Qinghai Salt Lake Industry Co.,Ltd (SZSE:000792) saw a significant share price rise of 24% in the past couple of months on the SZSE. While good news for shareholders, the company has traded much higher in the past year. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company's outlook is already priced into the stock. However, what if the stock is still a bargain? Today we will analyse the most recent data on Qinghai Salt Lake IndustryLtd's outlook and valuation to see if the opportunity still exists.
What Is Qinghai Salt Lake IndustryLtd Worth?
Great news for investors – Qinghai Salt Lake IndustryLtd is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. In this instance, we've used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock's cash flows. we find that Qinghai Salt Lake IndustryLtd's ratio of 10.02x is below its peer average of 29.37x, which indicates the stock is trading at a lower price compared to the Chemicals industry. Another thing to keep in mind is that Qinghai Salt Lake IndustryLtd'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.
What does the future of Qinghai Salt Lake IndustryLtd 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 a relatively muted profit growth of 9.2% expected over the next couple of years, growth doesn't seem like a key driver for a buy decision for Qinghai Salt Lake IndustryLtd, at least in the short term.
What This Means For You
Are you a shareholder? Even though growth is relatively muted, since 000792 is currently trading below the industry PE ratio, it may be a great time to accumulate more of 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 000792 for a while, now might be the time to enter the stock. Its future profit outlook isn't fully reflected in the current share price yet, which means it's not too late to buy 000792. 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 assessment.
Diving deeper into the forecasts for Qinghai Salt Lake IndustryLtd mentioned earlier will help you understand how analysts view the stock going forward. Luckily, you can check out what analysts are forecasting by clicking here.
If you are no longer interested in Qinghai Salt Lake IndustryLtd, 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.