Is It Time To Consider Buying Metallurgical Corporation of China Ltd. (HKG:1618)?

Metallurgical Corporation of China Ltd. (HKG:1618), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the SEHK over the last few months, increasing to HK$1.80 at one point, and dropping to the lows of HK$1.44. 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 Metallurgical Corporation of China's current trading price of HK$1.46 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 Metallurgical Corporation of China’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 Metallurgical Corporation of China

What's The Opportunity In Metallurgical Corporation of China?

According to our valuation model, Metallurgical Corporation of China seems to be fairly priced at around 7.09% above our intrinsic value, which means if you buy Metallurgical Corporation of China today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth HK$1.36, there’s only an insignificant downside when the price falls to its real value. What's more, Metallurgical Corporation of China’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What does the future of Metallurgical Corporation of China look like?

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 69% over the next couple of years, the future seems bright for Metallurgical Corporation of China. 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? 1618’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 1618, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, 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.

If you'd like to know more about Metallurgical Corporation of China as a business, it's important to be aware of any risks it's facing. You'd be interested to know, that we found 2 warning signs for Metallurgical Corporation of China and you'll want to know about these.

If you are no longer interested in Metallurgical Corporation of China, 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.