Lufax (NYSE:LU): Valuation Perspective Following Shareholder Approval of Ping An Consumer Finance Agreement

Lufax Holding (NYSE:LU) held an extraordinary general meeting in Shanghai, where shareholders approved the 2025 Ping An Consumer Finance Collaboration Supplemental Agreement and revised annual caps. This approval could influence the company’s strategic direction moving forward.

See our latest analysis for Lufax Holding.

Lufax Holding’s shares recently spiked as investors anticipated outcomes from its shareholder meeting, reflecting renewed optimism around its strategic partnership with Ping An. However, looking at the bigger picture, its one-year total shareholder return is essentially flat. Its three-year total return modestly outpaces recent price moves, suggesting that momentum remains muted despite the latest flurry of activity.

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With Lufax shares rallying on fresh strategic announcements, but long-term returns still lackluster, investors are left to ask whether this is a compelling entry point for value seekers or if the market has already priced in future growth.

Price-to-Sales Ratio of 0.8x: Is it justified?

Lufax Holding's shares are currently trading at a price-to-sales ratio of 0.8x, which is significantly lower than both its peers and the industry average. With a last close price of $4.00, the stock appears attractively valued by this measure.

The price-to-sales ratio compares a company’s stock price to its revenues, offering a way to gauge value when profits are inconsistent or negative. For Lufax, which is presently unprofitable, this metric provides a clearer window into how the market views its underlying business potential without the effect of net losses.

Looking at sector peers, the average price-to-sales ratio is 2.7x, while the broader US Consumer Finance industry sits at 1.6x. Additionally, Lufax trades well below its estimated fair price-to-sales ratio of 2.6x. This indicates the market might be overlooking its revenue-generating capacity. The difference suggests there could be room for appreciation if sentiment or fundamentals shift in its favor.

Explore the SWS fair ratio for Lufax Holding

Result: Price-to-Sales of 0.8x (UNDERVALUED)

However, uncertainties remain, including Lufax’s persistent net losses and the company trading below analyst price targets. These factors could dampen future investor confidence.

Find out about the key risks to this Lufax Holding narrative.

Build Your Own Lufax Holding Narrative

If you think a different picture is emerging or want to dive deeper with your own analysis, you can craft your perspective in under three minutes, and Do it your way.

A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding Lufax Holding.

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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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