In This Article:
Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Yihai International Holding Ltd (HKG:1579) due to its excellent fundamentals in more than one area. 1579 is a financially-healthy company with an impressive history and an optimistic future outlook. In the following section, I expand a bit more on these key aspects. If you’re interested in understanding beyond my high-level commentary, read the full report on Yihai International Holding here.
Exceptional growth potential with flawless balance sheet
Bullish market analysts are forecasting fast-growing 1579 to deliver an exceptional triple-digit sales growth rate over the next year. This is expected to flow down into an impressive return on equity of 28% over the next couple of years. 1579 delivered a bottom-line expansion of 69% in the prior year, with its most recent earnings level surpassing its average level over the last five years. This illustrates a strong track record, leading to a satisfying return on equity of 23%. which is an optimistic signal for the future.
1579’s ability to maintain an adequate level of cash to meet upcoming liabilities is a good sign for its financial health. This indicates that 1579 has sufficient cash flows and proper cash management in place, which is an important determinant of the company’s health. 1579 currently has no debt on its balance sheet. This means it is running its business only on equity capital funding, which is rather impressive for a HK$18.0b market cap company. 1579 has plenty of financial flexibility, without debt obligations to meet in the short term, as well as the headroom to raise debt should it need to in the future.
Next Steps:
For Yihai International Holding, I’ve put together three key aspects you should look at:
-
Valuation: What is 1579 worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether 1579 is currently mispriced by the market.
-
Dividend Income vs Capital Gains: Does 1579 return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from 1579 as an investment.
-
Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 1579? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.