Should You Investigate Beijing Urban Construction Design & Development Group Co., Limited (HKG:1599) At HK$2.25?
Beijing Urban Construction Design & Development Group Co., Limited (HKG:1599), which is in the construction business, and is based in Hong Kong, saw a double-digit share price rise of over 10% in the past couple of months on the SEHK. As a small cap stock, which tends to lack high analyst coverage, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let’s examine Beijing Urban Construction Design & Development Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
View our latest analysis for Beijing Urban Construction Design & Development Group
What's the opportunity in Beijing Urban Construction Design & Development Group?
According to my valuation model, Beijing Urban Construction Design & Development Group seems to be fairly priced at around 7.82% above my intrinsic value, which means if you buy Beijing Urban Construction Design & Development Group today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth HK$2.09, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since Beijing Urban Construction Design & Development 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.
Can we expect growth from Beijing Urban Construction Design & Development Group?
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. With profit expected to grow by 37% over the next couple of years, the future seems bright for Beijing Urban Construction Design & Development Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? 1599’s optimistic future growth appears to have been factored into the current share price, 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 1599, 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 further examining 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 Beijing Urban Construction Design & Development Group. You can find everything you need to know about Beijing Urban Construction Design & Development Group in the latest infographic research report. If you are no longer interested in Beijing Urban Construction Design & Development Group, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
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.
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