Is It Time To Consider Buying Anhui Gujing Distillery Co., Ltd. (SZSE:000596)?

Today we're going to take a look at the well-established Anhui Gujing Distillery Co., Ltd. (SZSE:000596). The company's stock saw significant share price movement during recent months on the SZSE, rising to highs of CN¥264 and falling to the lows of CN¥199. 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 Anhui Gujing Distillery's current trading price of CN¥217 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 Anhui Gujing Distillery’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Anhui Gujing Distillery

What's The Opportunity In Anhui Gujing Distillery?

According to our valuation model, Anhui Gujing Distillery seems to be fairly priced at around 15.21% above our intrinsic value, which means if you buy Anhui Gujing Distillery today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is CN¥188.04, there’s only an insignificant downside when the price falls to its real value. Furthermore, Anhui Gujing Distillery’s low beta implies that the stock is less volatile than the wider market.

What kind of growth will Anhui Gujing Distillery generate?

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. Anhui Gujing Distillery's earnings over the next few years are expected to increase by 70%, 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 000596’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 confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on 000596, 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For instance, we've identified 2 warning signs for Anhui Gujing Distillery (1 makes us a bit uncomfortable) you should be familiar with.

If you are no longer interested in Anhui Gujing Distillery, 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.