Mapletree Greater China Commercial Trust (SGX:RW0U), a reits company based in Singapore, received a lot of attention from a substantial price movement on the SGX in the over the last few months, increasing to SGD1.28 at one point, and dropping to the lows of SGD1.14. 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 Mapletree Greater China Commercial Trust’s current trading price of SGD1.15 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 Mapletree Greater China Commercial Trust’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 Mapletree Greater China Commercial Trust
What is Mapletree Greater China Commercial Trust worth?
Great news for investors – Mapletree Greater China Commercial Trust is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is SGD1.79, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. Another thing to keep in mind is that Mapletree Greater China Commercial Trust’s share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its intrinsic value over time, a low beta could suggest it is not likely to reach that level anytime soon, and once it’s there, it may be hard to fall back down into an attractive buying range again.
What kind of growth will Mapletree Greater China Commercial Trust generate?
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 Mapletree Greater China Commercial Trust, it is expected to deliver a highly negative earnings growth in the next few 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 RW0U 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 RW0U, or whether diversifying into another stock may be a better move for your total risk and return.