<div id="readability-page-1"><div><p>XD (SEHK:2400) has started buying back its own shares under a shareholder approved mandate, with capacity to repurchase up to 49,167,523 shares, representing 10% of its issued share capital.</p> <p>See our latest analysis for XD.</p> <p>XD’s share repurchase program arrives after a strong run, with a 30 day share price return of 27.89% and a 1 year total shareholder return of 243.35%, suggesting momentum has been building despite some shorter term swings.</p> <p>If this kind of buyback fueled story has your attention, it could be a good moment to broaden your search and check out fast growing stocks with high insider ownership.</p> <p>With XD trading around HK$82.55 and an indicated intrinsic value gap of about 20%, plus fresh buybacks in motion, you have to ask: is there still mispricing here, or is the market already baking in future growth?</p> <h2>Price-to-Earnings of 26.2x: Is it justified?</h2> <p>XD trades on a P/E of 26.2x, which looks expensive next to both its Hong Kong Entertainment peers and the broader peer group, even after strong recent returns.</p> <p>The P/E ratio compares the current share price with earnings per share, so a higher number usually reflects stronger earnings expectations or a willingness to pay up for profitability. For a game publisher and platform operator like XD, a richer P/E can sometimes go hand in hand with fast earnings growth and scalable digital economics.</p> <p>Here, the tension is clear. XD has very strong recent earnings growth and an outstanding 45.2% return on equity. However, the P/E of 26.2x stands well above the Hong Kong Entertainment industry average of 13.6x and the peer average of 10.9x. It is also high compared to the estimated fair P/E of 15.3x, a level the market could move toward if expectations cool or growth normalises.</p> <p>Explore the SWS fair ratio for XD</p> <p><strong>Result: Price-to-Earnings of 26.2x (OVERVALUED)</strong></p> <p>However, you still have to weigh risks such as XD’s P/E compressing toward the 15.3x fair level, or buybacks slowing if earnings momentum fades.</p> <p>Find out about the key risks to this XD narrative.</p> <h2>Another View: DCF Points to Undervaluation</h2> <p>While the 26.2x P/E suggests XD looks expensive next to its industry and peer averages, our DCF model paints a different picture. With the shares at HK$82.55 versus an estimated fair value of HK$103.43, the model implies XD is trading at a meaningful discount. This raises the question of whether the earnings multiple is too harsh or the cash flow outlook is too generous.</p> <p>Look into how the SWS DCF model arrives at its fair value.</p> <figure><img height="476" src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/c72613a2-cf37-4329-adfe-f41546387224/chart/dcf?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="746" original-src="https://imageproxy.pbkrs.com/https://images.simplywall.st/company/c72613a2-cf37-4329-adfe-f41546387224/chart/dcf"/><figcaption>2400 Discounted Cash Flow as at Jan 2026</figcaption></figure><p>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 876 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.</p> <h2> Build Your Own XD Narrative</h2> <p>If you look at this and think the story plays out differently, or simply prefer to test the numbers yourself, you can build a custom view in just a few minutes with Do it your way.</p> <p>A great starting point for your XD research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.</p> <h2>Looking for more investment ideas?</h2> <p>If XD has sharpened your curiosity, do not stop here. Broaden your watchlist now or you could miss opportunities sitting in plain sight.</p> <ul> <li>Target higher income potential by scanning these 14 dividend stocks with yields &gt; 3% that might suit an income focused approach.</li> <li>Ride major tech shifts by checking out these 23 AI penny stocks that are tied to artificial intelligence themes.</li> <li>Hunt for value by reviewing these 876 undervalued stocks based on cash flows that may trade below their estimated cash flow based worth.</li> </ul> <p><em> This article by Simply Wall St is general in nature. <strong>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.</strong> 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.</em></p></div></div>

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<p>XD Inc. (SEHK:2400) has initiated a share buyback program, allowing the repurchase of up to 49,167,523 shares, or 10% of its issued capital. Despite a strong 30-day return of 27.89% and a 1-year return of 243.35%, its P/E ratio of 26.2x appears high compared to industry averages. A DCF analysis suggests the stock may be undervalued, trading at HK$82.55 against an estimated fair value of HK$103.43. Investors should consider the risks of P/E compression and the potential impact of slowing buybacks on earnings momentum.</p>

XD Inc. (SEHK:2400) Valuation Check After Launch Of Share Buyback Programme