Is Chin-Poon Industrial Co., Ltd. (TWSE:2355) Potentially Undervalued?

While Chin-Poon Industrial Co., Ltd. (TWSE:2355) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the TWSE over the last few months, increasing to NT$39.80 at one point, and dropping to the lows of NT$32.15. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Chin-Poon Industrial's current trading price of NT$32.15 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Chin-Poon Industrial’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

What Is Chin-Poon Industrial Worth?

Good news, investors! Chin-Poon Industrial is still a bargain right now according to our price multiple model, which compares the company's price-to-earnings ratio to the industry average. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that Chin-Poon Industrial’s ratio of 11.29x is below its peer average of 19.76x, which indicates the stock is trading at a lower price compared to the Electronic industry. Although, there may be another chance to buy again in the future. This is because Chin-Poon Industrial’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Check out our latest analysis for Chin-Poon Industrial

What kind of growth will Chin-Poon Industrial generate?

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. Though in the case of Chin-Poon Industrial, it is expected to deliver a relatively unexciting earnings growth of 6.5%, which doesn’t help build up its investment thesis. Growth doesn’t appear to be a main reason for a buy decision for Chin-Poon Industrial, at least in the near term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since 2355 is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on 2355 for a while, now might be the time to make a leap. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 2355. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed investment decision.

In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. For example, we've discovered 1 warning sign that you should run your eye over to get a better picture of Chin-Poon Industrial.

If you are no longer interested in Chin-Poon Industrial, 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.