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As an investor, I look for investments which does not compromise one fundamental factor for another. By this I mean, I look at stocks holistically, from their financial health to their future outlook. In the case of Liu Chong Hing Investment Limited (HKG:194), it is a financially-sound company with a a strong history of performance, trading at a discount. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on Liu Chong Hing Investment here.

Flawless balance sheet and undervalued

In the previous year, 194 has ramped up its bottom line by 36%, with its latest earnings level surpassing its average level over the last five years. Not only did 194 outperformed its past performance, its growth also exceeded the Real Estate industry expansion, which generated a 8.1% earnings growth. This is what investors like to see! 194 is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is an important determinant of the company’s health. 194 seems to have put its debt to good use, generating operating cash levels of 0.95x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.

194's share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. Investors have the opportunity to buy into the stock to reap capital gains, if 194's projected earnings trajectory does follow analyst consensus growth, which determines my intrinsic value of the company. Also, relative to the rest of its peers with similar levels of earnings, 194's share price is trading below the group's average. This bolsters the proposition that 194's price is currently discounted.

Next Steps:

For Liu Chong Hing Investment, I've compiled three fundamental aspects you should further research:

1. Future Outlook: What are well-informed industry analysts predicting for 194’s future growth? Take a look at our free research report of analyst consensus for 194’s outlook.

2. Dividend Income vs Capital Gains: Does 194 return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from 194 as an investment.

3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 194? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.