Yahoo Finance Is China Construction Bank Corporation (HKG:939) Potentially Undervalued?
Today we’re going to take a look at the well-established China Construction Bank Corporation (HKG:939). The company’s stock saw significant share price volatility over the past couple of months on the SEHK, rising to the highs of HK$7.12 and falling to the lows of HK$6.07. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether China Construction Bank’s current trading price of HK$6.58 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at China Construction Bank’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 Construction Bank
What’s the opportunity in China Construction Bank?
Great news for investors – China Construction Bank is still trading at a fairly cheap price. According to my valuation, the intrinsic value for the stock is HK$12.94, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, China Construction Bank’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from China Construction Bank?
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. China Construction Bank’s earnings over the next few years are expected to increase by 21%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? Since 939 is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic 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 capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on 939 for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy 939. 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 buy.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on China Construction Bank. You can find everything you need to know about China Construction Bank in the latest infographic research report. If you are no longer interested in China Construction Bank, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
