Is It Too Late To Consider Buying Kingfa Sci. & Tech. Co., Ltd. (SHSE:600143)?

While Kingfa Sci. & Tech. Co., Ltd. (SHSE:600143) might not have the largest market cap around , it saw a decent share price growth of 13% on the SHSE over the last few months. While good news for shareholders, the company has traded much higher in the past year. As a CN¥18b market cap stock, it seems odd Kingfa Sci. & Tech is not more well-covered by analysts. However, this is not necessarily a bad thing given that there are less eyes on the stock to push it closer to fair value. Is there still an opportunity to buy? Let’s take a look at Kingfa Sci. & Tech’s outlook and value based on the most recent financial data to see if the opportunity still exists.

View our latest analysis for Kingfa Sci. & Tech

What's The Opportunity In Kingfa Sci. & Tech?

Great news for investors – Kingfa Sci. & Tech is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 14.35x is currently well-below the industry average of 29.92x, meaning that it is trading at a cheaper price relative to its peers. Kingfa Sci. & Tech’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its industry peers, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.

What kind of growth will Kingfa Sci. & Tech 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. Kingfa Sci. & Tech's earnings over the next few years are expected to increase by 93%, 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 600143 is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. With a positive 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 600143 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 600143. 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.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. When we did our research, we found 2 warning signs for Kingfa Sci. & Tech (1 doesn't sit too well with us!) that we believe deserve your full attention.

If you are no longer interested in Kingfa Sci. & Tech, 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.