Why Sunny Optical Technology (Group) Company Limited (HKG:2382) Could Be Worth Watching

Today we're going to take a look at the well-established Sunny Optical Technology (Group) Company Limited (HKG:2382). The company's stock led the SEHK gainers with a relatively large price hike in the past couple of weeks. 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? Let’s examine Sunny Optical Technology (Group)’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

See our latest analysis for Sunny Optical Technology (Group)

What Is Sunny Optical Technology (Group) Worth?

According to my valuation model, Sunny Optical Technology (Group) seems to be fairly priced at around 7.91% above my 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 the company’s true value is HK$86.05, there’s only an insignificant downside when the price falls to its real value. Is there another opportunity to buy low in the future? Since Sunny Optical Technology (Group)’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What does the future of Sunny Optical Technology (Group) look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. 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 increase by 34%, indicating a highly optimistic future ahead. This should lead to more 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 2382’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 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 an eye on 2382, 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

It can be quite valuable to consider what analysts expect for Sunny Optical Technology (Group) from their most recent forecasts. So feel free to check out our free graph representing analyst forecasts.

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.