Kingboard Laminates Holdings Limited (HKG:1888), is not the largest company out there, but it saw significant share price movement during recent months on the SEHK, rising to highs of HK$14.40 and falling to the lows of HK$6.93. 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 Kingboard Laminates Holdings' current trading price of HK$7.36 reflective of the actual value of the mid-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let's take a look at Kingboard Laminates Holdings's outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Kingboard Laminates Holdings

Is Kingboard Laminates Holdings Still Cheap?

The share price seems sensible at the moment according to my price multiple model, where I compare 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 Kingboard Laminates Holdings's ratio of 3.39x is trading slightly below its industry peers' ratio of 6.76x, which means if you buy Kingboard Laminates Holdings today, you'd be paying a decent price for it. And if you believe Kingboard Laminates Holdings should be trading in this range, then there isn't much room for the share price to grow beyond the levels of other industry peers over the long-term. In addition to this, it seems like Kingboard Laminates Holdings's share price is quite stable, which could mean there may be less chances to buy low in the future now that it's trading around the price multiples of other industry peers. This is because the stock is less volatile than the wider market given its low beta.

What does the future of Kingboard Laminates Holdings 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. However, with an extremely negative double-digit change in profit expected over the next couple of years, near-term growth is certainly not a driver of a buy decision. It seems like high uncertainty is on the cards for Kingboard Laminates Holdings, at least in the near future.

What This Means For You

Are you a shareholder? 1888 seems priced close to industry peers right now, but given the uncertainty from negative returns in the future, this could be the right time to de-risk your portfolio. Is your current exposure to the stock optimal for your total portfolio? And is the opportunity cost of holding a negative-outlook stock too high? Before you make a decision on 1888, take a look at whether its fundamentals have changed.

Are you a potential investor? If you've been keeping an eye on 1888 for a while, now may not be the most advantageous time to buy, given it is trading around industry price multiples. This means there's less benefit from mispricing. Furthermore, the negative growth outlook increases the risk of holding the stock. However, there are also other important factors we haven't considered today, which can help gel your views on 1888 should the price fluctuate below the industry PE ratio.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. For instance, we've identified 2 warning signs for Kingboard Laminates Holdings (1 shouldn't be ignored) you should be familiar with.

If you are no longer interested in Kingboard Laminates 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.