Logan Group (SEHK:3380): Valuation Check as Onshore Debt Restructuring Clears 62% Milestone

Logan Group (SEHK:3380) is back in the spotlight after moving past the halfway mark on its RMB13.66 billion onshore debt restructuring. More than 62% of public bond principal is now covered by new arrangements.

See our latest analysis for Logan Group.

The restructuring progress seems to be changing how investors price in Logan Group’s risk, with a strong 90 day share price return of 71.74% and a 1 year total shareholder return of 41.07% hinting that momentum is rebuilding after years of heavy losses.

If Logan’s turnaround story has caught your eye, it could be a good moment to see what else is moving and explore fast growing stocks with high insider ownership.

Yet despite ongoing losses and a weak long term track record, the share price has surged as restructuring advances. This raises a key question: is Logan Group still trading at distressed levels, or is future recovery already fully priced in?

Price to Sales of 0.6x: Is it justified?

On a price to sales basis Logan Group looks slightly inexpensive versus the wider Hong Kong real estate sector, even after the recent share price rally.

The price to sales ratio compares the company’s market value to its annual revenue, a useful yardstick for loss making property developers where earnings are currently negative.

Logan trades at 0.6 times sales while the broader Hong Kong real estate industry averages around 0.7 times, implying the market is not fully discounting the company’s challenged profitability and balance sheet pressures relative to peers. However, when compared to a closer peer set also on 0.6 times sales, the stock no longer screens cheap, suggesting recent optimism may already be embedded in the peer comparison.

See what the numbers say about this price — find out in our valuation breakdown.

Result: Price to Sales of 0.6x (ABOUT RIGHT)

However, significant ongoing losses and an uncertain onshore restructuring outcome could still derail sentiment and limit how far this recovery story can run.

Find out about the key risks to this Logan Group narrative.

Another View: DCF Points to Overvaluation

While the price to sales ratio suggests Logan Group is roughly in line with peers, our DCF model paints a tougher picture. With the shares around HK$1.58 versus an estimated fair value of HK$0.61, the stock looks meaningfully overvalued based on these cash flow assumptions. Could current optimism be running ahead of fundamentals?

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 Logan Group 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 913 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 Logan Group Narrative

If you see the story differently or simply want to dig into the numbers yourself, you can build a full view in minutes, Do it your way.

A great starting point for your Logan Group research is our analysis highlighting 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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