Sichuan Yahua Industrial Group Co., Ltd. (SZSE:002497), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the SZSE over the last few months, increasing to CN¥11.53 at one point, and dropping to the lows of CN¥9.20. 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 Sichuan Yahua Industrial Group's current trading price of CN¥9.20 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 Sichuan Yahua Industrial Group's outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Is Sichuan Yahua Industrial Group Still Cheap?

Good news, investors! Sichuan Yahua Industrial Group is still a bargain right now. Our valuation model shows that the intrinsic value for the stock is CN¥13.23, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What's more interesting is that, Sichuan Yahua Industrial Group's share price is theoretically quite stable, which could mean two things: firstly, it may take the share price a while to move to its intrinsic value, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because the stock is less volatile than the wider market given its low beta.

What does the future of Sichuan Yahua Industrial Group look like?

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 Sichuan Yahua Industrial Group, it is expected to deliver a negative revenue growth of -3.9% over the next couple of years, which doesn't help build up its investment thesis. It appears that risk of future uncertainty is high, at least in the near term.

What This Means For You

Are you a shareholder? Although 002497 is currently undervalued, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to 002497, or whether diversifying into another stock may be a better move for your total risk and return.

Are you a potential investor? If you've been keeping tabs on 002497 for some time, but hesitant on making the leap, we recommend you dig deeper into the stock. Given its current undervaluation, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.

Diving deeper into the forecasts for Sichuan Yahua Industrial Group mentioned earlier will help you understand how analysts view the stock going forward. At Simply Wall St, we have the analysts estimates which you can view by clicking here.

If you are no longer interested in Sichuan Yahua Industrial 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