XD stock reacts to mixed half year 2026 earnings
XD (SEHK:2400) stock is trading against the backdrop of half year 2026 results that showed sales of CNY 3,312.24 million, higher than a year ago, alongside lower net income of CNY 714.3 million.
At a share price of HK$42.86, XD has seen a 1-day share price return of 1.52%. The 30-day and year to date share price returns are down 9.84% and 34.46% respectively, and the 1-year total shareholder return has fallen 46.96%. However, the 3-year total shareholder return remains very large, suggesting recent momentum has faded as investors digest the mixed earnings update and reassess the balance between growth potential and risk.
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The latest move in XD shares has opened up a wide gap between the current HK$42.86 price and various fair value estimates. How does that spread frame the stock’s valuation from here?
Preferred P/E multiple for XD: Is it justified?
At HK$42.86, XD is trading on a P/E of 11.6x, which screens as slightly expensive compared with its peer group on this metric, even after the recent share price pullback.
The P/E multiple reflects how much investors are paying today for each unit of XD's earnings. For a games and platform business that is already profitable, this is a commonly watched yardstick because it links directly to current profit rather than just revenue or assets.
Analyst data indicates XD is priced above both the peer average P/E of 10.9x and the wider Hong Kong Entertainment industry average of 10.9x. That suggests the market is attaching a premium to its earnings. However, the estimated fair P/E from the SWS model is 12.6x, which is higher than the current 11.6x. If sentiment shifted closer to that fair ratio, the multiple could move higher from here to close the gap.
To understand how this fair ratio is derived and how XD compares on this framework, review the Explore the SWS fair ratio for XD.
Result: Price-to-earnings of 11.6x (ABOUT RIGHT)
However, XD still faces risks if investor sentiment toward Hong Kong entertainment stocks weakens further, or if future earnings differ from current market expectations.
Find out about the key risks to this XD narrative.
Another view on XD using the SWS DCF model
The SWS DCF model paints a very different picture for XD. It estimates fair value at HK$120.70 a share, while the stock trades at HK$42.86. That implies a very large discount if those future cash flow assumptions hold. Which view do you treat as the anchor?
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 XD 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 266 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 XD's story pulling in different directions, it is worth checking the data yourself and forming a view quickly based on what matters most to you. To see what investors find encouraging right now, review the 3 key rewards.
Looking for more investment ideas beyond XD?
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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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