At HK$2.10, Is China Datang Corporation Renewable Power Co., Limited (HKG:1798) Worth Looking At Closely?

China Datang Corporation Renewable Power Co., Limited (HKG:1798), might not be a large cap stock, but it saw a decent share price growth in the teens level on the SEHK over the last few months. With many analysts covering the stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at China Datang Corporation Renewable Power’s outlook and value based on the most recent financial data to see if the opportunity still exists.

Check out our latest analysis for China Datang Corporation Renewable Power

What's The Opportunity In China Datang Corporation Renewable Power?

According to my valuation model, the stock is currently overvalued by about 33%, trading at HK$2.10 compared to my intrinsic value of HK$1.58. This means that the buying opportunity has probably disappeared for now. Another thing to keep in mind is that China Datang Corporation Renewable Power’s share price is quite stable relative to the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, 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 China Datang Corporation Renewable Power?

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 Datang Corporation Renewable Power'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? 1798’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. At this current price, shareholders may be asking a different question – should I sell? If you believe 1798 should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

Are you a potential investor? If you’ve been keeping tabs on 1798 for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for 1798, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

If you'd like to know more about China Datang Corporation Renewable Power as a business, it's important to be aware of any risks it's facing. Our analysis shows 2 warning signs for China Datang Corporation Renewable Power (1 can't be ignored!) and we strongly recommend you look at these before investing.

If you are no longer interested in China Datang Corporation Renewable Power, 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.