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Building up an investment case requires looking at a stock holistically. Today I’ve chosen to put the spotlight on Tang Palace (China) Holdings Limited (HKG:1181) due to its excellent fundamentals in more than one area. 1181 is a company with great financial health as well as a a strong track record of performance. In the following section, I expand a bit more on these key aspects. If you’re interested in understanding beyond my broad commentary, read the full report on Tang Palace (China) Holdings here.

Excellent balance sheet with proven track record

1181 has a strong track record of performance. In the previous year, 1181 delivered an impressive double-digit return of 26% Unsurprisingly, 1181 surpassed the Hospitality industry return of 6.9%, which gives us more confidence of the company’s capacity to drive earnings going forward. 1181 is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is a crucial insight into the health of the company. 1181’s has produced operating cash levels of 3x total debt over the past year, which implies that 1181’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.

Next Steps:

For Tang Palace (China) Holdings, I’ve compiled three pertinent factors you should further examine:

1. Future Outlook: What are well-informed industry analysts predicting for 1181’s future growth? Take a look at our free research report of analyst consensus for 1181’s outlook.

2. Valuation: What is 1181 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 1181 is currently mispriced by the market.

3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 1181? 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.