Haier Electronics Group Co., Ltd. (HKG:1169), which is in the consumer durables business, and is based in Hong Kong, saw significant share price movement during recent months on the SEHK, rising to highs of HK$23.15 and falling to the lows of HK$19. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Haier Electronics Group's current trading price of HK$19.12 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Haier Electronics Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Is Haier Electronics Group still cheap?
The stock seems fairly valued at the moment according to my valuation model. It’s trading around 9.3% below my intrinsic value, which means if you buy Haier Electronics Group today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth HK$21.08, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since Haier Electronics Group’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What does the future of Haier Electronics Group look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. Haier Electronics Group’s earnings over the next few years are expected to increase by 32%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has already priced in 1169’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on 1169, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Haier Electronics Group. You can find everything you need to know about Haier Electronics Group in the latest infographic research report. If you are no longer interested in Haier Electronics Group, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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If you spot an error that warrants correction, please contact the editor at email@example.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.