Hangzhou Silan Microelectronics Co.,Ltd (SHSE:600460), might not be a large cap stock, but it saw significant share price movement during recent months on the SHSE, rising to highs of CN¥23.26 and falling to the lows of CN¥16.64. 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 Hangzhou Silan MicroelectronicsLtd's current trading price of CN¥18.27 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let's take a look at Hangzhou Silan MicroelectronicsLtd's outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
What's The Opportunity In Hangzhou Silan MicroelectronicsLtd?
The stock seems fairly valued at the moment according to our valuation model. It's trading around 0.1% below our intrinsic value, which means if you buy Hangzhou Silan MicroelectronicsLtd today, you'd be paying a reasonable price for it. And if you believe the company's true value is CN¥18.29, then there isn't much room for the share price grow beyond what it's currently trading. Furthermore, Hangzhou Silan MicroelectronicsLtd's low beta implies that the stock is less volatile than the wider market.
What does the future of Hangzhou Silan MicroelectronicsLtd 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. In Hangzhou Silan MicroelectronicsLtd's case, its revenues over the next few years are expected to grow by 51%, indicating a highly optimistic future ahead. If expense does not increase by the same rate, or higher, this top line growth should lead to stronger cash flows, feeding into a higher share value.
What This Means For You
Are you a shareholder? 600460's optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven't considered today, such as the track record of its management team. 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 600460, now may not be the most advantageous 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.
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. At Simply Wall St, we found 2 warning signs for Hangzhou Silan MicroelectronicsLtd and we think they deserve your attention.
If you are no longer interested in Hangzhou Silan MicroelectronicsLtd, 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.