China Risun Group (SEHK:1907) drew fresh attention after reporting interim earnings for the half year to June 30, 2026, with sales of CNY 21,855.86 million and net income of CNY 203.97 million.
The interim results appear to have coincided with improving short term momentum in China Risun Group, with a 1 month share price return of 9.95% and a 7 day share price return of 3.02%, even though the 1 year total shareholder return is still down 16.05% and the 5 year total shareholder return is down 58.63%.
Scan how other materials stocks with recent earnings momentum are shaping up by checking the hand picked 262 high quality undervalued stocks alongside China Risun Group.
China Risun Group just posted a sharp rebound in earnings and the share price has started to respond, yet longer term returns are still weak. Do the current numbers and recent move leave the stock looking cheap, or already fair?
Price-to-Earnings of 129.2x: Is it justified?
On traditional valuation metrics, China Risun Group looks expensive. The stock last closed at HK$2.05 and is trading on a P/E of 129.2x, which is far above both its peers and an estimated fair P/E level.
The P/E ratio compares the current share price to earnings per share. For a cyclical materials business like China Risun Group, it often reflects how much investors are willing to pay today for current and expected profits. A very high P/E can signal confidence in future earnings growth, or it can mean profits are currently thin and any price looks high against a low earnings base.
In this case, the company is assessed as expensive relative to several benchmarks. Its 129.2x P/E is much higher than the estimated fair P/E of 18.7x. This is a level the market could potentially move towards if expectations reset. It is also far above the Hong Kong Chemicals industry average of 9.9x and a peer average of 6.5x, which suggests the market is pricing China Risun Group very differently to comparable stocks.
Explore the SWS fair ratio for China Risun Group.
Result: Price-to-Earnings of 129.2x (OVERVALUED)
However, investors still face risks if earnings momentum fades or if China Risun Group’s high P/E contracts toward industry levels as sentiment cools.
Find out about the key risks to this China Risun Group narrative.
Another view on China Risun Group’s valuation
There is a very different message coming from our DCF model. On this view, China Risun Group at HK$2.05 is trading about 85% below an estimated future cash flow value of HK$13.61. That points to a large gap between earnings based valuation and cash flow based valuation. Which lens do you trust more?
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 Risun 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 262 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
With mixed signals around valuation and sentiment on China Risun Group, it makes sense to look closely at both the upside and the downside. To act quickly and shape your own view, start by reviewing the 3 key rewards and 2 important warning signs.
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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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