CIMC-TianDa Holdings Company Limited (HKG:445) Has Attractive Fundamentals

I’ve been keeping an eye on CIMC-TianDa Holdings Company Limited (HKG:445) because I’m attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe 445 has a lot to offer. Basically, it is a financially-robust company with a strong history and a buoyant growth outlook. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on CIMC-TianDa Holdings here.

Excellent balance sheet with reasonable growth potential

Investors in search of impressive top-line expansion should look no further than 445, with its expected 69% revenue growth in the upcoming year. This is expected to flow down into an impressive return on equity of 21% over the next couple of years. 445 delivered a bottom-line expansion of 92% in the prior year, with its most recent earnings level surpassing its average level over the last five years. Not only did 445 outperformed its past performance, its growth also exceeded the Machinery industry expansion, which generated a 13% earnings growth. This is an notable feat for the company.

SEHK:445 Past and Future Earnings, April 23rd 2019
SEHK:445 Past and Future Earnings, April 23rd 2019

445’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This indicates that 445 has sufficient cash flows and proper cash management in place, which is a key determinant of the company’s health. With a debt-to-equity ratio of 21%, 445’s debt level is acceptable. This means that 445’s capital structure strikes a good balance between low-cost debt funding and maintaining financial flexibility without overly restrictive terms of debt.

SEHK:445 Historical Debt, April 23rd 2019
SEHK:445 Historical Debt, April 23rd 2019

Next Steps:

For CIMC-TianDa Holdings, I’ve put together three relevant factors you should further examine:

  1. Valuation: What is 445 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether 445 is currently mispriced by the market.
  2. Dividend Income vs Capital Gains: Does 445 return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from 445 as an investment.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 445? 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.