BBI Life Sciences Corporation (HKG:1035), which is in the life sciences business, and is based in China, received a lot of attention from a substantial price movement on the SEHK over the last few months, increasing to HK$2.74 at one point, and dropping to the lows of HK$2.03. 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 BBI Life Sciences’s current trading price of HK$2.18 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at BBI Life Sciences’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
View our latest analysis for BBI Life Sciences
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Is BBI Life Sciences still cheap?
Great news for investors – BBI Life Sciences is still trading at a fairly cheap price. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that BBI Life Sciences’s ratio of 14.2x is below its peer average of 25.39x, which suggests the stock is undervalued compared to the Life Sciences industry. However, given that BBI Life Sciences’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from BBI Life Sciences?
Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. 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 grow by 46% over the next couple of years, the future seems bright for BBI Life Sciences. 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? Since 1035 is currently undervalued, it may be a great time to increase your holdings in the stock. With an optimistic outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.