At CN¥24.12, Is Zhejiang Chint Electrics Co., Ltd. (SHSE:601877) Worth Looking At Closely?

Zhejiang Chint Electrics Co., Ltd. (SHSE:601877), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the SHSE. The recent share price gains has brought the company back closer to 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. But what if there is still an opportunity to buy? Let’s take a look at Zhejiang Chint Electrics’s outlook and value based on the most recent financial data to see if the opportunity still exists.

What Is Zhejiang Chint Electrics Worth?

Good news, investors! Zhejiang Chint Electrics is still a bargain right now according to our price multiple model, which compares the company's price-to-earnings ratio to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 12.36x is currently well-below the industry average of 41.92x, meaning that it is trading at a cheaper price relative to its peers. What’s more interesting is that, Zhejiang Chint Electrics’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. 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.

See our latest analysis for Zhejiang Chint Electrics

What does the future of Zhejiang Chint Electrics look like?

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. With profit expected to grow by 30% over the next couple of years, the future seems bright for Zhejiang Chint Electrics. 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 601877 is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. With an optimistic 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 601877 for a while, now might be the time to enter the stock. Its buoyant future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 601877. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

If you want to dive deeper into Zhejiang Chint Electrics, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 1 warning sign with Zhejiang Chint Electrics, and understanding this should be part of your investment process.

If you are no longer interested in Zhejiang Chint Electrics, 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.