Haitian International (SEHK:1882): Assessing Valuation as Serbian Plant Bolsters European Expansion Plans

Haitian International Holdings (SEHK:1882) has moved ahead with its European expansion plans by launching a new production facility in Ruma, Serbia. This site is set to boost local machinery manufacturing and support long-term growth for the company across Europe.

See our latest analysis for Haitian International Holdings.

This expansion news comes as Haitian International Holdings is showing steady momentum, with a 6.19% year-to-date share price return and a 14.75% total shareholder return over the past year. Investors seem to be recognizing the company’s growth potential in Europe, as reflected in recent share price strength.

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With the company’s shares trading at a notable discount to analyst targets, yet having already delivered above-market returns, the real question for investors is whether Haitian International remains undervalued or if future growth is already built into the price.

Price-to-Earnings of 9.8: Is it justified?

Haitian International Holdings is trading at a price-to-earnings (P/E) ratio of 9.8, placing it below both industry peers and the wider market at its last close of HK$22.14. This lower P/E reflects the market pricing in modest future expectations despite recent share price gains.

The price-to-earnings ratio measures how much investors are willing to pay for each unit of earnings. In the capital goods and machinery sector, it is a widely used yardstick that reflects sentiment around future earnings strength, business resilience, and risk appetite.

With Haitian's 9.8x P/E below the peer average of 13.2x and the Hong Kong Machinery industry’s 12.3x, the market is discounting its growth potential relative to rivals. This could signal either an overlooked value opportunity or skepticism around sustained earnings momentum. The SWS fair ratio stands only slightly lower at 9.5x, which suggests the multiple could move closer to that level as more data emerges.

Explore the SWS fair ratio for Haitian International Holdings

Result: Price-to-Earnings of 9.8 (UNDERVALUED)

However, slowing revenue growth and recent volatility in quarterly returns may present risks. These factors could challenge the current undervalued outlook for Haitian International.

Find out about the key risks to this Haitian International Holdings narrative.

Another View: Discounted Cash Flow Signals a Larger Upside

Looking from a different angle, our SWS DCF model values Haitian International at HK$42.56 per share. This suggests the stock is trading at a notable 48% discount to its estimated fair value. The model considers projected future cash flows and offers a broader perspective on intrinsic value. Does this deeper discount indicate that the market is missing something fundamental?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Haitian International Holdings for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 919 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Haitian International Holdings Narrative

If you’d rather draw your own conclusions or test a different perspective, you can quickly build a personalized view using our interactive tools. Do it your way.

A great starting point for your Haitian International Holdings research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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