Should You Investigate China Tobacco International (HK) Company Limited (HKG:6055) At HK$34.48?

While China Tobacco International (HK) Company Limited (HKG:6055) might not have the largest market cap around , it received a lot of attention from a substantial price movement on the SEHK over the last few months, increasing to HK$47.10 at one point, and dropping to the lows of HK$32.32. 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 China Tobacco International (HK)'s current trading price of HK$34.48 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 China Tobacco International (HK)’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

What Is China Tobacco International (HK) Worth?

The stock seems fairly valued at the moment according to our valuation model. It’s trading around 11.01% above our intrinsic value, which means if you buy China Tobacco International (HK) today, you’d be paying a relatively fair price for it. And if you believe that the stock is really worth HK$31.06, then there isn’t really any room for the share price grow beyond what it’s currently trading. Furthermore, China Tobacco International (HK)’s low beta implies that the stock is less volatile than the wider market.

See our latest analysis for China Tobacco International (HK)

What does the future of China Tobacco International (HK) look like?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 24% over the next couple of years, the future seems bright for China Tobacco International (HK). 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? 6055’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. 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 6055, now may not be the most optimal 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 further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

It can be quite valuable to consider what analysts expect for China Tobacco International (HK) from their most recent forecasts. At Simply Wall St, we have the analysts estimates which you can view by clicking here.

If you are no longer interested in China Tobacco International (HK), you can use our free platform to see our list of over 50 other stocks with a high growth potential.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.