At CN¥20.88, Is It Time To Put Hangzhou Silan Microelectronics Co.,Ltd (SHSE:600460) On Your Watch List?

While Hangzhou Silan Microelectronics Co.,Ltd (SHSE:600460) might not have the largest market cap around , it led the SHSE gainers with a relatively large price hike in the past couple of weeks. Shareholders may appreciate the recent price jump, but the company still has a way to go before reaching its yearly highs again. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Today we will analyse the most recent data on Hangzhou Silan MicroelectronicsLtd’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Hangzhou Silan MicroelectronicsLtd

What's The Opportunity In Hangzhou Silan MicroelectronicsLtd?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 6.05% above our intrinsic value, which means if you buy Hangzhou Silan MicroelectronicsLtd today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is CN¥19.69, there’s only an insignificant downside when the price falls to its real value. Furthermore, Hangzhou Silan MicroelectronicsLtd’s low beta implies that the stock is less volatile than the wider market.

Can we expect growth from Hangzhou Silan MicroelectronicsLtd?

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. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. In Hangzhou Silan MicroelectronicsLtd's case, its revenues over the next few years are expected to grow by 54%, indicating a highly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in 600460’s positive outlook, 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 confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on 600460, now may not be the most optimal 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.

If you'd like to know more about Hangzhou Silan MicroelectronicsLtd as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that Hangzhou Silan MicroelectronicsLtd has 2 warning signs and it would be unwise to ignore these.

If you are no longer interested in Hangzhou Silan MicroelectronicsLtd, 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.