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Why Sunny Optical Technology (Group) Company Limited (HKG:2382) Could Be A Buy

Sunny Optical Technology (Group) Company Limited (SEHK:2382) saw a decent share price growth in the teens level on the SEHK over the last few months. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Sunny Optical Technology (Group)’s outlook and value based on the most recent financial data to see if the opportunity still exists. Check out our latest analysis for Sunny Optical Technology (Group)

Is Sunny Optical Technology (Group) still cheap?

Sunny Optical Technology (Group) appears to be overpriced by 71% at the moment, based on my discounted cash flow valuation. The stock is currently priced at HK$112.4 on the market compared to my intrinsic value of HK$65.65. This means that the opportunity to buy Sunny Optical Technology (Group) at a good price has disappeared! But, is there another opportunity to buy low in the future? Given that Sunny Optical Technology (Group)’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Sunny Optical Technology (Group) look like?

SEHK:2382 Future Profit Jan 29th 18
SEHK:2382 Future Profit Jan 29th 18

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. Sunny Optical Technology (Group)’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? Sunny Optical Technology (Group)’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe Sunny Optical Technology (Group) should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on Sunny Optical Technology (Group) for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for Sunny Optical Technology (Group), which means it’s worth diving deeper into other factors 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 Sunny Optical Technology (Group). You can find everything you need to know about Sunny Optical Technology (Group) in the latest infographic research report. If you are no longer interested in Sunny Optical Technology (Group), you can use our free platform to see my list of over 50 other stocks with a high growth potential.


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.

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