Changhong Huayi Compressor Valuation

Q: What is the Fair Price of 000404 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

000404 (CN¥7.43) is trading below our estimate of [[fair value]] (CN¥17.26)

Is 000404 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Below Fair Value
Significantly Below Fair Value
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of 000404 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 000404 (CN¥7.43) is trading below our estimate of fair value (CN¥17.26)

Significantly Below Fair Value: 000404 is trading below fair value by more than 20%.

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 000404?

Key metric: As 000404 is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for 000404. This is calculated by dividing 000404's market cap by their current earnings.
What is 000404's PE Ratio?
PE Ratio	11.2x
Earnings	CN¥463.04m
Market Cap	CN¥5.05b

000404 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.2x
Enterprise Value/EBITDA	3.3x
PEG Ratio	1x

Price to Earnings Ratio vs Peers

How does 000404's PE Ratio compare to its peers?

The above table shows the PE ratio for 000404 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PE	Estimated Growth	Market Cap
Peer Average	44.2x
002367 Canny Elevator	18.1x	6.4%	CN¥5.2b
002559 Jiangsu Yawei Machine Tool	51.1x	n/a	CN¥4.9b
001379 Shandong Tengda Fasten Tech	85.6x	n/a	CN¥5.6b
300403 Hanyu Group	22x	12.2%	CN¥5.0b
000404 Changhong Huayi Compressor	11.2x	11.2%	CN¥5.1b

Price-To-Earnings vs Peers: 000404 is good value based on its Price-To-Earnings Ratio (11.2x) compared to the peer average (44.2x).

Price to Earnings Ratio vs Industry

How does 000404's PE Ratio compare vs other companies in the CN Machinery Industry?

1 Company	Price / Earnings	Estimated Growth	Market Cap
002021 Zoje Resources Investment	4.9x	n/a	US$426.98m

No more companies available in this PE range

1 Company		Estimated Growth	Market Cap

No more companies

Price-To-Earnings vs Industry: 000404 is good value based on its Price-To-Earnings Ratio (11.2x) compared to the CN Machinery industry average (34.1x).

Price to Earnings Ratio vs Fair Ratio

What is 000404's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

000404 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	11.2x
Fair PE Ratio	16.3x

Price-To-Earnings vs Fair Ratio: 000404 is good value based on its Price-To-Earnings Ratio (11.2x) compared to the estimated Fair Price-To-Earnings Ratio (16.3x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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