Is Now The Time To Look At Buying Huali Industrial Group Company Limited (SZSE:300979)?

Today we're going to take a look at the well-established Huali Industrial Group Company Limited (SZSE:300979). The company's stock received a lot of attention from a substantial price movement on the SZSE over the last few months, increasing to CN¥79.34 at one point, and dropping to the lows of CN¥66.24. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Huali Industrial Group's current trading price of CN¥68.74 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Huali Industrial Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Huali Industrial Group

Is Huali Industrial Group Still Cheap?

According to our valuation model, Huali Industrial Group seems to be fairly priced at around 1.02% above our intrinsic value, which means if you buy Huali Industrial Group today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth CN¥68.04, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Huali Industrial Group’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Huali Industrial Group 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 32% over the next couple of years, the future seems bright for Huali Industrial Group. 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? It seems like the market has already priced in 300979’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 track record of its management team. 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 300979, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect 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 Huali Industrial Group, you'd also look into what risks it is currently facing. You'd be interested to know, that we found 1 warning sign for Huali Industrial Group and you'll want to know about this.

If you are no longer interested in Huali Industrial Group, 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.