In This Article:
China Maple Leaf Educational Systems Limited (HKG:1317), which is in the consumer services business, and is based in China, saw significant share price volatility over the past couple of months on the SEHK, rising to the highs of HK$7.17 and falling to the lows of HK$3.09. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether China Maple Leaf Educational Systems’s current trading price of HK$3.24 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 China Maple Leaf Educational Systems’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 China Maple Leaf Educational Systems
What is China Maple Leaf Educational Systems worth?
According to my valuation model, China Maple Leaf Educational Systems seems to be fairly priced at around 14% below my intrinsic value, which means if you buy China Maple Leaf Educational Systems today, you’d be paying a fair price for it. And if you believe the company’s true value is HK$3.78, then there’s not much of an upside to gain from mispricing. Is there another opportunity to buy low in the future? Since China Maple Leaf Educational Systems’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from China Maple Leaf Educational Systems?
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. China Maple Leaf Educational Systems’s earnings over the next few years are expected to double, indicating a very optimistic future ahead. This should lead to stronger cash flows, feeding into a higher share value.
What this means for you:
Are you a shareholder? It seems like the market has already priced in 1317’s positive outlook, 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?