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Guotai Junan International Holdings Limited (HKG:1788), which is in the capital markets business, and is based in Hong Kong, saw significant share price movement during recent months on the SEHK, rising to highs of HK$1.49 and falling to the lows of HK$1.17. 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 Guotai Junan International Holdings's current trading price of HK$1.17 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 Guotai Junan International Holdings’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for Guotai Junan International Holdings
What's the opportunity in Guotai Junan International Holdings?
Good news, investors! Guotai Junan International Holdings is still a bargain right now. My valuation model shows that the intrinsic value for the stock is HK$1.53, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. However, given that Guotai Junan International Holdings’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
What kind of growth will Guotai Junan International Holdings generate?
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. 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. With profit expected to grow by 27% over the next year, the near-term future seems bright for Guotai Junan International Holdings. 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 1788 is currently undervalued, it may be a great time to increase 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 financial health to consider, which could explain the current undervaluation.