While Shangri-La Asia Limited (HKG:69) might not have the largest market cap around , it saw significant share price movement during recent months on the SEHK, rising to highs of HK$5.49 and falling to the lows of HK$4.75. 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 Shangri-La Asia's current trading price of HK$4.96 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 Shangri-La Asia'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 Shangri-La Asia
Is Shangri-La Asia Still Cheap?
According to our valuation model, Shangri-La Asia seems to be fairly priced at around 3.64% above our intrinsic value, which means if you buy Shangri-La Asia today, you'd be paying a relatively reasonable price for it. And if you believe the company's true value is HK$4.79, there's only an insignificant downside when the price falls to its real value. Furthermore, Shangri-La Asia's low beta implies that the stock is less volatile than the wider market.
Can we expect growth from Shangri-La Asia?
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. 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 profit expected to more than double over the next couple of years, the future seems bright for Shangri-La Asia. 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? It seems like the market has already priced in 69's positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven't considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you've been keeping an eye on 69, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it's worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
If you want to dive deeper into Shangri-La Asia, you'd also look into what risks it is currently facing. When we did our research, we found 2 warning signs for Shangri-La Asia (1 makes us a bit uncomfortable!) that we believe deserve your full attention.
If you are no longer interested in Shangri-La Asia, 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.