Highway Holdings Stock Fair Value – Highway Holdings to Secure Majority Stake in Synova with LoI Signing
December 12, 2023
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Highway Holdings ($NASDAQ:HIHO) Limited, a Hong Kong-listed manufacturer of metal components and assemblies for global customers, recently signed a Letter of Intent to secure a majority interest in Synova, a provider of precision plastic parts for the automotive, medical, and consumer industries. Highway Holdings is already familiar with Synova, having previously made two strategic investments in the company. Highway Holdings is a leading manufacturer of custom metal parts and assemblies for OEMs and other industrial customers worldwide. In addition to its manufacturing capabilities, Highway Holdings also provides value-added services such as engineering design, prototyping, and tooling. With a long-standing commitment to quality and customer satisfaction, the company’s products are used in a variety of applications across a range of industries. The acquisition of a majority stake in Synova will strengthen the existing relationship between the two companies and provide new opportunities for growth.
It specializes in a wide range of plastic parts and components for the automotive, medical, and consumer industries. This strategic move will allow Highway Holdings to leverage Synova’s expertise in precision plastic molding to further expand its customer base and product offering. The signing of the Letter of Intent marks an important step in the acquisition process and signifies Highway Holdings’ commitment to securing a majority stake in Synova. The two companies look forward to working together to provide high-quality products and services to their customers.
Share Price
On Monday, HIGHWAY HOLDINGS announced the signing of a Letter of Intent (LoI) to secure a majority stake in Synova, an industry-leading technology solutions provider. This move is set to further expand HIGHWAY HOLDINGS’ portfolio of services and presence in the market. Upon the news, HIGHWAY HOLDINGS’ stock opened at $2.0 and closed at $2.0, up by 0.5% from last closing price of 2.0. This indicates a positive reaction from the market on the LoI signing, as it looks to be a strategic move for HIGHWAY HOLDINGS. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Highway Holdings. More…
| Total Revenues | Net Income | Net Margin |
| 8.65 | -1.02 | -12.3% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Highway Holdings. More…
| Operations | Investing | Financing |
| 0.81 | 0.99 | -0.92 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Highway Holdings. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 12.69 | 5.18 | 1.83 |
Key Ratios Snapshot
Some of the financial key ratios for Highway Holdings are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| -9.8% | -0.6% | -14.4% |
| FCF Margin | ROE | ROA |
| 8.3% | -9.9% | -6.1% |
Analysis – Highway Holdings Stock Fair Value
At GoodWhale, we have conducted a detailed analysis of the fundamentals of HIGHWAY HOLDINGS, and our proprietary Valuation Line has determined that the fair value of HIGHWAY HOLDINGS’s share is $1.7. This means that the stock is currently trading at $2.0, which is 16.8% higher than the fair value that we have calculated. As a result, we believe that the stock is currently overvalued and investors should exercise caution when considering buying into HIGHWAY HOLDINGS at its current price. More…
Peers
The competition between Highway Holdings Ltd and its competitors, KFM Kingdom Holdings Ltd, CFM Holdings Ltd, and Lemtech Holdings Co Ltd, is fierce in the modern business world. Each company strives to outdo the other in production, quality, and price in order to gain a competitive advantage in the market. As such, all parties must stay vigilant in order to remain successful in this highly competitive environment.
– KFM Kingdom Holdings Ltd ($SEHK:03816)
KFM Kingdom Holdings Ltd is a publicly traded real estate and investment company. It is based in Hong Kong and has a market capitalization of 126.6M as of 2023. Return on Equity (ROE) measures how efficiently a company is able to generate profits from its shareholders’ investments and KFM Kingdom Holdings Ltd has an impressive ROE of 6.87%. KFM Kingdom Holdings Ltd primarily focuses on residential property development, residential rental, and commercial property development activities. It also engages in various other businesses such as money lending, hotel and restaurant operations, and venture capital investments.
– CFM Holdings Ltd ($SGX:5EB)
CFM Holdings Ltd is a leading financial services company that provides a range of services including wealth management, asset management, and investment banking. With its 20.76M market capitalization as of 2023, the company is well-positioned to continue to strengthen its foothold in the financial services industry. CFM Holdings Ltd has also demonstrated an impressive Return on Equity of 44.67%, reflecting the successful management of its assets and profits. The company is committed to providing excellent customer service and continues to invest in technological advancements to provide better service to their clients.
– Lemtech Holdings Co Ltd ($TWSE:4912)
Lemtech Holdings Co Ltd is a Beijing-based technology company specializing in the manufacture of electronic components. With a market capitalization of 4.42B as of 2023, Lemtech Holdings Co Ltd has established itself as a major player in the technology industry. Furthermore, the company has demonstrated an impressive Return on Equity of 8.64%, highlighting the strength of its performance and ability to generate profits from shareholders’ investments. This is a testament to the company’s value and ability to drive growth in the future.
Summary
Highway Holdings is a Hong Kong-based manufacturing company that recently announced the signing of a Letter of Intent (LoI) with Synova to acquire a majority stake. This move signals a shift in the company’s strategy and could prove to be a valuable addition to the company’s existing portfolio. Analysts believe that the acquisition could provide access to new markets and resources and could bring much-needed diversification to Highway Holdings’ operations. Furthermore, the deal could also result in cost savings for the company, as they will be able to leverage Synova’s existing relationships and infrastructure.
Of course, the potential upside of such an investment will depend on the terms of the LoI and the new shareholder structure. Investors should keep an eye on the details of this deal as it progresses.
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