What Is Sunny Optical Technology (Group) Company Limited's (HKG:2382) Share Price Doing?

Sunny Optical Technology (Group) Company Limited (HKG:2382), might not be a large cap stock, but it saw a significant share price rise of 41% in the past couple of months on the SEHK. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s take a look at Sunny Optical Technology (Group)’s outlook and value based on the most recent financial data to see if the opportunity still exists.

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

What's The Opportunity In Sunny Optical Technology (Group)?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 6.63% above our intrinsic value, which means if you buy Sunny Optical Technology (Group) today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth HK$45.67, there’s only an insignificant downside when the price falls to its real value. In addition to this, Sunny Optical Technology (Group) has a low beta, which suggests its share price is less volatile than the wider market.

What kind of growth will Sunny Optical Technology (Group) generate?

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. 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 conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping tabs on 2382, now may not be the most advantageous 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.

Keep in mind, when it comes to analysing a stock it's worth noting the risks involved. While conducting our analysis, we found that Sunny Optical Technology (Group) has 1 warning sign and it would be unwise to ignore this.

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.

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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.

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