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China Zheshang Bank and I.T are two of the companies on my list that I consider are undervalued. Investors can benefit from buying these companies while they are discounted, because they gain when the market prices move towards the stocks’ true values. Below is a list of stocks I’ve compiled that are deemed undervalued based on the latest financial data.
China Zheshang Bank Co., Ltd (SEHK:2016)
China Zheshang Bank Co., Ltd. provides a range of banking products and services in the People’s Republic of China. Formed in 2004, and run by CEO Xiaochun Liu, the company size now stands at 12,304 people and has a market cap of HKD HK$78.48B, putting it in the large-cap group.
2016’s stock is now trading at -60% less than its actual value of ¥11.03, at the market price of ¥4.37, based on my discounted cash flow model. signalling an opportunity to buy the stock at a low price. Also, 2016’s PE ratio stands at 5.7x compared to its banks peer level of 7.1x, meaning that relative to its comparable company group, we can invest in 2016 at a lower price. 2016 is also in good financial health, as short-term assets amply cover upcoming and long-term liabilities.
More on China Zheshang Bank here.
I.T Limited (SEHK:999)
I.T Limited, an investment holding company, engages in retailing and trading fashion wear and accessories. Formed in 1988, and now led by CEO Kar Wai Sham, the company now has 6,536 employees and with the company’s market cap sitting at HKD HK$3.68B, it falls under the mid-cap category.
999’s stock is now floating at around -43% beneath its intrinsic level of $5.36, at the market price of $3.08, based on its expected future cash flows. This discrepancy gives us a chance to invest in 999 at a discount. Moreover, 999’s PE ratio is trading at around 11x while its specialty retail peer level trades at 15.2x, indicating that relative to other stocks in the industry, we can buy 999’s stock at a cheaper price today. 999 is also robust in terms of financial health, as near-term assets sufficiently cover liabilities in the near future as well as in the long run.
Dig deeper into I.T here.
Shenzhen Investment Limited (SEHK:604)
Shenzhen Investment Limited, together with its subsidiaries, engages in the investment, development, and management of real estate properties primarily in Mainland China. The company size now stands at 18293 people and with the stock’s market cap sitting at HKD HK$25.63B, it comes under the large-cap stocks category.
604’s shares are currently trading at -58% below its intrinsic value of $7.64, at a price of $3.18, according to my discounted cash flow model. This discrepancy signals a potential opportunity to buy 604 shares at a low price. Also, 604’s PE ratio stands at around 4.7x compared to its real estate peer level of 9.1x, indicating that relative to its peers, we can purchase 604’s shares for cheaper. 604 is also in great financial shape, with current assets covering liabilities in the near term and over the long run. It’s debt-to-equity ratio of 63% has been reducing over the past couple of years showing its capacity to pay down its debt. More detail on Shenzhen Investment here.