Should You Think About Buying Grand Baoxin Auto Group Limited (HKG:1293) Now?

Grand Baoxin Auto Group Limited (HKG:1293), 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$0.28 at one point, and dropping to the lows of HK$0.12. 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 Grand Baoxin Auto Group's current trading price of HK$0.12 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 Grand Baoxin Auto Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

View our latest analysis for Grand Baoxin Auto Group

Is Grand Baoxin Auto Group Still Cheap?

Good news, investors! Grand Baoxin Auto Group is still a bargain right now according to our price multiple model, which compares the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that Grand Baoxin Auto Group’s ratio of 2.59x is below its peer average of 8.63x, which indicates the stock is trading at a lower price compared to the Specialty Retail industry. Another thing to keep in mind is that Grand Baoxin Auto Group’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its industry peers, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.

Can we expect growth from Grand Baoxin Auto Group?

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. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to more than double over the next couple of years, the future seems bright for Grand Baoxin Auto Group. 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? Since 1293 is currently trading below the industry PE ratio, it may be a great time to accumulate more of your holdings in the stock. With a positive profit outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on 1293 for a while, now might be the time to make a leap. Its prosperous future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 1293. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed assessment.

If you want to dive deeper into Grand Baoxin Auto Group, you'd also look into what risks it is currently facing. For example, we've found that Grand Baoxin Auto Group has 4 warning signs (1 can't be ignored!) that deserve your attention before going any further with your analysis.

If you are no longer interested in Grand Baoxin Auto Group, 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.