China Tourism Group Duty Free Enterprise Co., Ltd. (SHSE:601888) has attracted a lot of attention over the past few months as it has experienced significant price fluctuations on the SHSE, rising to as high as CN¥89.68 at one point before falling to a low of CN¥70.47. Some share price fluctuations may give investors a better opportunity to enter the stock and buy at a cheaper price. The question to answer is whether China Tourism Group Duty Free Enterprise’s current trading price of CN¥73.41 reflects the actual value of the large cap; or is it currently undervalued, offering a buying opportunity? Let’s take a look at the outlook and value of China Tourism Group Duty Free Enterprise based on the most recent financial data to see if there are any catalysts for price movement.
Check out our latest analysis for China Tourism Group Duty Free
How much is China Tourism Group Duty Free worth?
According to our valuation model, the stock appears to be fairly valued at the moment. It is trading at about 1.2% below its intrinsic value. This means that if you buy China Tourism Group Duty Free today, you would pay a fair price. And if you believe the stock is actually worth CN¥74.28, there isn’t much to gain from mispricing. Is there another opportunity to buy lower in the future? China Tourism Group Duty Free’s share price is very volatile, so it could fall further (or rise) in the future, creating another buying opportunity. This is based on its high beta, which is a good indicator of how volatile a stock is relative to the overall market.
How will China Tourism Group Duty Free grow?
Growth investors in their portfolio may want to consider the prospects of a company before buying its shares. While value investors would argue that it’s the intrinsic value relative to the price that matters most, a more compelling investment argument is high growth potential at a low price. With earnings expected to grow 45% over the next few years, the future looks bright for China Tourism Group Duty Free. The stock is expected to generate higher cash flows, which should feed into an increased valuation.
What this means for you
Are you a shareholder? 601888’s optimistic future growth seems to be priced into the current share price, with the stock trading around its fair value. However, there are other important factors we haven’t considered today, such as management’s track record. Have these factors changed since the last time you looked at this stock? Would you have enough conviction to buy if the price fluctuates below its true value?
Are you a potential investor? If you’ve been keeping your eye on 601888, now may not be the most favorable time to buy, given that it’s trading around fair value. However, the positive outlook is encouraging for the company, meaning it’s worth digging deeper into other factors, such as balance sheet strength, to take advantage of the next price drop.
If you want to know more about China Tourism Group Duty Free as a business, it’s important to be aware of the risks it faces: At Simply Wall St, we’ve spotted 1 warning sign for China Tourism Group Duty Free that we think is worth noting.
If you are no longer interested in China Tourism Group Duty Free, 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 of general nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell stocks, and does not take into account your objectives or financial situation. We aim to provide long-term analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned herein.
