Is Now The Time To Look At Buying Sichuan Kexin Mechanical and Electrical Equipment Co.,Ltd (SZSE:300092)?

Sichuan Kexin Mechanical and Electrical Equipment Co.,Ltd (SZSE:300092), might not be a large cap stock, but it received a lot of attention from a substantial price increase on the SZSE over the last few months. While good news for shareholders, the company has traded much higher in the past year. Less-covered, small caps tend to present more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Today we will analyse the most recent data on Sichuan Kexin Mechanical and Electrical EquipmentLtd’s outlook and valuation to see if the opportunity still exists.

View our latest analysis for Sichuan Kexin Mechanical and Electrical EquipmentLtd

Is Sichuan Kexin Mechanical and Electrical EquipmentLtd Still Cheap?

Good news, investors! Sichuan Kexin Mechanical and Electrical EquipmentLtd 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. 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 Sichuan Kexin Mechanical and Electrical EquipmentLtd’s ratio of 18.49x is below its peer average of 34.65x, which indicates the stock is trading at a lower price compared to the Machinery industry. Another thing to keep in mind is that Sichuan Kexin Mechanical and Electrical EquipmentLtd’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 does the future of Sichuan Kexin Mechanical and Electrical EquipmentLtd look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. In the upcoming year, Sichuan Kexin Mechanical and Electrical EquipmentLtd's earnings are expected to increase by 25%, 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? Since 300092 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 300092 for a while, now might be the time to make a leap. Its prosperous future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 300092. 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 assessment.

It can be quite valuable to consider what analysts expect for Sichuan Kexin Mechanical and Electrical EquipmentLtd from their most recent forecasts. So feel free to check out our free graph representing analyst forecasts.

If you are no longer interested in Sichuan Kexin Mechanical and Electrical EquipmentLtd, 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.