Is Now The Time To Look At Buying Sinosteel Engineering & Technology Co., Ltd. (SZSE:000928)?

Sinosteel Engineering & Technology Co., Ltd. (SZSE:000928), might not be a large cap stock, but it saw a double-digit share price rise of over 10% in the past couple of months on the SZSE. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the 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 examine Sinosteel Engineering & Technology’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Sinosteel Engineering & Technology

What Is Sinosteel Engineering & Technology Worth?

According to our valuation model, Sinosteel Engineering & Technology seems to be fairly priced at around 16.76% above our intrinsic value, which means if you buy Sinosteel Engineering & Technology today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth CN¥5.09, there’s only an insignificant downside when the price falls to its real value. Furthermore, Sinosteel Engineering & Technology’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from Sinosteel Engineering & Technology?

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. Sinosteel Engineering & Technology's earnings over the next few years are expected to increase by 27%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in 000928’s positive outlook, 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 000928, 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.

If you want to dive deeper into Sinosteel Engineering & Technology, you'd also look into what risks it is currently facing. At Simply Wall St, we found 2 warning signs for Sinosteel Engineering & Technology and we think they deserve your attention.

If you are no longer interested in Sinosteel Engineering & Technology, 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.