At HK$82.20, Is Sunny Optical Technology (Group) Company Limited (HKG:2382) Worth Looking At Closely?

Today we're going to take a look at the well-established Sunny Optical Technology (Group) Company Limited (HKG:2382). The company's stock saw a decent share price growth in the teens level on the SEHK over the last few months. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Sunny Optical Technology (Group)’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Sunny Optical Technology (Group)

Is Sunny Optical Technology (Group) Still Cheap?

According to my valuation model, Sunny Optical Technology (Group) seems to be fairly priced at around 17% below my intrinsic value, which means if you buy Sunny Optical Technology (Group) today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth HK$99.12, then there isn’t much 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 Sunny Optical Technology (Group)’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.

Can we expect growth from Sunny Optical Technology (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. 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. Sunny Optical Technology (Group)'s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? 2382’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 financial strength of the company. 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 2382, 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'd like to know more about Sunny Optical Technology (Group) as a business, it's important to be aware of any risks it's facing. While conducting our analysis, we found that Sunny Optical Technology (Group) has 1 warning sign and it would be unwise to ignore it.

If you are no longer interested in Sunny Optical Technology (Group), you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.