Analysis of Popular Stock Jiahong Education (01935.HK): Dual Drivers of Extreme Undervaluation and Sector Recovery

Item	Data
Stock Code	01935.HK
Company Name	Jiahong Education
Industry	Education and Training Services
Current Price	HK$0.85
Total Market Capitalization	Approx. HK$1.44 Billion
52-Week Price Range	HK$0.69 - HK$1.29
Price-to-Earnings Ratio (TTM)	Approx. 4.2-4.64x
Price-to-Book Ratio	Approx. 0.4x
Turnover Rate	Extremely Low (Approx. 0.00%)

Jiahong Education currently has a P/E ratio of only 4.2-4.64x, far below the education industry’s average valuation of approximately 11x; its P/B ratio is only 0.4x, also significantly lower than the industry average of approximately 1.4x [3]. This extreme undervaluation makes it a focus for value investors, with the stock price near its 52-week low, leaving ample room for a rebound and valuation recovery. The company’s current price of HK$0.85 is about 23% above the 52-week low of HK$0.69, and there is over 50% upside potential from the 52-week high of HK$1.29 [1][3].

From November to December 2025, the Hong Kong education sector saw a collective recovery. On November 16, 2025, the education sector rallied collectively, and Jiahong Education’s activity increased accordingly. On September 23, 2025, driven by the Ministry of Education’s announcement of building the world’s largest vocational education system, some education stocks rose against the market, and most stocks in the sector to which Jiahong Education belongs gained [2][3]. Vocational education has received policy support, the industry’s regulatory environment has normalized, and encouraging development has become the main tone, providing medium- to long-term support for the sector.

The company’s first-half 2025 financial report shows revenue of RMB 535 million, a 3% year-on-year increase, mainly benefiting from higher tuition and accommodation fees driven by increased enrollment quotas. However, net profit was RMB 305 million, a 10% year-on-year decline; core net profit was RMB 307 million, an 11% year-on-year decline [2]. Although net profit has declined, revenue growth indicates that the core business remains stable, and the slight decline in profitability may be related to rising costs or one-off factors.

Date	Performance
November 11, 2025	+6.67%
November 24, 2025	+8.11%, stock price reached HK$0.80
December 3, 2025	Stabilized at HK$0.82
January 7, 2026	-6.593%, current price HK$0.85

Recent trading volume has been extremely low; for example, trading volume was only 106,000 shares on November 26, 2025. The increase in trading volume when it entered the popular stock list indicates rising capital attention. Order flow data shows a net inflow of HK$29.14K, accounting for 90.23% of total flow [2]. The extremely low turnover rate (approx. 0.00%) indicates high liquidity risk for this stock; investors need to be aware that the bid-ask spread may widen, making it difficult to enter or exit positions [1][3].

Type	Price	Meaning
Strong Support Level	HK$0.69	52-week low, key technical support
Short-term Support	HK$0.80	Lower edge of recent consolidation range
Current Price	HK$0.85	Mid-to-lower position in the range
Short-term Resistance	HK$1.00	Psychological pressure at integer level
Medium-term Resistance	HK$1.29	52-week high

The popularity of Jiahong Education stems not only from its own undervaluation attribute but also from the overall sentiment recovery in the Hong Kong stock market. On the first trading day of 2026, Hong Kong stocks closed higher across the board, with the Hang Seng Index rising 2.76%, and improved market risk appetite brought attention to undervalued cyclical stocks [5]. However, it is worth noting that the overall attention to the education sector is still lower than that of popular technology stocks, so the capital rotation effect may be limited.

The current extreme undervaluation of 4.2x may reflect the market’s overpricing of policy uncertainty in the education industry. Once policies become clear or positive signals emerge in the industry, there is considerable room for valuation recovery. However, at the same time, the excessively low valuation may also imply market concerns about the deterioration of the company’s fundamentals, especially the continuous downward trend of net profit, which warrants vigilance.

1. Valuation Recovery Potential:
   The P/E ratio is only 4.2x, representing a huge discount compared to the industry average of 11x, leaving ample room for valuation reversion
2. Sector Popularity Spillover:
   The overall recovery of the education sector makes undervalued stocks more likely to attract capital
3. Policy Support Expectation:
   Vocational education has received continuous policy support, and the main tone of building the world’s largest vocational education system is beneficial to industry development

Risk Type	Specific Description	Risk Level
Liquidity Risk	Extremely low trading volume, bid-ask spread may widen, making position entry/exit difficult [3]	High
Performance Pressure	10% year-on-year decline in net profit, profitability under pressure [2]	Medium-High
Policy and Regulatory Risk	The education sector is highly affected by policies, and changes in the regulatory environment may impact operations [3]	Medium
Uncertainty in Valuation Recovery	Whether undervaluation will continue to attract capital remains to be seen [3]	Medium
Industry Competition	The education sector is highly competitive, which may affect market share and pricing power	Medium

• ⚠️ Persistently low trading volume may make the stock price vulnerable to manipulation
• ⚠️ Continuous decline in net profit; need to monitor whether the downward trend continues
• ⚠️ Policy uncertainty in the education sector still exists
• ⚠️ A single-day drop of 6.593% on January 7, 2026, indicates high stock price volatility [1]

The core logic behind Jiahong Education (01935.HK) becoming a popular stock is

. With a P/E ratio of only 4.2x, it is in a state of severe undervaluation, and has valuation recovery potential against the backdrop of the overall recovery of the education sector. However, investors need to pay attention to the following key information:

1. High Liquidity Risk:
   Sluggish trading volume may affect position entry/exit; it is recommended to participate with small positions
2. Performance Under Pressure:
   The downward trend of net profit needs close monitoring; fundamental improvement is a prerequisite for valuation recovery
3. Catalyst Timeliness:
   The sustainability of sector popularity remains to be verified; need to monitor subsequent policy developments and performance
4. Technical Position:
   The current price is in the mid-to-lower range of the consolidation band; HK$0.69-HK$0.80 is a key support range

Strong support level at HK$0.69 (52-week low), short-term resistance at HK$1.00 (psychological level), medium-term resistance at HK$1.29 (52-week high) [3].

This report is compiled based on public market information, for reference only, and does not constitute investment advice. Investors should make prudent decisions based on their own risk tolerance.