NetDragon Websoft Holdings Valuation

Q: What is the Fair Price of 777 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

777 (HK$9.99) is trading below our estimate of [[fair value]] (HK$52.88)

Is 777 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

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 777 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 777 (HK$9.99) is trading below our estimate of fair value (HK$52.88)

Significantly Below Fair Value: 777 is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 777?

Key metric: As 777 is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for 777. This is calculated by dividing 777's market cap by their current earnings.
What is 777's PE Ratio?
PE Ratio	11x
Earnings	CN¥450.00m
Market Cap	CN¥4.94b

777 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.7x
Enterprise Value/EBITDA	4.2x
PEG Ratio	0.3x

Price to Earnings Ratio vs Peers

How does 777's PE Ratio compare to its peers?

The above table shows the PE ratio for 777 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PE	Estimated Growth	Market Cap
Peer Average	10.6x
799 IGG	5.5x	1.1%	HK$4.2b
434 Boyaa Interactive International	10.5x	n/a	HK$2.8b
2660 Zengame Technology Holding	4.3x	n/a	HK$2.9b
3798 Homeland Interactive Technology	22.1x	n/a	HK$1.7b
777 NetDragon Websoft Holdings	11x	32.1%	HK$5.3b

Price-To-Earnings vs Peers: 777 is expensive based on its Price-To-Earnings Ratio (11x) compared to the peer average (10.6x).

Price to Earnings Ratio vs Industry

How does 777's PE Ratio compare vs other companies in the HK Entertainment Industry?

0 Companies	Price / Earnings	Estimated Growth	Market Cap

No more companies available in this PE range

0 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Earnings vs Industry: 777 is good value based on its Price-To-Earnings Ratio (11x) compared to the Asian Entertainment industry average (29.1x).

Price to Earnings Ratio vs Fair Ratio

What is 777'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.

777 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	11x
Fair PE Ratio	16.2x

Price-To-Earnings vs Fair Ratio: 777 is good value based on its Price-To-Earnings Ratio (11x) compared to the estimated Fair Price-To-Earnings Ratio (16.2x).

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 777 forecast and predictions for the stock price in 12 month’s time.
Date	Share Price	Average 1Y Price Target	Dispersion	High	Low	1Y Actual price	Analysts
Current	HK$9.99	HK$16.05 +60.6%	9.4%	HK$18.18	HK$14.83	n/a	3
Nov ’25	HK$10.24	HK$16.05 +56.7%	9.4%	HK$18.18	HK$14.83	n/a	3
Oct ’25	HK$11.66	HK$15.81 +35.5%	10.0%	HK$18.02	HK$14.40	n/a	3
Sep ’25	HK$10.54	HK$16.17 +53.4%	8.1%	HK$18.00	HK$15.00	n/a	3
Aug ’25	HK$10.92	HK$16.17 +48.1%	8.1%	HK$18.00	HK$15.00	n/a	3
Jul ’25	HK$11.80	HK$16.17 +37.0%	8.1%	HK$18.00	HK$15.00	n/a	3
Jun ’25	HK$11.72	HK$16.17 +38.0%	8.1%	HK$18.00	HK$15.00	n/a	3
May ’25	HK$11.02	HK$16.17 +46.7%	8.1%	HK$18.00	HK$15.00	n/a	3
Apr ’25	HK$10.96	HK$21.77 +98.7%	3.6%	HK$22.55	HK$21.00	n/a	2
Mar ’25	HK$11.42	HK$21.77 +90.7%	3.6%	HK$22.55	HK$21.00	n/a	2
Feb ’25	HK$10.72	HK$21.77 +103.1%	3.6%	HK$22.55	HK$21.00	n/a	2
Jan ’25	HK$12.38	HK$21.77 +75.9%	3.6%	HK$22.55	HK$21.00	n/a	2
Dec ’24	HK$14.48	HK$21.62 +49.3%	2.8%	HK$22.24	HK$21.01	n/a	2
Nov ’24	HK$13.76	HK$21.62 +57.1%	2.8%	HK$22.24	HK$21.01	HK$10.24	2
Oct ’24	HK$14.48	HK$21.62 +49.3%	2.8%	HK$22.24	HK$21.01	HK$11.66	2
Sep ’24	n/a	HK$21.60 0%	3.7%	HK$22.40	HK$20.81	HK$10.54	2
Aug ’24	n/a	HK$20.82 0%	2.6%	HK$21.36	HK$20.29	HK$10.92	2
Jul ’24	n/a	HK$20.82 0%	2.6%	HK$21.36	HK$20.29	HK$11.80	2
Jun ’24	n/a	HK$20.82 0%	2.6%	HK$21.36	HK$20.29	HK$11.72	2
May ’24	n/a	HK$21.15 0%	4.0%	HK$21.99	HK$20.30	HK$11.02	2
Apr ’24	n/a	HK$21.18 0%	3.9%	HK$22.00	HK$20.36	HK$10.96	2

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

Discover undervalued companies

Maoyan Entertainment

HK$9.3b

An investment holding company, operates a platform in the entertainment industry in the People’s Republic of China.

1896

HK$8.06

-3.8%

-15.7%

NetEase

HK$439.5b

Engages in online games, music streaming, online intelligent learning services, and internet content services businesses in China and internationally.

9999

HK$136.40

1.8%

-22.1%

Tencent Holdings

HK$3.7t

An investment holding company, offers value-added services (VAS), online advertising, fintech, and business services in the People’s Republic of China and internationally.

80700

HK$373.40

0.3%

26.7%