Valuation Check on China Resources Mixc Lifestyle Services (SEHK:1209) After Major CR Land Services Framework Renewal Approval

China Resources Mixc Lifestyle Services (SEHK:1209) just received overwhelming independent shareholder approval to renew and expand its commercial operational services framework with CR Land, effectively locking in a major stream of related party service revenue.

See our latest analysis for China Resources Mixc Lifestyle Services.

The market seems to be recognising that this renewed framework helps de risk future revenue. With the share price at HK$43.56 and a strong year to date share price return feeding into a robust one year total shareholder return and healthier three year total shareholder return, this suggests momentum is still building rather than fading.

If this kind of contracted growth story interests you, it may also be worth exploring fast growing stocks with high insider ownership as a way to uncover other potential opportunities with aligned insiders.

Yet with the stock already up strongly this year and trading only modestly below analyst estimates and intrinsic value, investors now face a tougher question: Is there still a genuine upside opportunity here, or has the market already priced in future growth?

Price-to-Earnings of 23.9x: Is it justified?

Based on a price to earnings ratio of 23.9x against the last close of HK$43.56, China Resources Mixc Lifestyle Services screens as expensive versus its peers.

The price to earnings multiple compares the current share price to the company’s earnings per share, effectively showing how much investors are paying for each unit of profit. For a services focused real estate operator with steady growth, this is a key yardstick for how the market is pricing its profit engine.

Here, the market is assigning a 23.9x multiple, which sits well above the Hong Kong real estate industry average of 13.6x and the peer average of 16x, and even exceeds the company’s estimated fair price to earnings ratio of 15.5x. That combination suggests investors are paying a clear premium for Mixc’s growth profile and high return on equity, rather than treating it as a typical sector player that might gravitate back toward the fair ratio over time.

Explore the SWS fair ratio for China Resources Mixc Lifestyle Services

Result: Price-to-Earnings of 23.9x (OVERVALUED)

However, concentration on related party contracts and any slowdown in China’s retail property market could quickly challenge the current premium valuation and growth expectations.

Find out about the key risks to this China Resources Mixc Lifestyle Services narrative.

Another View: Our DCF Suggests Mild Value

While the 23.9x price to earnings ratio makes China Resources Mixc Lifestyle Services look expensive, our DCF model paints a softer picture. With the shares around 7.1% below our fair value estimate, is the market overlooking steady cash flow strength, or rightly wary of execution risk?

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 Resources Mixc Lifestyle Services 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 912 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 Resources Mixc Lifestyle Services Narrative

If you see things differently or prefer to dive into the numbers yourself, you can quickly craft your own view in just minutes: Do it your way.

A great starting point for your China Resources Mixc Lifestyle Services research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

Ready for your next opportunity?

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• Strengthen a value-focused approach by reviewing these 912 undervalued stocks based on cash flows where market prices may not fully reflect underlying cash flow characteristics.

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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