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How Tianneng Power International Limited (HKG:819) Could Add Value To Your Portfolio

Simply Wall St

Attractive stocks have exceptional fundamentals. In the case of Tianneng Power International Limited (HKG:819), there's is a financially-sound company with a strong history of performance, trading at a great value. Below, I've touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Tianneng Power International here.

Very undervalued with solid track record and pays a dividend

Over the past few years, 819 has demonstrated a proven ability to generate robust returns of 23%. Unsurprisingly, 819 surpassed the Auto Components industry return of 14%, which gives us more confidence of the company's capacity to drive earnings going forward. 819 is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is a crucial insight into the health of the company. 819 appears to have made good use of debt, producing operating cash levels of 0.77x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.

SEHK:819 Income Statement, August 24th 2019

819 is currently trading below its true value, which means the market is undervaluing the company's expected cash flow going forward. Investors have the opportunity to buy into the stock to reap capital gains, if 819's projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Also, relative to the rest of its peers with similar levels of earnings, 819's share price is trading below the group's average. This bolsters the proposition that 819's price is currently discounted.

SEHK:819 Intrinsic value, August 24th 2019

Next Steps:

For Tianneng Power International, there are three essential aspects you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for 819’s future growth? Take a look at our free research report of analyst consensus for 819’s outlook.
  2. Dividend Income vs Capital Gains: Does 819 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 819 as an investment.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 819? 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.