Is There Now An Opportunity In Jiangsu Yanghe Distillery Co., Ltd. (SZSE:002304)?

Today we're going to take a look at the well-established Jiangsu Yanghe Distillery Co., Ltd. (SZSE:002304). The company's stock saw significant share price movement during recent months on the SZSE, rising to highs of CN¥98.06 and falling to the lows of CN¥78.32. 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 Jiangsu Yanghe Distillery's current trading price of CN¥78.32 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 Jiangsu Yanghe Distillery’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Jiangsu Yanghe Distillery

Is Jiangsu Yanghe Distillery Still Cheap?

Good news, investors! Jiangsu Yanghe Distillery 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 Jiangsu Yanghe Distillery’s ratio of 14.06x is below its peer average of 21.49x, which indicates the stock is trading at a lower price compared to the Beverage industry. However, given that Jiangsu Yanghe Distillery’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Jiangsu Yanghe Distillery?

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. Jiangsu Yanghe Distillery's earnings over the next few years are expected to increase by 33%, 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 002304 is currently below the industry PE ratio, it may be a great time to increase your holdings in the stock. With a positive 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 financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on 002304 for a while, now might be the time to make a leap. Its buoyant future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 002304. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Jiangsu Yanghe Distillery.

If you are no longer interested in Jiangsu Yanghe 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.