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Shimao Property Holdings Limited (HKG:813) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of 813, it has a an impressive track record of performance and an optimistic future outlook not yet reflected in the share price. In the following section, I expand a bit more on these key aspects. If you’re interested in understanding beyond my broad commentary, read the full report on Shimao Property Holdings here.
High growth potential, good value and pays a dividend
One reason why investors are attracted to 813 is its notable earnings growth potential in the near future of 22%. This growth in the bottom-line is bolstered by an impressive top-line expansion of 68% over the same period, which is a sustainable driver of high-quality earnings, as opposed to pure cost-cutting activities. In the previous year, 813 has ramped up its bottom line by 13%, with its latest earnings level surpassing its average level over the last five years. Not only did 813 outperformed its past performance, its growth also exceeded the Real Estate industry expansion, which generated a 6.2% earnings growth. This is an notable feat for the company.
813’s shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts’ consensus forecast growth be correct. Compared to the rest of the market, 813 is also trading below other listed companies on the HK stock exchange, relative to earnings generated. This bolsters the proposition that 813’s price is currently discounted.
Next Steps:
For Shimao Property Holdings, I’ve put together three relevant aspects you should look at:
- Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
- Dividend Income vs Capital Gains: Does 813 return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from 813 as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 813? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.