Skyworth Group (SEHK:751) Valuation After Profit Warning And Expected 30% Earnings Drop

Simply Wall St.02-24

AdvertisementProfit warning centers investor attention on Skyworth Group Skyworth Group (SEHK:751) has issued new earnings guidance for 2025, flagging an expected 30% drop in annual profit versus 2024...

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This immediately puts the focus on how its different business segments are holding up.\nSee our latest analysis for Skyworth Group.\nDespite the profit warning, Skyworth Group’s share price has moved sharply higher in recent months, with an 87.76% 90 day share price return and a very large 1 year total...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"00751":"创维集团","BK1096":"消费电子产品","DCF":"Dreyfus Alcentra Global Credit Income 2024 Target Term Fund, Inc","BK1557":"家电股"},"translate_title":"创维集团（SEHK：751）盈利预警后估值及预期盈利下降30%","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"DCF":1,"00751":0.9},"content_text":"AdvertisementProfit warning centers investor attention on Skyworth Group Skyworth Group (SEHK:751) has issued new earnings guidance for 2025, flagging an expected 30% drop in annual profit versus 2024. This immediately puts the focus on how its different business segments are holding up. See our latest analysis for Skyworth Group. Despite the profit warning, Skyworth Group’s share price has moved sharply higher in recent months, with an 87.76% 90 day share price return and a very large 1 year total shareholder return that suggests earlier optimism is now being reassessed. If this guidance is prompting you to look beyond a single stock, it could be a good moment to broaden your search and check out 101 top founder-led companies as potential long term compounders. With profit expected to fall 30% in 2025 but the share price already up 87.76% over 90 days, investors may need to ask whether Skyworth Group is still undervalued or whether the market is already pricing in future growth. Preferred P/E of 39.7x: Is it justified? On our numbers, Skyworth Group looks expensive on a P/E of 39.7x, especially when you set that against yesterday’s HK$7.36 close. The P/E ratio compares the current share price with earnings per share and is a quick way to see how much investors are paying for each unit of profit. For a consumer electronics and hardware group like Skyworth, a higher P/E usually implies that the market is paying up for future earnings growth or a perceived improvement in profitability. Here, the current 39.7x multiple sits well above the Hong Kong Consumer Durables industry average of 9.7x, and also above the peer average of 27.6x. At the same time, Skyworth’s own fair P/E, based on the SWS fair ratio work, is estimated at 15.5x. This is a level the multiple could plausibly move towards if expectations cool or earnings catch up. Explore the SWS fair ratio for Skyworth Group Result: Price-to-Earnings of 39.7x (OVERVALUED) However, a 30% profit drop, together with a 39.7x P/E and a profit warning, could leave the shares exposed if sentiment towards consumer durables or new energy weakens. Find out about the key risks to this Skyworth Group narrative. Another view: DCF points in the opposite direction While the 39.7x P/E hints at an expensive share price, our DCF model points the other way, with Skyworth Group at HK$7.36 versus an estimated future cash flow value of HK$15.22. One method suggests the stock is expensive and the other suggests it is undervalued, so which interpretation do you place more weight on? Look into how the SWS DCF model arrives at its fair value. 751 Discounted Cash Flow as at Feb 2026Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Skyworth 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 235 high quality undervalued stocks. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity. Next Steps Feeling pulled in two directions by the mix of profit warning and valuation signals? It helps to move fast, review the full picture yourself, and weigh 2 key rewards and 2 important warning signs alongside your own expectations. Looking for more investment ideas? If Skyworth’s mixed signals have you rethinking your watchlist, this is a good time to widen your scope and line up some fresh ideas.  Spot potential bargains early by reviewing our list of screener containing 568 high quality undiscovered gems that screen for quality and financial strength before they attract wider attention. Strengthen your core holdings by checking out companies in the solid balance sheet and fundamentals stocks screener (366 results) that pair resilient finances with fundamentals you can scrutinize calmly. Reduce portfolio stress by scanning 322 resilient stocks with low risk scores that focus on businesses with lower risk scores so you do not overlook steadier opportunities.   This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    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\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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