China Suntien Green Energy (SEHK:956): Assessing Valuation After Earnings Show Profit Growth Despite Lower Revenue

China Suntien Green Energy (SEHK:956) reported earnings for the nine months ending September 30, 2025, showing a rise in net income and improved earnings per share, even as total revenue declined year over year.

See our latest analysis for China Suntien Green Energy.

China Suntien Green Energy’s latest results appear to have energized investor sentiment, with the share price rising 12.6% over the last month and up a striking 30.2% year-to-date. Even more impressive, the past year’s total shareholder return reached 43.3%, highlighting sustained performance momentum amid shifting market dynamics and recent earnings news.

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But after such robust gains, investors may be wondering if China Suntien Green Energy is undervalued given its improving profits, or if the market has already factored in all future growth and optimism.

Price-to-Earnings of 10.6x: Is it justified?

China Suntien Green Energy is trading at a price-to-earnings (P/E) ratio of 10.6x, which suggests a discount compared to many industry peers and the broader market. The latest close was HK$4.74, with earnings outpacing the Hong Kong market’s growth.

The P/E ratio measures how much investors are willing to pay per dollar of company earnings. It is a key indicator for companies like China Suntien Green Energy, as it offers insight into how the market views its profitability and future prospects relative to competitors.

This valuation hints that the market might be underestimating China Suntien Green Energy’s ongoing earnings recovery and growth trajectory. Notably, the company’s P/E is below the peer average of 28.1x and the Hong Kong market average of 12.5x. In addition, it sits under the estimated fair P/E ratio of 12.1x. This level provides room for upside if earnings continue to climb, especially as performance remains robust.

Explore the SWS fair ratio for China Suntien Green Energy

Result: Price-to-Earnings of 10.6x (UNDERVALUED)

However, obstacles remain, such as volatile energy demand and policy shifts. These factors may challenge sustained profit growth in upcoming quarters.

Find out about the key risks to this China Suntien Green Energy narrative.

Another View: Discounted Cash Flow Paints a Cautious Picture

While the P/E ratio suggests China Suntien Green Energy may be undervalued, the SWS DCF model comes to a different conclusion. According to this approach, the current share price of HK$4.74 is above our fair value estimate of HK$4.07, indicating the stock is overvalued by this method.

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 China Suntien Green Energy 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 848 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 China Suntien Green Energy Narrative

If you would like to dig deeper into the details or weigh up your own conclusions, you can craft your own perspective in just a few minutes. Do it your way

A great starting point for your China Suntien Green Energy research is our analysis highlighting 2 key rewards and 2 important warning signs 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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