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Wenzhou Kangning Hospital Co., Ltd. (HKG:2120) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of 2120, it is a financially-sound company with a great history and an optimistic future outlook. Below, I've touched on some key aspects you should know on a high level. If you're interested in understanding beyond my broad commentary, read the full report on Wenzhou Kangning Hospital here.

High growth potential with solid track record

Investors in search for stocks with room to flourish should look no further than 2120, with its expected earnings growth of 31%. Earnings growth is paired with an eye-catching top-line trajectory of 79%, which indicates a high-quality bottom-line expansion, as opposed to those driven simple by unsustainable cost-cutting activities. Over the past year, 2120 has grown its earnings by 64%, with its most recent figure exceeding its annual average over the past five years. In addition to beating its historical values, 2120 also outperformed its industry, which delivered a growth of 7.2%. This is an notable feat for the company.

2120's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This implies that 2120 manages its cash and cost levels well, which is an important determinant of the company’s health. 2120's has produced operating cash levels of 0.29x total debt over the past year, which implies that 2120's management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.

Next Steps:

For Wenzhou Kangning Hospital, I've put together three relevant factors you should further research:

1. Valuation: What is 2120 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 2120 is currently mispriced by the market.

2. Dividend Income vs Capital Gains: Does 2120 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 2120 as an investment.

3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 2120? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.