Yihai International Holding Ltd. (HKG:1579), which is in the food business, and is based in China, received a lot of attention from a substantial price increase on the SEHK over the last few months. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Yihai International Holding’s outlook and valuation to see if the opportunity still exists.

See our latest analysis for Yihai International Holding

What's the opportunity in Yihai International Holding?

The stock seems fairly valued at the moment according to my valuation model. It’s trading around 4.1% below my intrinsic value, which means if you buy Yihai International Holding today, you’d be paying a reasonable price for it. And if you believe the company’s true value is HK$37.47, then there isn’t much room for the share price grow beyond what it’s currently trading. Furthermore, Yihai International Holding’s low beta implies that the stock is less volatile than the wider market.

What kind of growth will Yihai International Holding generate?

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. With profit expected to more than double over the next couple of years, the future seems bright for Yihai International Holding. 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? 1579’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 1579, 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 diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Yihai International Holding. You can find everything you need to know about Yihai International Holding in the latest infographic research report. If you are no longer interested in Yihai International Holding, you can use our free platform to see my list of over 50 other stocks with a high growth potential.

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.