3 SEHK Stocks Estimated To Be Trading Below Their Intrinsic Value
The Hong Kong stock market has recently experienced a notable surge, buoyed by China's comprehensive stimulus measures aimed at revitalizing its economy. This positive sentiment has created an opportune environment for investors to explore stocks that may be trading below their intrinsic value. In the current market landscape, identifying undervalued stocks involves looking for companies with strong fundamentals that have not yet been fully recognized by the broader market.
Top 10 Undervalued Stocks Based On Cash Flows In Hong Kong
Name | Current Price | Fair Value (Est) | Discount (Est) |
BYD Electronic (International) (SEHK:285) | HK$32.55 | HK$64.40 | 49.5% |
Giant Biogene Holding (SEHK:2367) | HK$50.95 | HK$97.67 | 47.8% |
Alibaba Health Information Technology (SEHK:241) | HK$5.35 | HK$10.01 | 46.6% |
XD (SEHK:2400) | HK$25.50 | HK$47.75 | 46.6% |
China Ruyi Holdings (SEHK:136) | HK$2.26 | HK$4.16 | 45.6% |
Shanghai INT Medical Instruments (SEHK:1501) | HK$28.70 | HK$56.43 | 49.1% |
Zylox-Tonbridge Medical Technology (SEHK:2190) | HK$13.00 | HK$25.94 | 49.9% |
Digital China Holdings (SEHK:861) | HK$2.96 | HK$5.86 | 49.5% |
Akeso (SEHK:9926) | HK$68.60 | HK$134.24 | 48.9% |
Hua Hong Semiconductor (SEHK:1347) | HK$20.90 | HK$38.48 | 45.7% |
Below we spotlight a couple of our favorites from our exclusive screener.
Giant Biogene Holding
Overview: Giant Biogene Holding Co., Ltd. is an investment holding company involved in the research, development, manufacture, and sale of bioactive material-based beauty and health products in China, with a market cap of HK$51.42 billion.
Operations: The company generates revenue primarily from its biotechnology segment, which amounted to CN¥4.46 billion.
Estimated Discount To Fair Value: 47.8%
Giant Biogene Holding is trading at 47.8% below its estimated fair value of HK$97.67, supported by strong cash flows and a recent earnings report showing net income growth to CNY 983.16 million for H1 2024 from CNY 666.94 million a year ago. The company's revenue and profit are forecast to grow significantly faster than the Hong Kong market, driven by innovative product launches like the Vpro skincare line featuring advanced recombinant collagen technology.
BYD Electronic (International)
Overview: BYD Electronic (International) Company Limited designs, manufactures, assembles, and sells mobile handset components and modules both in China and internationally, with a market cap of HK$73.34 billion.
Operations: The company's revenue is primarily derived from the manufacture, assembly, and sale of mobile handset components and modules, amounting to CN¥152.36 billion.
Estimated Discount To Fair Value: 49.5%
BYD Electronic (International) is trading at HK$32.55, significantly below its estimated fair value of HK$64.4, suggesting it may be undervalued based on cash flows. Recent earnings for H1 2024 showed sales of CNY 78.58 billion and net income of CNY 1.52 billion, stable year-over-year. Analysts forecast annual profit growth at 24.9%, outpacing the Hong Kong market's average growth rate, though revenue growth is expected to be slower at 12% per year.
Meituan
Overview: Meituan is a technology retail company in the People's Republic of China with a market cap of approximately HK$1.02 trillion.
Operations: The company generates revenue from two main segments: Core Local Commerce, which contributed CN¥228.13 billion, and New Initiatives, which brought in CN¥77.56 billion.
Estimated Discount To Fair Value: 37.7%
Meituan is trading at HK$172, significantly below its estimated fair value of HK$276.09, indicating it may be undervalued based on cash flows. Recent H1 2024 earnings showed sales of CNY 155.53 billion and net income of CNY 16.72 billion, both up from the previous year. Analysts forecast annual earnings growth at 26%, outpacing the Hong Kong market's average growth rate. The company has also completed a substantial buyback program worth $2 billion in recent months.
Our growth report here indicates Meituan may be poised for an improving outlook.
Get an in-depth perspective on Meituan's balance sheet by reading our health report here.
Turning Ideas Into Actions
Navigate through the entire inventory of 40 Undervalued SEHK Stocks Based On Cash Flows here.
Have you diversified into these companies? Leverage the power of Simply Wall St's portfolio to keep a close eye on market movements affecting your investments.
Take control of your financial future using Simply Wall St, offering free, in-depth knowledge of international markets to every investor.
Curious About Other Options?
Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence.
Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.
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:2367 SEHK:285 and SEHK:3690.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com