China SCE Group Holdings Limited (HKG:1966), might not be a large cap stock, but it received a lot of attention from a substantial price movement on the SEHK over the last few months, increasing to HK$1.69 at one point, and dropping to the lows of HK$1.06. 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 SCE Group Holdings' current trading price of HK$1.08 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 SCE Group Holdings'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 SCE Group Holdings

What's the opportunity in China SCE Group Holdings?

Good news, investors! China SCE Group Holdings is still a bargain right now according to my price multiple model, which compares the company's price-to-earnings ratio to the industry average. In this instance, I've used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock's cash flows. I find that China SCE Group Holdings's ratio of 1.28x is below its peer average of 6.43x, which indicates the stock is trading at a lower price compared to the Real Estate industry. Another thing to keep in mind is that China SCE Group Holdings's share price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you believe the current share price should move towards its industry peers, a low beta could suggest it is not likely to reach that level anytime soon, and once it's there, it may be hard to fall back down into an attractive buying range again.

Can we expect growth from China SCE Group Holdings?

Future outlook is an important aspect when you're looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it's the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Though in the case of China SCE Group Holdings, it is expected to deliver a relatively unexciting earnings growth of 4.5%, which doesn't help build up its investment thesis. Growth doesn't appear to be a main reason for a buy decision for the company, at least in the near term.

What this means for you:

Are you a shareholder? Even though growth is relatively muted, since 1966 is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you've been keeping an eye on 1966 for a while, now might be the time to make a leap. Its future profit outlook isn't fully reflected in the current share price yet, which means it's not too late to buy 1966. 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.

If you want to dive deeper into China SCE Group Holdings, you'd also look into what risks it is currently facing. To that end, you should learn about the 4 warning signs we've spotted with China SCE Group Holdings (including 1 which doesn't sit too well with us).

If you are no longer interested in China SCE Group Holdings, 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.