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Shenzhen Expressway Company Limited (HKG:548), which is in the infrastructure business, and is based in China, received a lot of attention from a substantial price movement on the SEHK over the last few months, increasing to HK$7.86 at one point, and dropping to the lows of HK$6.77. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Shenzhen Expressway’s current trading price of HK$7.19 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 Shenzhen Expressway’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Shenzhen Expressway
What’s the opportunity in Shenzhen Expressway?
Good news, investors! Shenzhen Expressway is still a bargain right now. According to my valuation, the intrinsic value for the stock is HK$10.73, but it is currently trading at CN¥7.19 on the share market, meaning that there is still an opportunity to buy now. Shenzhen Expressway’s share price also seems relatively stable compared to the rest of the market, as indicated by its low beta. If you believe the share price should eventually reach its true value, a low beta could suggest it is unlikely to rapidly do so anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range.
What does the future of Shenzhen Expressway look like?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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. With profit expected to grow by 36% over the next couple of years, the future seems bright for Shenzhen Expressway. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? Since 548 is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive 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 548 for a while, now might be the time to enter the stock. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 548. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.