Natural Beauty Bio-Technology (SEHK:157) Return To Profit Challenges Longstanding Bearish Narratives

Natural Beauty Bio-Technology (SEHK:157) has posted its FY 2025 first half results with revenue of HK$264.5 million and basic EPS of HK$0.005459, setting a very different tone from the losses recorded through FY 2024. The company has seen revenue move from HK$156.7 million in 1H 2024 to HK$196.9 million in 2H 2024 and then to HK$264.5 million in 1H 2025, while EPS shifted from losses of HK$0.015211 and HK$0.036542 in the two halves of 2024 to a small profit in the latest period, supported by trailing 12 month net income of HK$10.6 million. For investors, this return to positive EPS and modest profitability points to recovering margins, but the scale of earnings leaves little room for comfort if costs start to rise again.

See our full analysis for Natural Beauty Bio-Technology.

With the latest numbers on the table, the next step is to see how this swing back to profit compares with the widely held stories about Natural Beauty Bio-Technology, and where those narratives might need to be updated.

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

Trailing Profit of HK$10.6m After Years of Weak Earnings

• On a trailing 12-month basis to 1H 2025, Natural Beauty Bio-Technology recorded net income of HK$10.6 million after reporting losses of HK$103.6 million and HK$62.2 million in the prior two trailing periods.
• Bears point to the 52.5% annual decline in earnings over the past five years, and that history sits in contrast with the recent HK$10.6 million profit, as:
  • The multi-year earnings decrease highlights that the latest profit sits on top of a long period of shrinking profitability, rather than a smooth upward path.
  • The shift from a trailing loss of HK$103.6 million to a profit of HK$10.6 million tests the bearish view by showing that the business has at least been able to report a positive bottom line again.

Revenue Steps Up From HK$156.7m To HK$264.5m Across Recent Halves

• Reported half-year revenue moved from HK$156.7 million in 1H 2024 to HK$196.9 million in 2H 2024 and then to HK$264.5 million in 1H 2025, while net income moved from losses of HK$30.5 million and HK$73.2 million in 2024 to a profit of HK$10.9 million in 1H 2025.
• What is surprising for a more cautious narrative is that a business coming off several loss-making periods is now reporting HK$264.5 million in revenue and HK$10.9 million in half-year net income, which:
  • Shows that the latest profit has support from revenue that is higher than the prior two halves, rather than coming only from a small accounting shift.
  • Sits alongside the reported five-year earnings decline, so anyone with a bearish stance still has a long history of weaker results to point to even as the most recent half-year looks healthier.

P/E Of 90.8x Versus 21.5x Industry Average

• The stock trades on a trailing P/E of 90.8x, compared with 21.5x for the Asian Personal Products industry and 11.1x for peers, while the share price is HK$0.48.
• Critics highlight that such a high P/E multiple on the back of HK$10.6 million of trailing net income and a HK$6.4 million one-off loss raises questions about how durable the recent profit is, because:
  • The one-off HK$6.4 million loss shows that reported earnings over the period were affected by items that may not reflect the core earning power of the business.
  • The combination of a 90.8x P/E and a five-year 52.5% annual decline in earnings challenges any bullish idea that the stock is being priced in line with the sector when its history of profitability is much weaker.

Want a broader view on how other investors are interpreting this mix of a fresh profit, a long earnings slide and a high P/E? Curious how numbers become stories that shape markets? Explore Community Narratives

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 Natural Beauty Bio-Technology'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.

Curious whether this mix of returning profit, past weakness and a rich P/E really stacks up for you? Act now by weighing both the concerns and the upside highlighted in 1 key reward and 2 important warning signs.

Explore Alternatives

Natural Beauty Bio-Technology is back in profit but carries a long history of shrinking earnings and a rich 90.8x P/E that leaves little margin for error.

If that mix of fragile profitability and a high earnings multiple feels uncomfortable, you might want to check out 221 high quality undervalued stocks, where the focus is on companies priced more conservatively relative to their 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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