3 SEHK Stocks Possibly Trading Below Fair Value Estimates

In This Article:

The Hong Kong market has recently experienced a decline, with the Hang Seng Index retreating by 2.28% amid concerns over the economic outlook and unexpected rate cuts by the central bank. Despite this downturn, opportunities may exist for investors seeking stocks that could be trading below their fair value estimates. In such an environment, identifying undervalued stocks involves looking at companies with strong fundamentals that might be temporarily overlooked due to broader market conditions.

Top 10 Undervalued Stocks Based On Cash Flows In Hong Kong

Name

Current Price

Fair Value (Est)

Discount (Est)

Giant Biogene Holding (SEHK:2367)

HK$38.50

HK$76.16

49.5%

COSCO SHIPPING Energy Transportation (SEHK:1138)

HK$8.88

HK$16.25

45.4%

Beauty Farm Medical and Health Industry (SEHK:2373)

HK$17.10

HK$32.96

48.1%

Bairong (SEHK:6608)

HK$8.79

HK$15.63

43.7%

Mobvista (SEHK:1860)

HK$1.90

HK$3.69

48.6%

AK Medical Holdings (SEHK:1789)

HK$4.23

HK$8.05

47.5%

Q Technology (Group) (SEHK:1478)

HK$4.22

HK$8.28

49%

MicroPort Scientific (SEHK:853)

HK$4.95

HK$9.41

47.4%

Vobile Group (SEHK:3738)

HK$1.24

HK$2.31

46.4%

Chervon Holdings (SEHK:2285)

HK$16.68

HK$30.31

45%

Click here to see the full list of 36 stocks from our Undervalued SEHK Stocks Based On Cash Flows screener.

Let's review some notable picks from our screened stocks.

BYD Electronic (International)

Overview: BYD Electronic (International) Company Limited, with a market cap of HK$66.81 billion, focuses on designing, manufacturing, assembling, and selling mobile handset components and modules both in the People’s Republic of China and internationally.

Operations: The company's revenue primarily comes from the manufacture, assembly, and sale of mobile handset components and modules, generating CN¥129.96 billion.

Estimated Discount To Fair Value: 37.1%

BYD Electronic (International) is trading at HK$29.65, significantly below its estimated fair value of HK$47.14, indicating it is undervalued based on cash flows. Earnings grew by 117.6% over the past year and are forecast to grow 22.3% annually, outpacing the Hong Kong market's growth rate of 11.3%. Recent inclusion in the Hang Seng Index and a dividend increase further bolster its investment appeal despite low forecasted return on equity (19%).

SEHK:285 Discounted Cash Flow as at Jul 2024

Wasion Holdings

Overview: Wasion Holdings Limited is an investment holding company that focuses on the research, development, production, and sale of energy metering and energy efficiency management solutions for energy supply industries across various regions including China, Africa, the United States, Europe, and Asia; it has a market cap of approximately HK$6.23 billion.

Operations: The company's revenue segments include Advanced Distribution Operations (CN¥2.48 billion), Power Advanced Metering Infrastructure (CN¥2.67 billion), and Communication and Fluid Advanced Metering Infrastructure (CN¥2.21 billion).

Estimated Discount To Fair Value: 34%

Wasion Holdings, trading at HK$6.26, is undervalued with an estimated fair value of HK$9.49. Earnings grew 61% last year and are forecast to grow 25.8% annually, surpassing the Hong Kong market's growth rate (11.3%). Recent contracts in Hungary (EUR 31.62 million), Singapore (USD 9.42 million), and Malaysia (USD 5.74 million) highlight its international reach and brand recognition despite an unstable dividend track record and low forecasted return on equity (16.6%).

SEHK:3393 Discounted Cash Flow as at Jul 2024

Inspur Digital Enterprise Technology

Overview: Inspur Digital Enterprise Technology Limited (SEHK:596) is an investment holding company that offers software development, other software services, and cloud services in the People’s Republic of China, with a market cap of HK$3.33 billion.

Operations: The company's revenue segments include CN¥2.00 billion from Cloud Services, CN¥2.47 billion from Management Software, and CN¥3.83 billion from Internet of Things (IoT) Solutions.

Estimated Discount To Fair Value: 41.2%

Inspur Digital Enterprise Technology, trading at HK$2.92, is significantly undervalued with an estimated fair value of HK$4.96. Earnings are forecast to grow 38% annually over the next three years, outpacing the Hong Kong market's growth rate (11.3%). Revenue is expected to increase by 21.8% per year, also surpassing the market average (7.4%). However, its return on equity is projected to be relatively low at 19.7%.

SEHK:596 Discounted Cash Flow as at Jul 2024

Key Takeaways

Want To Explore Some Alternatives?

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include SEHK:285 SEHK:3393 and SEHK:596.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]