Companies with shares trading at a market price below what they are actually worth, such as Shandong Xinhua Pharmaceutical and Hi Sun Technology (China), are deemed undervalued. Investors can profit from the difference by investing in these stocks as the current market prices should eventually move towards their true values. If capital gains are what you’re after in your next investment, I’ve put together a list of undervalued stocks you may be interested in, based on the latest financial data from each company.

Shandong Xinhua Pharmaceutical Company Limited (SEHK:719)

Shandong Xinhua Pharmaceutical Co., Ltd., through its subsidiaries, develops, manufactures, and sells bulk pharmaceuticals, preparations, and chemical products. Formed in 1943, and now led by CEO Deping Du, the company employs 6,312 people and with the market cap of HKD HK$6.34B, it falls under the mid-cap category.

719’s shares are currently hovering at around -46% lower than its true value of ¥14.91, at the market price of HK$8.01, according to my discounted cash flow model. The difference between value and price signals a potential opportunity to buy 719 shares at a discount. What’s even more appeal is that 719’s PE ratio is trading at 14.43x against its its Pharmaceuticals peer level of, 18.26x implying that relative to other stocks in the industry, 719 can be bought at a cheaper price right now. 719 also has a healthy balance sheet, with short-term assets covering liabilities in the near future as well as in the long run.

Dig deeper into Shandong Xinhua Pharmaceutical 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 currently employs 2117 people and with the company’s market cap sitting at HKD HK$4.30B, it falls under the mid-cap stocks category.

818’s shares are now trading at -54% below its true level of $3.37, at a price tag of HK$1.55, based on its expected future cash flows. This discrepancy gives us a chance to invest in 818 at a discount. In terms of relative valuation, 818’s PE ratio is trading at around 12.4x compared to its IT peer level of, 16.93x implying that relative to its comparable company group, you can buy 818’s shares at a cheaper price. 818 also has a healthy balance sheet, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. 818 also has a miniscule amount of debt on its balance sheet, which gives it headroom to grow and financial flexibility. Dig deeper into Hi Sun Technology (China) here.