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Brief Commentary On TCL Electronics Holdings Limited's (HKG:1070) Fundamentals

Simply Wall St

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I've been keeping an eye on TCL Electronics Holdings Limited (HKG:1070) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe 1070 has a lot to offer. Basically, it is a company that has been able to sustain great financial health, trading at an attractive share price. Below is a brief commentary on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on TCL Electronics Holdings here.

Flawless balance sheet and undervalued

1070's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that 1070 has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. 1070 seems to have put its debt to good use, generating operating cash levels of 1.86x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows. 1070 is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts' consensus forecast growth be correct. Also, relative to the rest of its peers with similar levels of earnings, 1070's share price is trading below the group's average. This bolsters the proposition that 1070's price is currently discounted.

SEHK:1070 Price Estimation Relative to Market, July 22nd 2019

Next Steps:

For TCL Electronics Holdings, I've put together three pertinent aspects you should further research:

  1. Future Outlook: What are well-informed industry analysts predicting for 1070’s future growth? Take a look at our free research report of analyst consensus for 1070’s outlook.
  2. Historical Performance: What has 1070's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 1070? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.