Should You Investigate Shimao Group Holdings Limited (HKG:813) At HK$22.75?

Today we're going to take a look at the well-established Shimao Group Holdings Limited (HKG:813). The company's stock saw significant share price movement during recent months on the SEHK, rising to highs of HK$32.00 and falling to the lows of HK$22.55. 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 Shimao Group Holdings' current trading price of HK$22.75 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Shimao Group Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Shimao Group Holdings

What is Shimao Group Holdings worth?

According to my valuation model, Shimao Group Holdings seems to be fairly priced at around 3.8% below my intrinsic value, which means if you buy Shimao Group Holdings today, you’d be paying a reasonable price for it. And if you believe the company’s true value is HK$23.65, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, Shimao Group Holdings’s low beta implies that the stock is less volatile than the wider market.

What does the future of Shimao Group Holdings 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. With profit expected to grow by 89% over the next couple of years, the future seems bright for Shimao Group Holdings. 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? 813’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 813, now may not be the most optimal 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 further examining 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 Shimao Group Holdings, you'd also look into what risks it is currently facing. For instance, we've identified 4 warning signs for Shimao Group Holdings (1 shouldn't be ignored) you should be familiar with.

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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. 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.
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