Is Now The Time To Look At Buying China Yongda Automobiles Services Holdings Limited (HKG:3669)?

China Yongda Automobiles Services Holdings Limited (HKG:3669), 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$7.38 and falling to the lows of HK$5.02. 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 China Yongda Automobiles Services Holdings' current trading price of HK$5.40 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 China Yongda Automobiles Services Holdings’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 China Yongda Automobiles Services Holdings

What Is China Yongda Automobiles Services Holdings Worth?

According to my valuation model, China Yongda Automobiles Services Holdings seems to be fairly priced at around 5.05% above my intrinsic value, which means if you buy China Yongda Automobiles Services Holdings today, you’d be paying a relatively fair price for it. And if you believe the company’s true value is HK$5.14, then there isn’t really any room for the share price grow beyond what it’s currently trading. So, is there another chance to buy low in the future? Given that China Yongda Automobiles Services Holdings’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will China Yongda Automobiles Services Holdings generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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. China Yongda Automobiles Services Holdings' earnings growth are expected to be in the teens in the upcoming years, indicating a solid future ahead. This should lead to robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in 3669’s positive outlook, 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 tabs on 3669, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect 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.

If you want to dive deeper into China Yongda Automobiles Services Holdings, you'd also look into what risks it is currently facing. You'd be interested to know, that we found 1 warning sign for China Yongda Automobiles Services Holdings and you'll want to know about it.

If you are no longer interested in China Yongda Automobiles Services Holdings, 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.