At HK $ 7.04, is China East Education Holdings Limited (HKG: 667) worth a close look?

China East Education Holdings Limited (HKG: 667) is not the largest company in the market, but it has seen significant share price movement in recent months on the SEHK, reaching highs of HK $ 9.68 and falling to lows of HK $ 7.04. Certain movements in stock prices can give investors a better opportunity to get into the stock and potentially buy at a lower price. One question to be answered is whether China East Education Holdings’ current price of HK $ 7.04 reflects the real value of small cap? Or is it currently undervalued, giving us the opportunity to buy? Let’s take a look at the outlook and value of China East Education Holdings based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for China East Education Holdings

What are the opportunities offered by China East Education Holdings?

China East Education Holdings is currently expensive based on my multiple pricing model, where I look at the company’s price / earnings ratio relative to the industry average. In this case, I used the price-to-earnings (PE) ratio since there isn’t enough information to reliably forecast the stock’s cash flow. I find China East Education Holdings’ ratio of 51.35x to be higher than its peer average of 14.31x, suggesting that the stock is trading at a higher price than the consumer services sector. Another thing to keep in mind is that China East Education Holdings’ stock price is quite stable relative to the rest of the market, as indicated by its low beta. This means that if you think the current stock price is likely to move towards the levels of its industry peers over time, a low beta could suggest that it is not likely to reach that level anytime soon, and once there, it can be difficult for him to fall back into an attractive buying range.

Can we expect growth from China East Education Holdings?

SEHK: 667 Profit and Revenue Growth November 6, 2021

Future prospects are an important aspect when considering buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a large business with a solid outlook for a cheap price is always a good investment, so let’s take a look at the future expectations of the business as well. With profits expected to more than double over the next two years, the future looks bright for China East Education Holdings. It looks like a higher cash flow is expected for the stock, which should translate into a higher valuation of the stock.

What this means for you:

Are you a shareholder? The bullish future growth of 667 appears to have factored into the current stock price, with stocks trading above industry price multiples. However, this raises another question: is now a good time to sell? If you think 667 should trade below its current price, selling high and buying it back when its price drops to the industry PE ratio can be profitable. But before you make that decision, check to see if its fundamentals have changed.

Are you a potential investor? If you’ve been keeping your eye on 667 for a while, it might not be the best time to enter stock. The price has topped its industry peers, which means there is likely to be no more benefit from poor pricing. However, the positive outlook is encouraging for 667, which means it is worth digging into other factors in order to take advantage of the next price drop.

Keep in mind that when it comes to analyzing a stock, it is worth noting the risks involved. For example, China East Education Holdings has 2 warning signs we think you should be aware.

If you are no longer interested in China East Education Holdings, you can use our free platform to view our list of over 50 other high growth potential stocks.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St does not have any position in the mentioned stocks.

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