Harbin Dongan Auto Engine Co.,Ltd (SHSE:600178), is not the largest company out there, but it received a lot of attention from a substantial price increase on the SHSE over the last few months. While good news for shareholders, the company has traded much higher in the past year. As a small cap stock, hardly covered by any analysts, there is generally more of an opportunity for mispricing as there is less activity to push the stock closer to fair value. Is there still an opportunity here to buy? Let's take a look at Harbin Dongan Auto EngineLtd's outlook and value based on the most recent financial data to see if the opportunity still exists.
What Is Harbin Dongan Auto EngineLtd Worth?
Good news, investors! Harbin Dongan Auto EngineLtd is still a bargain right now. According to our valuation, the intrinsic value for the stock is CN¥18.49, but it is currently trading at CN¥13.01 on the share market, meaning that there is still an opportunity to buy now. What's more interesting is that, Harbin Dongan Auto EngineLtd's share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from Harbin Dongan Auto EngineLtd?
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. In Harbin Dongan Auto EngineLtd's case, its revenues over the next few years are expected to grow by 68%, 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? Since 600178 is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you've been keeping an eye on 600178 for a while, now might be the time to make a leap. Its prosperous future outlook isn't fully reflected in the current share price yet, which means it's not too late to buy 600178. 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.
It can be quite valuable to consider what analysts expect for Harbin Dongan Auto EngineLtd from their most recent forecasts. At Simply Wall St, we have the analysts estimates which you can view by clicking here.
If you are no longer interested in Harbin Dongan Auto EngineLtd, 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.