Why China Travel International Investment Hong Kong Limited (HKG:308) Could Be Worth Watching

While China Travel International Investment Hong Kong Limited (HKG:308) might not be the most widely known stock at the moment, it saw a significant share price rise of over 20% in the past couple of months on the SEHK. Less-covered, small caps sees more of an opportunity for mispricing due to the lack of information available to the public, which can be a good thing. So, could the stock still be trading at a low price relative to its actual value? Let’s examine China Travel International Investment Hong Kong’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

View our latest analysis for China Travel International Investment Hong Kong

Is China Travel International Investment Hong Kong still cheap?

Great news for investors – China Travel International Investment Hong Kong is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is HK$2.37, but it is currently trading at HK$1.47 on the share market, meaning that there is still an opportunity to buy now. However, given that China Travel International Investment Hong Kong’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from China Travel International Investment Hong Kong?

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. Though in the case of China Travel International Investment Hong Kong, it is expected to deliver a highly negative earnings growth in the upcoming, which doesn’t help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What this means for you:

Are you a shareholder? Although 308 is currently undervalued, the negative outlook does bring on some uncertainty, which equates to higher risk. Consider whether you want to increase your portfolio exposure to 308, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you’ve been keeping tabs on 308 for some time, but hesitant on making the leap, I recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

If you'd like to know more about China Travel International Investment Hong Kong as a business, it's important to be aware of any risks it's facing. Case in point: We've spotted 2 warning signs for China Travel International Investment Hong Kong you should be aware of.

If you are no longer interested in China Travel International Investment Hong Kong, 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.