Should You Investigate Zhejiang Dingli Machinery Co.,Ltd (SHSE:603338) At CN¥63.55?

While Zhejiang Dingli Machinery Co.,Ltd (SHSE:603338) might not have the largest market cap around , it saw a double-digit share price rise of over 10% in the past couple of months on the SHSE. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. With many analysts covering the mid-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 Zhejiang Dingli MachineryLtd’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for Zhejiang Dingli MachineryLtd

What Is Zhejiang Dingli MachineryLtd Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 16.12% above our intrinsic value, which means if you buy Zhejiang Dingli MachineryLtd today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is CN¥54.73, 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 Zhejiang Dingli MachineryLtd’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.

What does the future of Zhejiang Dingli MachineryLtd 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. 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 41% over the next couple of years, the future seems bright for Zhejiang Dingli MachineryLtd. 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? 603338’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 confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping tabs on 603338, now may not be the most advantageous 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Case in point: We've spotted 1 warning sign for Zhejiang Dingli MachineryLtd you should be aware of.

If you are no longer interested in Zhejiang Dingli MachineryLtd, 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.