At HK$3.22, Is AviChina Industry & Technology Company Limited (HKG:2357) Worth Looking At Closely?

AviChina Industry & Technology Company Limited (HKG:2357), might not be a large cap stock, but it saw a decent share price growth of 16% on the SEHK over the last few months. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. 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. But what if there is still an opportunity to buy? Let’s examine AviChina Industry & Technology’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for AviChina Industry & Technology

Is AviChina Industry & Technology Still Cheap?

According to our valuation model, AviChina Industry & Technology seems to be fairly priced at around 1.8% below our intrinsic value, which means if you buy AviChina Industry & Technology today, you’d be paying a fair price for it. And if you believe the company’s true value is HK$3.28, then there isn’t much room for the share price grow beyond what it’s currently trading. In addition to this, AviChina Industry & Technology has a low beta, which suggests its share price is less volatile than the wider market.

What kind of growth will AviChina Industry & Technology generate?

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 41% over the next couple of years, the future seems bright for AviChina Industry & 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? It seems like the market has already priced in 2357’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 2357, 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 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 want to dive deeper into AviChina Industry & Technology, you'd also look into what risks it is currently facing. In terms of investment risks, we've identified 1 warning sign with AviChina Industry & Technology, and understanding it should be part of your investment process.

If you are no longer interested in AviChina Industry & Technology, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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

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.