U.S. Markets close in 3 hrs 2 mins

Should You Be Holding Zhong Hua International Holdings Limited (HKG:1064)?

Simply Wall St

I've been keeping an eye on Zhong Hua International Holdings Limited (HKG:1064) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe 1064 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. In the following section, I expand a bit more on these key aspects. If you're interested in understanding beyond my broad commentary, take a look at the report on Zhong Hua International Holdings here.

Excellent balance sheet and good value

1064's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that 1064 manages its cash and cost levels well, which is a key determinant of the company’s health. 1064's has produced operating cash levels of 0.28x total debt over the past year, which implies that 1064's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings. 1064's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. 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 HK companies with similar levels of earnings, 1064's share price is trading below the group's average. This bolsters the proposition that 1064's price is currently discounted.

SEHK:1064 Intrinsic value, August 26th 2019

Next Steps:

For Zhong Hua International Holdings, I've put together three relevant factors you should further examine:

  1. Future Outlook: What are well-informed industry analysts predicting for 1064’s future growth? Take a look at our free research report of analyst consensus for 1064’s outlook.
  2. Historical Performance: What has 1064'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 1064? 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.