Is Now The Time To Look At Buying Haitian International Holdings Limited (HKG:1882)?

While Haitian International Holdings Limited (HKG:1882) might not be the most widely known stock at the moment, it received a lot of attention from a substantial price increase on the SEHK over the last few months. 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, could the stock still be trading at a relatively cheap price? Let’s examine Haitian International Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for Haitian International Holdings

Is Haitian International Holdings still cheap?

Haitian International Holdings appears to be overvalued by 23% at the moment, based on my discounted cash flow valuation. The stock is currently priced at HK$27.45 on the market compared to my intrinsic value of HK$22.25. This means that the opportunity to buy Haitian International Holdings at a good price has disappeared! But, is there another opportunity to buy low in the future? Given that Haitian International Holdings’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 another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Haitian International Holdings 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 34% over the next couple of years, the future seems bright for Haitian International Holdings. 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? It seems like the market has well and truly priced in 1882’s positive outlook, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe 1882 should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on 1882 for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for 1882, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you want to dive deeper into Haitian International Holdings, you'd also look into what risks it is currently facing. You'd be interested to know, that we found 1 warning sign for Haitian International Holdings and you'll want to know about this.

If you are no longer interested in Haitian International Holdings, 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. 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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