FriendTimes (SEHK:6820) Stock Looks Cheap But Earnings Quality Remains Key

FriendTimes closed at HK$0.39 on Wednesday, leaving the stock down roughly 3% over the past week and month and about 13% over three months. That muted price suggests short term fatigue. The headline from these results is different. Trailing 12 month earnings almost doubled year on year and net profit margin moved into double digits, helped by a sizeable one off gain of CN¥117.6m.

The immediate share price reaction indicates that traders are cautious. The earnings mix indicates that the real focus now is on quality, sustainability and what investors are willing to pay for a P/E of 5.7x.

Is FriendTimes a low P/E bargain at 5.7x, or a value trap given the one off CN¥117.6m gain and the 39.4% annual earnings decline over five years? Compare the market price to our valuation analysis for FriendTimes

H1 2026 Earnings Summary

Revenue (H1 2026 vs H1 2025): CN¥599.5m vs. CN¥623.5m (declined 3.8%)
Net Income Excluding Extra Items (H1 2026 vs H1 2025): CN¥70.9m vs. CN¥40.7m (up 74.0%)
Basic EPS (H1 2026 vs H1 2025): CN¥0.03 vs. CN¥0.0194 (up 54.7%)
Net Profit Margin (Trailing 12 Months vs Prior Year): 10.1% vs. 5.1% (margin roughly doubled year over year)

If you prefer clean charts instead of another wall of earnings tables and footnotes, view FriendTimes’ full visual breakdown, including how its valuation compares at a glance, in our company report for FriendTimes.

SEHK:6820 Trailing 12-Month Revenue & Expenses Breakdown as at Aug 2026

FriendTimes earnings tilt towards margin resilience

For FriendTimes, the latest earnings give the more positive narrative some support. Revenue in H1 2026 declined 3.8%, yet net income excluding extra items rose to CN¥70.9m and basic EPS reached CN¥0.03. That points to better cost control or an improved mix of higher margin content. The trailing net profit margin moving to 10.1% from 5.1% also fits a story of a business that is learning to monetise its existing audience more efficiently, even without top line expansion.

FriendTimes results still flag revenue and growth risks

On the cautious side, FriendTimes shows pressure where a hit driven gaming stock is most exposed. Revenue fell 3.8% year on year in H1 2026, which can hint at maturing titles or softer in game spending. The share price has also declined over 7 days, 30 days and 90 days, which suggests investors are not yet convinced that recent margin gains offset the longer term earnings decline highlighted earlier. The directional picture supports concerns about growth momentum even as short term profitability holds up.

Scan our independent FriendTimes risk scoring to see if the dividend track record and earnings mix hint at deeper issues in the risk analysis for FriendTimes which shows 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.