A stock that you can buy at a price below what it is worth is considered undervalued. This is the case for Bank of Zhengzhou and Guodian Technology & Environment Group. There’s a few ways you can measure the value of a company – you can forecast how much money it will make in the future and base your valuation off of this, or you can look around at its peers of similar size and industry to roughly estimate what it should be worth. Below, I’ve created a list of companies that compare favourably in all criteria based on their most recent financial data, making them potentially good investments.

Bank of Zhengzhou Co., Ltd. (SEHK:6196)

Bank of Zhengzhou Co., Ltd. provides various banking products and services in the People’s Republic of China. Started in 1996, and currently lead by Xueqing Shen, the company size now stands at 3,898 people and has a market cap of HKD HK$23.36B, putting it in the large-cap group.

6196’s shares are currently hovering at around -66% lower than its true level of ¥12.98, at the market price of HK$4.39, based on my discounted cash flow model. This discrepancy gives us a chance to invest in 6196 at a discount. Also, 6196’s PE ratio stands at around 4.64x compared to its Banks peer level of, 7x suggesting that relative to its competitors, we can buy 6196’s stock at a cheaper price today. 6196 also has a healthy balance sheet, as current assets can cover liabilities in the near term and over the long run.

More detail on Bank of Zhengzhou here.

Guodian Technology & Environment Group Corporation Limited (SEHK:1296)

Guodian Technology & Environment Group Corporation Limited, together with its subsidiaries, provides environmental protection and energy conservation solutions, and renewable energy equipment manufacturing and solutions in the People’s Republic of China. Formed in 2001, and currently run by Jun Zhang, the company currently employs 7,208 people and has a market cap of HKD HK$3.15B, putting it in the mid-cap group.

1296’s stock is now trading at -88% under its actual value of ¥4.27, at the market price of HK$0.52, based on my discounted cash flow model. This difference in price and value gives us a chance to buy low. Moreover, 1296’s PE ratio stands at around 7.27x while its Electrical peer level trades at, 11.08x implying that relative to other stocks in the industry, you can buy 1296 for a cheaper price. 1296 is also in great financial shape, with current assets covering liabilities in the near term and over the long run.

More on Guodian Technology & Environment Group here.