What Is Hysan Development Company Limited's (HKG:14) Share Price Doing?

Hysan Development Company Limited (HKG:14), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the SEHK over the last few months, increasing to HK$27.25 at one point, and dropping to the lows of HK$21.70. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Hysan Development's current trading price of HK$22.60 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Hysan Development’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for Hysan Development

Is Hysan Development Still Cheap?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 13.72% above my intrinsic value, which means if you buy Hysan Development today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is HK$19.87, then there isn’t really any room for the share price grow beyond what it’s currently trading. What's more, Hysan Development’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will Hysan Development generate?

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 revenues expected to grow by a double-digit 21% over the next couple of years, the outlook is positive for Hysan Development. If the level of expenses is able to be maintained, 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? 14’s optimistic future growth appears to have been factored into the current share price, 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 14, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the positive outlook 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.

So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Hysan Development.

If you are no longer interested in Hysan 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.