China Longyuan Power Group (SEHK:916) Half Year Earnings Put Valuation Back In Focus

Half year results put China Longyuan Power Group in focus

China Longyuan Power Group (SEHK:916) has drawn fresh attention after reporting half year 2026 results that showed revenue and net income below the prior year period.

For the six months ended June 30, 2026, the company reported sales of CNY 14,598.61 million and revenue of CNY 14,642.31 million, both lower than the figures a year earlier.

Net income for the period was CNY 2,392.7 million, compared with CNY 3,374.79 million in the prior year half. Basic and diluted earnings per share from continuing operations were CNY 0.2862, down from CNY 0.4037.

This earnings update arrived against a weak recent share price backdrop. The stock was last at HK$5.345 on August 29, 2026, with declines over the past month, past 3 months, year to date and the past year.

The half year earnings announcement on August 27, 2026 appears to have coincided with fading momentum for China Longyuan Power Group, with the 30 day share price return down 4.81% and the year to date share price return down 20.93%, contributing to a 25.87% decline in 1 year total shareholder return.

Compare China Longyuan Power Group's recent pullback with a curated group of utilities and infrastructure stocks screened for resilient balance sheets through our list of solid balance sheet and fundamentals (439 results).

China Longyuan Power Group combines a long established renewables business with a share price that has retreated sharply after weaker half year earnings. The key question is whether that recent slide already reflects the risk, or whether the stock is still priced for more.

Price to earnings valuation for China Longyuan Power Group

On simple P/E metrics, China Longyuan Power Group looks relatively lowly priced. The stock closed at HK$5.345, with a P/E of 10.5x that is below both the Hong Kong market average and the renewable energy peer group.

The P/E ratio compares what investors are paying today for each unit of current earnings. For a utility scale renewables business like China Longyuan Power Group, this provides a quick sense of how the market is weighing its earnings profile against other listed companies.

Here, the picture is quite specific. The stock trades on a P/E of 10.5x, while the broader Hong Kong market sits at 11.3x and renewable energy peers in Asia are around the mid teens. Internal valuation work suggests a P/E closer to 13.7x as an estimate of fair value for the company. This is a higher level that the multiple could move toward if sentiment and expectations aligned more closely with that estimate.

To see how this estimated fair multiple compares in more detail, take a closer look at the Explore the SWS fair ratio for China Longyuan Power Group.

Result: Price-to-earnings of 10.5x (UNDERVALUED)

However, you still need to factor in risks such as recent share price weakness and the possibility that softer earnings persist and weigh on sentiment toward China Longyuan Power Group.

Find out about the key risks to this China Longyuan Power Group narrative.

Another view on China Longyuan Power Group's value

While the P/E of 10.5x suggests China Longyuan Power Group is on the cheaper side, the SWS DCF model points in the other direction. It places fair value around HK$3.86 per share, which implies the stock is trading above that estimate and could be overvalued on this basis. Which signal do you put more weight on?

To see how this cash flow based view is built step by step, take a look at the 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 Longyuan Power 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

If this mix of softer earnings and valuation signals around China Longyuan Power Group feels conflicting, consider quickly reviewing the full picture to form your own stance with 4 key rewards and 2 important warning signs.

Looking for more investment ideas beyond China Longyuan Power Group?

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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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