Harbour Centre Development Limited (HKG:51) Has Attractive Fundamentals, Here’s Why
Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Harbour Centre Development Limited (HKG:51) due to its excellent fundamentals in more than one area. 51 is a financially-robust company with a a great track record of performance, trading at a great value. In the following section, I expand a bit more on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on Harbour Centre Development here.
Excellent balance sheet and good value
51 delivered a bottom-line expansion of 90.75% in the prior year, with its most recent earnings level surpassing its average level over the last five years. In addition to beating its historical values, 51 also outperformed its industry, which delivered a growth of 46.68%. This is an optimistic signal for the future. With a debt-to-equity ratio of 12.65%, 51’s debt level is reasonable. This implies that 51 has a healthy balance between taking advantage of low cost debt funding as well as sufficient financial flexibility without succumbing to the strict terms of debt. 51 seems to have put its debt to good use, generating operating cash levels of 0.55x 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.
51 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. Compared to the rest of the market, 51 is also trading below other listed companies on the HK stock exchange, relative to earnings generated. This further reaffirms that 51 is potentially undervalued.
Next Steps:
For Harbour Centre Development, there are three relevant factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for 51’s future growth? Take a look at our free research report of analyst consensus for 51’s outlook.
Dividend Income vs Capital Gains: Does 51 return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from 51 as an investment.
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 51? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
