In This Article:
Amidst a backdrop of global economic fluctuations and mixed performances in key markets, the Hong Kong stock market has shown resilience, with the Hang Seng Index posting modest gains. This stability presents an intriguing opportunity for investors to consider stocks that may be trading below their fair value, potentially offering attractive returns in a cautiously optimistic economic environment.
Top 10 Undervalued Stocks Based On Cash Flows In Hong Kong
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Giant Biogene Holding (SEHK:2367) | HK$40.70 | HK$75.83 | 46.3% |
| China Cinda Asset Management (SEHK:1359) | HK$0.66 | HK$1.29 | 48.8% |
| Super Hi International Holding (SEHK:9658) | HK$13.92 | HK$26.04 | 46.5% |
| Shanghai INT Medical Instruments (SEHK:1501) | HK$26.45 | HK$48.23 | 45.2% |
| Zhaojin Mining Industry (SEHK:1818) | HK$14.98 | HK$29.86 | 49.8% |
| BYD (SEHK:1211) | HK$235.20 | HK$464.83 | 49.4% |
| AK Medical Holdings (SEHK:1789) | HK$4.34 | HK$7.95 | 45.4% |
| Vobile Group (SEHK:3738) | HK$1.20 | HK$2.31 | 48.1% |
| MicroPort Scientific (SEHK:853) | HK$5.16 | HK$9.48 | 45.6% |
| Q Technology (Group) (SEHK:1478) | HK$4.05 | HK$7.45 | 45.7% |
Let's take a closer look at a couple of our picks from the screened companies
Pacific Textiles Holdings
Overview: Pacific Textiles Holdings Limited is a company that manufactures and trades in textile products, with a market capitalization of approximately HK$2.34 billion.
Operations: The company generates its revenue primarily from the manufacturing and trading of textile products, totaling approximately HK$4.67 billion.
Estimated Discount To Fair Value: 38.3%
Pacific Textiles Holdings is currently trading below its fair value by 38.3% at HK$1.67, against a fair value estimate of HK$2.71, highlighting its potential undervaluation based on cash flows. Despite a significant decrease in net profit and a drop in sales from HK$5.02 billion to HK$4.67 billion year-over-year, the company's earnings are expected to grow by 37.7% annually, outpacing the Hong Kong market average growth of 11.3%. However, profit margins have declined and recent corporate governance updates aim to align with new regulatory standards.
Shanghai INT Medical Instruments
Overview: Shanghai INT Medical Instruments Co., Ltd. operates in the healthcare sector, focusing on the development and manufacture of medical instruments, with a market capitalization of approximately HK$4.63 billion.