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The Hong Kong market has recently experienced a mix of volatility and resilience, with the Hang Seng Index gaining 0.85% amidst global economic uncertainties and deflationary pressures in China. Amidst these fluctuations, identifying undervalued stocks can be crucial for investors looking to capitalize on potential market inefficiencies. In this article, we explore three SEHK stocks that are estimated to be up to 49.9% below their intrinsic value, highlighting opportunities for those seeking to invest wisely in the current market conditions.
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$2.17 | HK$4.33 | 49.9% |
| Bosideng International Holdings (SEHK:3998) | HK$3.89 | HK$6.74 | 42.3% |
| ANTA Sports Products (SEHK:2020) | HK$70.25 | HK$135.83 | 48.3% |
| BYD Electronic (International) (SEHK:285) | HK$29.15 | HK$53.15 | 45.2% |
| Shanghai INT Medical Instruments (SEHK:1501) | HK$28.45 | HK$56.08 | 49.3% |
| Pacific Textiles Holdings (SEHK:1382) | HK$1.64 | HK$2.99 | 45.1% |
| iDreamSky Technology Holdings (SEHK:1119) | HK$2.27 | HK$4.22 | 46.2% |
| China Renaissance Holdings (SEHK:1911) | HK$7.27 | HK$12.30 | 40.9% |
| Weimob (SEHK:2013) | HK$1.20 | HK$2.18 | 44.9% |
| MicroPort CardioFlow Medtech (SEHK:2160) | HK$0.75 | HK$1.38 | 45.5% |
Let's take a closer look at a couple of our picks from the screened companies.
Hua Hong Semiconductor
Overview: Hua Hong Semiconductor Limited, an investment holding company with a market cap of HK$38.56 billion, manufactures and sells semiconductor products.
Operations: Hua Hong Semiconductor Limited generates revenue through the manufacturing and sale of semiconductor products.
Estimated Discount To Fair Value: 32.6%
Hua Hong Semiconductor is trading at HK$18.08, significantly below its estimated fair value of HK$26.83, indicating it may be undervalued based on discounted cash flow (DCF) analysis. Despite a recent drop in quarterly sales to US$478.52 million and net income to US$6.67 million, the company's earnings are forecast to grow 31.9% per year, outpacing the Hong Kong market's 11.3%. However, profit margins have decreased from 19.6% last year to 4.5%.
Best Pacific International Holdings
Overview: Best Pacific International Holdings Limited, with a market cap of HK$2.26 billion, manufactures, trades in, and sells elastic fabric, elastic webbing, and lace through its subsidiaries.