Should You Invest In The Real Estate Sector And China Yuanbang Property Holdings Limited (SGX:BCD)?

China Yuanbang Property Holdings Limited (SGX:BCD), a S$15.27M small-cap, is a real estate company operating in an industry which remains the single largest sector globally, and has continued to play a key role in investor portfolios as an asset class. Real estate assets usually exhibit distinct and desirable investment features compared to other types of securities, in particular, over a long period of time. Real estate analysts are forecasting for the entire industry, negative growth in the upcoming year . Is the real estate industry an attractive sector-play right now? Today, I will analyse the industry outlook, and also determine whether China Yuanbang Property Holdings is a laggard or leader relative to its real estate sector peers. View our latest analysis for China Yuanbang Property Holdings

What’s the catalyst for China Yuanbang Property Holdings's sector growth?

Not every category of real estate is likely to be impacted the same by macroeconomic factors such as interest rate hikes, and not all locations are primed to grow. So, investors must remain cautiously optimistic and analyse the fundamentals of the underlying industry. Over the past year, the industry saw growth of 6.88%, though still underperforming the wider Singapore stock market. China Yuanbang Property Holdings leads the pack with its impressive earnings growth of 14.27% over the past year. This proven growth may make China Yuanbang Property Holdings a more expensive stock relative to its peers.

Is China Yuanbang Property Holdings and the sector relatively cheap?

The real estate sector's PE is currently hovering around 12.44x, in-line with the Singapore stock market PE of 14.15x. This means the industry, on average, is fairly valued compared to the wider market – minimal expected gains and losses from mispricing here. Furthermore, the industry returned a similar 6.66% on equities compared to the market’s 7.99%. Since China Yuanbang Property Holdings’s earnings doesn’t seem to reflect its true value, its PE ratio isn’t very useful. A loose alternative to gauge China Yuanbang Property Holdings’s value is to assume the stock should be relatively in-line with its industry.

Next Steps:

China Yuanbang Property Holdings recently delivered an industry-beating growth rate in earnings, which is a positive for shareholders. If the stock has been on your watchlist for a while, now may be the time to buy, if you like its ability to deliver growth and are not highly concentrated in the real estate industry. However, before you make a decision on the stock, I suggest you look at China Yuanbang Property Holdings's fundamentals in order to build a holistic investment thesis.

• 1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
• 2. Historical Track Record: What has BCD's performance been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
• 3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of China Yuanbang Property Holdings? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

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Simply Wall St analyst Simply Wall St and Simply Wall St have no position in any of the companies mentioned. This article 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.