALUED)

However, slower revenue or earnings growth than expected could challenge JNBY Design's current valuation and reduce recent investor optimism.

Find out about the key risks to this JNBY Design narrative.

Another View: Discounted Cash Flow Perspective

To look at JNBY Design from a different angle, our DCF model suggests the company is really undervalued, with shares trading around 40% below its estimated fair value. While earnings-based metrics point to a mild premium, the DCF analysis tells a more optimistic story about the stock's potential upside. So which view should investors trust: the near-term multiples or the long-term cash flows?

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 JNBY Design 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 861 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own JNBY Design Narrative

If you'd like to see the numbers from a different angle or dig into your own analysis, it's easy to build your own view in just a few minutes. Do it your way

A great starting point for your JNBY Design research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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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