At CN¥19.73, Is It Time To Put Shanghai Putailai New Energy Technology Co.,Ltd. (SHSE:603659) On Your Watch List?

While Shanghai Putailai New Energy Technology Co.,Ltd. (SHSE:603659) might not have the largest market cap around , it saw a significant share price rise of 29% in the past couple of months on the SHSE. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s examine Shanghai Putailai New Energy TechnologyLtd’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Shanghai Putailai New Energy TechnologyLtd

What's The Opportunity In Shanghai Putailai New Energy TechnologyLtd?

According to our valuation model, Shanghai Putailai New Energy TechnologyLtd seems to be fairly priced at around 8.8% below our intrinsic value, which means if you buy Shanghai Putailai New Energy TechnologyLtd today, you’d be paying a reasonable price for it. And if you believe the company’s true value is CN¥21.63, then there’s not much of an upside to gain from mispricing. So, is there another chance to buy low in the future? Given that Shanghai Putailai New Energy TechnologyLtd’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 kind of growth will Shanghai Putailai New Energy TechnologyLtd generate?

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 more than double over the next couple of years, the future seems bright for Shanghai Putailai New Energy TechnologyLtd. 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? 603659’s optimistic future growth appears to have been factored into the current share price, 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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on 603659, now may not be the most advantageous 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 diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. Every company has risks, and we've spotted 4 warning signs for Shanghai Putailai New Energy TechnologyLtd (of which 1 is concerning!) you should know about.

If you are no longer interested in Shanghai Putailai New Energy TechnologyLtd, 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.