While China Harmony Auto Holding Limited (HKG:3836) might not be the most widely known stock at the moment, it saw significant share price movement during recent months on the SEHK, rising to highs of HK$3.56 and falling to the lows of HK$2.07. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether China Harmony Auto Holding's current trading price of HK$2.11 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let's take a look at China Harmony Auto Holding's outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

See our latest analysis for China Harmony Auto Holding

What's The Opportunity In China Harmony Auto Holding?

Great news for investors – China Harmony Auto Holding is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is HK$3.49, but it is currently trading at HK$2.11 on the share market, meaning that there is still an opportunity to buy now. However, given that China Harmony Auto Holding's share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

What does the future of China Harmony Auto Holding look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let's also take a look at the company's future expectations. With revenues expected to grow by 38% over the next couple of years, the future seems bright for China Harmony Auto Holding. If the level of expenses is able to be maintained, it looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? Since 3836 is currently undervalued, it may be a great time to accumulate more of your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as financial health to consider, which could explain the current undervaluation.

Are you a potential investor? If you've been keeping an eye on 3836 for a while, now might be the time to make a leap. Its prosperous future outlook isn't fully reflected in the current share price yet, which means it's not too late to buy 3836. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed investment decision.

So while earnings quality is important, it's equally important to consider the risks facing China Harmony Auto Holding at this point in time. While conducting our analysis, we found that China Harmony Auto Holding has 1 warning sign and it would be unwise to ignore it.

If you are no longer interested in China Harmony Auto Holding, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.