CYD is now undervalued and could go up 733%
China Yuchai International is a holding company that manufactures and sells light to heavy-duty engines, employing 8,177 staff, and operates through Yuchai and HL Global Enterprises segments. Yuchai focuses on diesel engines for various applications, while HLGE engages in hospitality and property development in China and Malaysia.
Based on our analysis, China Yuchai International has been rated 5 out of 5 stars for being undervalued due to several compelling financial metrics.
The company’s price-to-earnings (PE) ratio stands at just 1.99, significantly lower than the sector average of 19.94. This suggests that the stock may be undervalued relative to its earnings potential, indicating a possible investment opportunity. Similarly, the price-to-book (PB) ratio of 0.31, compared to the sector average of 2.54, implies that the company is trading at a fraction of its book value, further reinforcing the undervaluation narrative.
China Yuchai's net profit margin is 1.58, exceeding the sector’s average of 0.75, demonstrating efficient cost management and profitability relative to revenue. The return on equity (ROE) is notably strong at 3.52, compared to the sector average of 1.94, indicating that the company generates higher returns on shareholders' equity, which is a positive sign for potential investors.
Additionally, the company offers a dividend yield of 4.08, well above the sector average of 1.70, making it an attractive option for income-seeking investors. Finally, the return on assets (ROA) ratio of 1.19, in contrast to the sector average of 0.07, highlights the company’s effective use of assets to generate earnings.
These ratios collectively suggest that China Yuchai International is significantly undervalued compared to its peers, presenting a strong case for investment consideration.
This is not a comprehensive overview of our valuation, and should not be viewed as financial advice. Always do your own research before considering an investment.
