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-sound company with a strong track record and a excellent future outlook. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Yihai International Holding here.
Exceptional growth potential with flawless balance sheet
One reason why investors are attracted to 1579 is its notable earnings growth potential in the near future of 32%. The optimistic bottom-line growth is supported by an outstanding revenue growth of 87% over the same time period, which indicates that earnings is driven by top-line activity rather than purely unsustainable cost-reduction initiatives. Over the past year, 1579 has grown its earnings by 61%, with its most recent figure exceeding its annual average over the past five years. This illustrates a strong track record, leading to a satisfying return on equity of 30%. 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 suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. Investors should not worry about 1579’s debt levels because the company has none! This means it is running its business only on equity capital funding, which is rather impressive for a HK$46b market cap company. Investors’ risk associated with debt is virtually non-existent and the company has plenty of headroom to grow debt in the future, should the need arise.
Next Steps:
For Yihai International Holding, I've put together three pertinent 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!
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.