Evaluating Beijing Fourth Paradigm Technology (SEHK:6682)’s Valuation After Governance and Board Reforms

Beijing Fourth Paradigm Technology (SEHK:6682) just pushed through a package of governance changes at its December meetings, revising its Articles, refreshing its English name, and adding independent director Pan Jialin to the board.

See our latest analysis for Beijing Fourth Paradigm Technology.

These governance moves come after a tough stretch, with the latest HK$42.74 quote sitting against a 90 day share price return of minus 34.45% and a 1 year total shareholder return of minus 17.49%. This suggests sentiment is still cautious but could improve if investors view the refreshed board and structure as reducing execution risk.

If these changes have you thinking about where AI demand might drive the next leg of growth, it could be worth exploring other high growth tech and AI names using high growth tech and AI stocks.

Yet with revenue still growing fast, losses narrowing, and the share price trading at a sizable discount to analyst targets, investors face a key question: Is this an overlooked AI platform on sale, or has the market already priced in the next wave of growth?

Price-to-Sales of 3.3x: Is it justified?

On a price to sales basis Beijing Fourth Paradigm Technology looks modestly valued, with its 3.3x multiple sitting below our estimated fair level but above local software peers.

The price to sales ratio compares the company’s market value to its trailing revenue, a useful lens for fast growing, currently unprofitable software and AI platforms where earnings are still negative. For a business like Fourth Paradigm, investors focus on how quickly revenue can scale and when those sales might convert into sustainable profits.

Here, the 3.3x price to sales multiple stands out as cheaper than the 5x fair price to sales level suggested by our regression based fair ratio. This implies the market may be underpricing the company’s growth runway and path to profitability. At the same time, that 3.3x is richer than the 2.1x average for the wider Hong Kong software industry. This gap underscores how investors are already assigning a premium to its AI exposure, and one that could narrow if execution stumbles or broaden if forecasts are met.

Explore the SWS fair ratio for Beijing Fourth Paradigm Technology

Result: Price-to-Sales of 3.3x (UNDERVALUED)

However, investors should still weigh regulatory uncertainty around enterprise AI adoption and the risk that revenue growth slows before margins meaningfully improve.

Find out about the key risks to this Beijing Fourth Paradigm Technology narrative.

Another View, What Does Our DCF Say?

Our DCF model points to a fair value of about HK$61.66 per share, meaning the current HK$42.74 price implies roughly a 31% discount. If both the multiple and DCF indicate undervaluation, this may reflect either genuine mispricing or compensation for execution and funding risks.

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 Beijing Fourth Paradigm Technology 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 914 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 Beijing Fourth Paradigm Technology Narrative

If you see the story differently or want to dig into the numbers yourself, you can shape a personalised view in just a few minutes: Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding Beijing Fourth Paradigm Technology.

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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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