What Is Sino-Ocean Group Holding Limited's (HKG:3377) Share Price Doing?

Sino-Ocean Group Holding Limited (HKG:3377), might not be a large cap stock, but it saw significant share price movement during recent months on the SEHK, rising to highs of HK$1.24 and falling to the lows of HK$0.98. 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 Sino-Ocean Group Holding's current trading price of HK$0.99 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Sino-Ocean Group Holding’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 Sino-Ocean Group Holding

What Is Sino-Ocean Group Holding Worth?

According to my price multiple model, which makes a comparison between the company's price-to-earnings ratio and the industry average, the stock price seems to be justfied. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Sino-Ocean Group Holding’s ratio of 10.41x is trading slightly above its industry peers’ ratio of 6.01x, which means if you buy Sino-Ocean Group Holding today, you’d be paying a relatively sensible price for it. And if you believe Sino-Ocean Group Holding should be trading in this range, then there isn’t really any room for the share price grow beyond the levels of other industry peers over the long-term. Is there another opportunity to buy low in the future? Since Sino-Ocean Group Holding’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

Can we expect growth from Sino-Ocean Group Holding?

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. With profit expected to more than double over the next couple of years, the future seems bright for Sino-Ocean Group Holding. 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? 3377’s optimistic future growth appears to have been factored into the current share price, with shares trading around industry price multiples. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at 3377? Will you have enough confidence to invest in the company should the price drop below the industry PE ratio?

Are you a potential investor? If you’ve been keeping tabs on 3377, now may not be the most optimal time to buy, given it is trading around industry price multiples. However, the optimistic forecast is encouraging for 3377, 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 Sino-Ocean Group Holding, you'd also look into what risks it is currently facing. Be aware that Sino-Ocean Group Holding is showing 2 warning signs in our investment analysis and 1 of those is concerning...

If you are no longer interested in Sino-Ocean Group Holding, 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.