In This Article:
The Hong Kong market has experienced a mix of caution and optimism recently, with the Hang Seng Index advancing despite global economic uncertainties. In this environment, identifying undervalued stocks can be particularly rewarding for investors looking to capitalize on potential market inefficiencies. A good stock in such conditions often exhibits strong fundamentals and is trading below its intrinsic value, offering a margin of safety.
Top 10 Undervalued Stocks Based On Cash Flows In Hong Kong
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Best Pacific International Holdings (SEHK:2111) | HK$2.37 | HK$4.34 | 45.4% |
| ANTA Sports Products (SEHK:2020) | HK$71.65 | HK$135.96 | 47.3% |
| BYD Electronic (International) (SEHK:285) | HK$30.25 | HK$53.35 | 43.3% |
| Tencent Holdings (SEHK:700) | HK$381.80 | HK$761.31 | 49.8% |
| Inspur Digital Enterprise Technology (SEHK:596) | HK$3.22 | HK$5.70 | 43.5% |
| WuXi XDC Cayman (SEHK:2268) | HK$19.82 | HK$39.19 | 49.4% |
| Pacific Textiles Holdings (SEHK:1382) | HK$1.52 | HK$2.85 | 46.6% |
| iDreamSky Technology Holdings (SEHK:1119) | HK$2.17 | HK$4.14 | 47.6% |
| Jinke Smart Services Group (SEHK:9666) | HK$7.75 | HK$13.96 | 44.5% |
| Chervon Holdings (SEHK:2285) | HK$18.94 | HK$35.81 | 47.1% |
Let's dive into some prime choices out of the screener.
Zhou Hei Ya International Holdings
Overview: Zhou Hei Ya International Holdings Company Limited (SEHK:1458) is an investment holding company that produces, markets, and retails casual braised food in the People’s Republic of China, with a market cap of HK$3.29 billion.
Operations: The company's revenue segments include the production, marketing, and retailing of casual braised duck-related food, generating CN¥2.59 billion.
Estimated Discount To Fair Value: 11.2%
Zhou Hei Ya International Holdings reported half-year sales of CNY 1.26 billion, down from CNY 1.41 billion a year ago, with net income dropping to CNY 32.91 million from CNY 101.74 million. The company's recent earnings guidance aligns with these results, citing increased operational expenses and fair value changes in associates as key factors. Despite lower profit margins and no interim dividend, the stock trades below its estimated fair value of HK$1.68 at HK$1.49, indicating potential undervaluation based on cash flows.
K. Wah International Holdings
Overview: K. Wah International Holdings Limited, with a market cap of HK$5.52 billion, is an investment holding company involved in property development and investment in Hong Kong and Mainland China.