At CN¥46.35, Is It Time To Put Jiangsu Xinquan Automotive Trim Co.,Ltd. (SHSE:603179) On Your Watch List?

Jiangsu Xinquan Automotive Trim Co.,Ltd. (SHSE:603179), might not be a large cap stock, but it saw a significant share price rise of 39% in the past couple of months on the SHSE. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today we will analyse the most recent data on Jiangsu Xinquan Automotive TrimLtd’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Jiangsu Xinquan Automotive TrimLtd

What Is Jiangsu Xinquan Automotive TrimLtd Worth?

Great news for investors – Jiangsu Xinquan Automotive TrimLtd is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that Jiangsu Xinquan Automotive TrimLtd’s ratio of 24.28x is below its peer average of 31.08x, which indicates the stock is trading at a lower price compared to the Auto Components industry. Another thing to keep in mind is that Jiangsu Xinquan Automotive TrimLtd’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its industry peers, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

What kind of growth will Jiangsu Xinquan Automotive TrimLtd generate?

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 grow by 80% over the next couple of years, the future seems bright for Jiangsu Xinquan Automotive TrimLtd. 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? Since 603179 is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. With a positive profit outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on 603179 for a while, now might be the time to enter the stock. Its prosperous future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 603179. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For example, we've found that Jiangsu Xinquan Automotive TrimLtd has 2 warning signs (1 is significant!) that deserve your attention before going any further with your analysis.

If you are no longer interested in Jiangsu Xinquan Automotive TrimLtd, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.