Is China State Construction International Holdings Limited (HKG:3311) Potentially Undervalued?

China State Construction International Holdings Limited (HKG:3311), is not the largest company out there, but it saw a double-digit share price rise of over 10% in the past couple of months on the SEHK. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s examine China State Construction International Holdings’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for China State Construction International Holdings

What is China State Construction International Holdings worth?

According to my valuation model, China State Construction International Holdings seems to be fairly priced at around 11.70% above my intrinsic value, which means if you buy China State Construction International Holdings today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is HK$8.64, there’s only an insignificant downside when the price falls to its real value. In addition to this, China State Construction International Holdings has a low beta, which suggests its share price is less volatile than the wider market.

What does the future of China State Construction 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 50% over the next couple of years, the future seems bright for China State Construction 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 already priced in 3311’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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on 3311, 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.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. Be aware that China State Construction International Holdings is showing 2 warning signs in our investment analysis and 1 of those shouldn't be ignored...

If you are no longer interested in China State Construction International Holdings, 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.