Xinyi Solar Holdings Limited (HKG:968), which is in the semiconductor business, and is based in China, received a lot of attention from a substantial price movement on the SEHK over the last few months, increasing to HK$5.20 at one point, and dropping to the lows of HK$4.37. 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 Xinyi Solar Holdings’s current trading price of HK$4.75 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 Xinyi Solar Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Is Xinyi Solar Holdings still cheap?
According to my valuation model, Xinyi Solar Holdings seems to be fairly priced at around 0.48% above my intrinsic value, which means if you buy Xinyi Solar Holdings today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is HK$4.73, 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 Xinyi Solar Holdings’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 Xinyi Solar Holdings?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to more than double over the next couple of years, the future seems bright for Xinyi Solar Holdings. 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? 968’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 968, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook 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 Xinyi Solar Holdings. You can find everything you need to know about Xinyi Solar Holdings in the latest infographic research report. If you are no longer interested in Xinyi Solar Holdings, 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 firstname.lastname@example.org. 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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