At HK$22.40, Is Henderson Land Development Company Limited (HKG:12) Worth Looking At Closely?

Let's talk about the popular Henderson Land Development Company Limited (HKG:12). The company's shares saw a decent share price growth of 10% on the SEHK over the last few months. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Today we will analyse the most recent data on Henderson Land Development’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Henderson Land Development

Is Henderson Land Development Still Cheap?

According to our valuation model, Henderson Land Development seems to be fairly priced at around 14.55% above our intrinsic value, which means if you buy Henderson Land Development today, you’d be paying a relatively reasonable price for it. And if you believe that the stock is really worth HK$19.55, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that Henderson Land Development’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 an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of Henderson Land Development look like?

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. Henderson Land Development'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? It seems like the market has already priced in 12’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 track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on 12, now may not be the most advantageous 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 diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

If you want to dive deeper into Henderson Land Development, you'd also look into what risks it is currently facing. You'd be interested to know, that we found 1 warning sign for Henderson Land Development and you'll want to know about it.

If you are no longer interested in Henderson Land Development, 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.