At HK$3.67, Is It Time To Put AviChina Industry & Technology Company Limited (HKG:2357) On Your Watch List?

AviChina Industry & Technology Company Limited (HKG:2357), is not the largest company out there, but it saw significant share price movement during recent months on the SEHK, rising to highs of HK$3.74 and falling to the lows of HK$3.36. 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 AviChina Industry & Technology's current trading price of HK$3.67 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 AviChina Industry & Technology’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for AviChina Industry & Technology

Is AviChina Industry & Technology Still Cheap?

AviChina Industry & Technology appears to be overvalued by 33% at the moment, based on my discounted cash flow valuation. The stock is currently priced at HK$3.67 on the market compared to my intrinsic value of HK$2.76. Not the best news for investors looking to buy! But, is there another opportunity to buy low in the future? Since AviChina Industry & Technology’s share price is quite volatile, this could mean it can sink lower (or rise even further) in the future, giving us another chance to invest. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from AviChina Industry & Technology?

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. 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. AviChina Industry & Technology's earnings over the next few years are expected to increase by 42%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? 2357’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe 2357 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 an eye on 2357 for a while, 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 2357, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. While conducting our analysis, we found that AviChina Industry & Technology has 1 warning sign and it would be unwise to ignore this.

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.

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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.