China Energy Engineering Corporation Limited (HKG:3996) Has Attractive Fundamentals

I've been keeping an eye on China Energy Engineering Corporation Limited (HKG:3996) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe 3996 has a lot to offer. Basically, it is a company that has been able to sustain great financial health, trading at an attractive share price. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on China Energy Engineering here.

Very undervalued with adequate balance sheet

3996's ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This implies that 3996 manages its cash and cost levels well, which is a crucial insight into the health of the company. 3996’s earnings amply cover its interest expense. Paying interest on time and in full can help the company get favourable debt terms in the future, leading to lower cost of debt and helps 3996 expand. 3996's shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of 3996's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Compared to the rest of the capital goods industry, 3996 is also trading below its peers, relative to earnings generated. This further reaffirms that 3996 is potentially undervalued.

Next Steps:

For China Energy Engineering, I've put together three essential aspects you should further examine:

1. Future Outlook: What are well-informed industry analysts predicting for 3996’s future growth? Take a look at our free research report of analyst consensus for 3996’s outlook.
2. Historical Performance: What has 3996's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 3996? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.