Why Beijing Oriental Yuhong Waterproof Technology Co., Ltd. (SZSE:002271) Could Be Worth Watching

While Beijing Oriental Yuhong Waterproof Technology Co., Ltd. (SZSE:002271) might not have the largest market cap around , it saw significant share price movement during recent months on the SZSE, rising to highs of CN¥17.85 and falling to the lows of CN¥12.12. 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 Beijing Oriental Yuhong Waterproof Technology's current trading price of CN¥13.04 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Beijing Oriental Yuhong Waterproof Technology’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Beijing Oriental Yuhong Waterproof Technology

Is Beijing Oriental Yuhong Waterproof Technology Still Cheap?

According to our price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. 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 13.84x is currently trading slightly below its industry peers’ ratio of 16.51x, which means if you buy Beijing Oriental Yuhong Waterproof Technology today, you’d be paying a reasonable price for it. And if you believe Beijing Oriental Yuhong Waterproof Technology should be trading in this range, then there isn’t much room for the share price to grow beyond the levels of other industry peers over the long-term. Furthermore, Beijing Oriental Yuhong Waterproof Technology’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. This may mean it is less likely for the stock to fall lower from natural market volatility, which suggests less opportunities to buy moving forward.

Can we expect growth from Beijing Oriental Yuhong Waterproof Technology?

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. With profit expected to grow by 64% over the next couple of years, the future seems bright for Beijing Oriental Yuhong Waterproof Technology. 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? 002271’s optimistic future growth appears to have been factored into the current share price, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at 002271? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?

Are you a potential investor? If you’ve been keeping an eye on 002271, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the positive outlook is encouraging for 002271, 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.

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. At Simply Wall St, we found 1 warning sign for Beijing Oriental Yuhong Waterproof Technology and we think they deserve your attention.

If you are no longer interested in Beijing Oriental Yuhong Waterproof Technology, 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com