Undervalued companies, such as Shandong International Trust and Hi Sun Technology (China), trade at a price less than their true values. There’s a few ways you can value a company. The most popular methods include discounting the company’s cash flows it is expected to create in the future, or comparing its price to its peers or the value of its assets. Analysing the most recent financial data, I’ve created a list of companies that compare favourably in all criteria, making them potentially good investments.
Shandong International Trust Co., Ltd. (SEHK:1697)
Shandong International Trust Co., Ltd. provides financial and wealth management services in China. Formed in 1987, and currently run by Zhong Wan, the company now has 192 employees and has a market cap of HKD HK$2.74B, putting it in the mid-cap stocks category.
1697’s shares are currently floating at around -39% below its true level of ¥6.91, at the market price of ¥4.24, according to my discounted cash flow model. signalling an opportunity to buy the stock at a low price. Moreover, 1697’s PE ratio is currently around 8.4x relative to its capital markets peer level of 16.1x, implying that relative to its competitors, 1697’s shares can be purchased for a lower price. 1697 also has a healthy balance sheet, with current assets covering liabilities in the near term and over the long run.
Interested in Shandong International Trust? Find out more here.
Hi Sun Technology (China) Limited (SEHK:818)
Hi Sun Technology (China) Limited, an investment holding company, primarily provides payment processing, financial, and platform operation solutions in Mainland China, Hong Kong, Japan, and Macau. The company employs 2117 people and has a market cap of HKD HK$4.58B, putting it in the mid-cap group.
818’s shares are now hovering at around -45% beneath its true value of $2.97, at the market price of $1.65, based on my discounted cash flow model. This difference in price and value gives us a chance to buy low. Also, 818’s PE ratio is trading at 12.5x against its its it peer level of 17.7x, indicating that relative to its competitors, you can buy 818 for a cheaper price. 818 is also robust in terms of financial health, with short-term assets covering liabilities in the near future as well as in the long run. 818 also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. Dig deeper into Hi Sun Technology (China) here.
HC International, Inc. (SEHK:2280)
HC International, Inc., an investment holding company, provides business information through online and offline channels in the People’s Republic of China. Started in 1992, and now run by Jun Liu, the company currently employs 2,851 people and with the company’s market capitalisation at HKD HK$5.97B, we can put it in the mid-cap stocks category.