Recent undervalued companies based on their current market price include Jiahua Stores Holdings and Ka Shui International Holdings. 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.
Jiahua Stores Holdings Limited (SEHK:602)
Jiahua Stores Holdings Limited, an investment holding company, operates and manages retail stores and other related businesses in the People’s Republic of China. Started in 1995, and currently run by Xiao Xiong Zhuang, the company employs 1,360 people and with the company’s market cap sitting at HKD HK$425.38M, it falls under the small-cap stocks category.
602’s stock is now trading at -41% less than its intrinsic value of ¥0.69, at a price of ¥0.41, based on its expected future cash flows. This price and value mismatch indicates a potential opportunity to buy the stock at a low price. In terms of relative valuation, 602’s PE ratio is currently around 8.7x compared to its consumer retailing peer level of 17.1x, meaning that relative to its peers, 602’s shares can be purchased for a lower price. 602 is also robust in terms of financial health, as current assets can cover liabilities in the near term and over the long run. 602 also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility.
Ka Shui International Holdings Limited (SEHK:822)
Ka Shui International Holdings Limited, an investment holding company, primarily manufactures and sells zinc, magnesium, and aluminium alloy die casting products and components. Formed in 1980, and run by CEO Cheong Yiu Wong, the company provides employment to 5,800 people and with the company’s market capitalisation at HKD HK$509.44M, we can put it in the small-cap stocks category.
822’s stock is currently hovering at around -65% lower than its value of $1.65, at a price tag of $0.57, based on my discounted cash flow model. This difference in price and value gives us a chance to buy low. What’s even more appeal is that 822’s PE ratio is trading at 6.5x against its its machinery peer level of 15.5x, suggesting that relative to its competitors, 822 can be bought at a cheaper price right now. 822 is also strong financially, as near-term assets sufficiently cover liabilities in the near future as well as in the long run.
China Starch Holdings Limited (SEHK:3838)
China Starch Holdings Limited, an investment holding company, manufactures and sells cornstarch, lysine, starch-based sweetener, modified starch, and ancillary corn-based and corn-refined products. Formed in 2006, and currently lead by Shijun Gao, the company size now stands at 2,161 people and with the market cap of HKD HK$1.86B, it falls under the small-cap group.