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Red Star Macalline Group and Xin Point Holdings are two of the companies on my list that I consider are undervalued. There’s a few ways you can determine how much a company is actually worth. 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. The discrepancy between the price and value means investors have an opportunity to buy shares at a discount. Below are the stocks I believe are undervalued on all criteria, based on their latest financial data.
Red Star Macalline Group Corporation Ltd. (SEHK:1528)
Red Star Macalline Group Corporation Ltd. Started in 1992, and currently run by Jianxing Che, the company employs 20,667 people and with the company’s market cap sitting at HKD HK$35.21B, it falls under the large-cap stocks category.
1528’s shares are now floating at around -82% lower than its intrinsic value of ¥48.65, at a price of ¥8.94, based on its expected future cash flows. This discrepancy signals a potential opportunity to buy 1528 shares at a low price. Additionally, 1528’s PE ratio stands at 6x relative to its real estate peer level of 9.1x, suggesting that relative to its peers, 1528 can be bought at a cheaper price right now. 1528 is also robust in terms of financial health, as current assets can cover liabilities in the near term and over the long run. Finally, its debt relative to equity is 43%, which has been diminishing over time, demonstrating 1528’s capability to reduce its debt obligations year on year. More detail on Red Star Macalline Group here.
Xin Point Holdings Limited (SEHK:1571)
Xin Point Holdings Limited manufactures, sells, and supplies automotive plastic electroplated components in the People’s Republic of China, North America, Europe, and internationally. Founded in 2002, and currently headed by CEO Xiaoming Ma, the company now has 4,448 employees and with the stock’s market cap sitting at HKD HK$5.48B, it comes under the mid-cap category.
1571’s stock is now floating at around -23% beneath its true value of ¥7.08, at a price tag of ¥5.44, according to my discounted cash flow model. This discrepancy gives us a chance to invest in 1571 at a discount. Moreover, 1571’s PE ratio stands at 12.9x compared to its index peer level of 13.2x, indicating that relative to its competitors, 1571’s stock can be bought at a cheaper price. 1571 is also strong in terms of its financial health, with short-term assets covering liabilities in the near future as well as in the long run. 1571 also has a miniscule amount of debt on its balance sheet, which gives it headroom to grow and financial flexibility. Interested in Xin Point Holdings? Find out more here.