At CN¥14.98, Is It Time To Put Hengli Petrochemical Co.,Ltd. (SHSE:600346) On Your Watch List?

Let's talk about the popular Hengli Petrochemical Co.,Ltd. (SHSE:600346). The company's shares received a lot of attention from a substantial price movement on the SHSE over the last few months, increasing to CN¥15.55 at one point, and dropping to the lows of CN¥13.74. 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 Hengli PetrochemicalLtd's current trading price of CN¥14.98 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 Hengli PetrochemicalLtd’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 Hengli PetrochemicalLtd

What Is Hengli PetrochemicalLtd Worth?

Good news, investors! Hengli PetrochemicalLtd 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 Hengli PetrochemicalLtd’s ratio of 16.71x is below its peer average of 33.72x, which indicates the stock is trading at a lower price compared to the Chemicals industry. What’s more interesting is that, Hengli PetrochemicalLtd’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of Hengli PetrochemicalLtd 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. 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. With profit expected to grow by 82% over the next couple of years, the future seems bright for Hengli PetrochemicalLtd. 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? Since 600346 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 600346 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 600346. 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 assessment.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Every company has risks, and we've spotted 2 warning signs for Hengli PetrochemicalLtd (of which 1 is a bit unpleasant!) you should know about.

If you are no longer interested in Hengli PetrochemicalLtd, 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.