LONDON, UK / ACCESSWIRE / April 16, 2019 / We believe China Water Affairs Group's (CWA) (HKSE: 855) strong financial position (net debt/equity FY18 c 70%) and impressive track record of generating returns for shareholders should enable it to exploit the favourable market conditions and allow for a continuation of its strong growth profile. Following the recent acquisition of 29.5% of Kangda International, CWA's market valuation appears undemanding compared to its peers despite its track record of delivering attractive returns for its shareholders.
Applying peer group average multiples would indicate a valuation of c HK$11.4 per share (up HK$0.9 per share since we last published in December 2018), for CWA, c HK$3 per share above the current share price. At HK$8.2 per share, CWA trades on a PEG ratio of only 0.6x versus 1.6x for its peers. Applying an undemanding PEG ratio of 1.0x would indicate a valuation of HK$13.0 per share. Our DCF points to a valuation of HK$11.9 per share.
Click here to view the full report.
All reports published by Edison are available to download free of charge from its website
About Edison: Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.
Edison is authorised and regulated by the Financial Conduct Authority.
Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.
For more information please contact Edison:
Graeme Moyse, +44 (0)20 3077 5700
Learn more at www.edisongroup.com and connect with Edison on:
SOURCE: Edison Investment Research Limited