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The Hong Kong stock market has recently experienced a downturn, with the Hang Seng Index falling by 6.53% amid waning optimism about Beijing's stimulus measures. This decline presents potential opportunities for investors seeking undervalued stocks that may be trading below their intrinsic value. In such volatile conditions, identifying stocks with strong fundamentals and growth potential can be key to finding hidden value in the 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$32.25 | HK$63.32 | 49.1% |
| Giant Biogene Holding (SEHK:2367) | HK$51.10 | HK$97.66 | 47.7% |
| Laopu Gold (SEHK:6181) | HK$157.20 | HK$308.63 | 49.1% |
| Yadea Group Holdings (SEHK:1585) | HK$12.02 | HK$23.15 | 48.1% |
| Kuaishou Technology (SEHK:1024) | HK$46.35 | HK$88.45 | 47.6% |
| Shanghai INT Medical Instruments (SEHK:1501) | HK$28.15 | HK$55.93 | 49.7% |
| CSC Financial (SEHK:6066) | HK$8.99 | HK$17.29 | 48% |
| Hangzhou SF Intra-city Industrial (SEHK:9699) | HK$10.24 | HK$19.54 | 47.6% |
| Innovent Biologics (SEHK:1801) | HK$43.85 | HK$80.39 | 45.5% |
| AK Medical Holdings (SEHK:1789) | HK$4.29 | HK$8.33 | 48.5% |
Below we spotlight a couple of our favorites from our exclusive screener.
Swire Properties
Overview: Swire Properties Limited, with a market cap of HK$95.25 billion, develops, owns, and operates mixed-use commercial properties in Hong Kong, Mainland China, the United States, and internationally.
Operations: The company's revenue segments consist of HK$14.39 billion from Property Investment, HK$945 million from Hotels, and HK$119 million from Property Trading.
Estimated Discount To Fair Value: 14.0%
Swire Properties is trading at HK$16.32, below its estimated fair value of HK$18.98, with earnings projected to grow 25.5% annually—outpacing the Hong Kong market's 12%. Despite a recent decline in net income to HK$1.80 billion for H1 2024 and lower profit margins, the company’s share repurchase program could enhance shareholder value. However, insider selling and a dividend yield not fully covered by earnings suggest caution is warranted despite its undervaluation based on cash flows.
WuXi XDC Cayman
Overview: WuXi XDC Cayman Inc. is an investment holding company that functions as a contract research, development, and manufacturing organization with operations in China, North America, Europe, and internationally, and has a market cap of HK$27.32 billion.