Top 3 Stocks on SEHK Possibly Trading Below Estimated Value in July 2024
Amid a global landscape where major indices like the Dow Jones and Nasdaq are reaching new highs, the Hong Kong stock market presents unique opportunities. As investors seek value in July 2024, understanding which stocks are potentially undervalued becomes crucial in navigating through varying economic signals and 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$40.45 | HK$75.59 | 46.5% |
China Resources Mixc Lifestyle Services (SEHK:1209) | HK$24.20 | HK$47.77 | 49.3% |
China Cinda Asset Management (SEHK:1359) | HK$0.68 | HK$1.29 | 47.3% |
West China Cement (SEHK:2233) | HK$1.16 | HK$2.15 | 46.1% |
BYD (SEHK:1211) | HK$240.60 | HK$462.37 | 48% |
Zhaojin Mining Industry (SEHK:1818) | HK$15.86 | HK$30.22 | 47.5% |
Super Hi International Holding (SEHK:9658) | HK$14.14 | HK$25.95 | 45.5% |
Vobile Group (SEHK:3738) | HK$1.23 | HK$2.31 | 46.8% |
MicroPort Scientific (SEHK:853) | HK$5.31 | HK$9.66 | 45% |
Zylox-Tonbridge Medical Technology (SEHK:2190) | HK$11.00 | HK$21.99 | 50% |
Let's dive into some prime choices out of from the screener.
iDreamSky Technology Holdings
Overview: iDreamSky Technology Holdings Limited is an investment holding company that operates a digital entertainment platform, publishing games through mobile apps and websites in the People’s Republic of China, with a market cap of HK$3.92 billion.
Operations: The company generates revenue primarily from its Game and Information Services segment, amounting to CN¥1.92 billion.
Estimated Discount To Fair Value: 36.4%
iDreamSky Technology Holdings is significantly undervalued based on cash flows, trading at HK$2.52 against a fair value estimate of HK$3.96. Its revenue growth is expected to outpace the Hong Kong market substantially, with a forecast increase of 29.8% per year compared to the market's 7.7%. Additionally, earnings are projected to surge, with profitability anticipated within three years and an impressive future return on equity of 24.8%. However, shareholder dilution has occurred over the past year.
Everest Medicines
Overview: Everest Medicines Limited is a biopharmaceutical company focused on the discovery, licensing, development, and commercialization of therapies and vaccines for unmet medical needs in Greater China and other Asia Pacific markets, with a market capitalization of approximately HK$6.40 billion.
Operations: The company generates revenue primarily from its pharmaceuticals segment, totaling CN¥125.93 million.
Estimated Discount To Fair Value: 17%
Everest Medicines is trading at HK$19.96, below the estimated fair value of HK$24.04, reflecting a potential undervaluation based on cash flows. It's expected to become profitable within three years with revenue growth forecasted at 38.6% annually, significantly outpacing the Hong Kong market average of 7.7%. However, its projected return on equity is low at 1.3%, and recent shareholder dilution may concern investors despite strong clinical trial results for its ulcerative colitis treatment, VELSIPITY®, showing effectiveness and safety.
IGG
Overview: IGG Inc is an investment holding company that develops and operates mobile and online games across Asia, North America, Europe, and other global markets, with a market capitalization of approximately HK$3.09 billion.
Operations: The company's primary revenue of HK$5.27 billion is generated from the development and operation of online games.
Estimated Discount To Fair Value: 31.8%
IGG Inc. is perceived as undervalued based on its cash flow analysis, trading at HK$2.73, significantly below the estimated fair value of HK$4.00. The company's earnings are expected to grow by 51.2% annually, outperforming the Hong Kong market's average growth rate of 11.4%. Despite this robust growth projection, IGG's revenue growth forecast of 4.2% annually trails behind the market expectation of 7.7%. Recent corporate governance enhancements and board changes could provide a stable foundation for future performance.
Insights from our recent growth report point to a promising forecast for IGG's business outlook.
Take a closer look at IGG's balance sheet health here in our report.
Turning Ideas Into Actions
Embark on your investment journey to our 43 Undervalued SEHK Stocks Based On Cash Flows selection here.
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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:1119 SEHK:1952 and SEHK:799.
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