A stock that you can buy at a price below what it is worth is considered undervalued. This is the case for SHK Hong Kong Industries and Pacific Plywood Holdings. 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.

SHK Hong Kong Industries Limited (SEHK:666)

SHK Hong Kong Industries Limited is a venture capital firm specializing in early venture, mid venture, emerging growth, and growth capital investments. SHK Hong Kong Industries was founded in 1990 and with the company’s market cap sitting at HKD HK$962.14M, it falls under the small-cap category.

666’s shares are currently floating at around -59% lower than its real value of $0.58, at a price of HK$0.23, based on its expected future cash flows. This price and value mismatch indicates a potential opportunity to buy the stock at a low price. Also, 666’s PE ratio is currently around 5.78x relative to its Capital Markets peer level of, 14.4x suggesting that relative to its competitors, you can purchase 666’s stock for a lower price right now. 666 is also a financially robust company, with current assets covering liabilities in the near term and over the long run. 666 also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. Continue research on SHK Hong Kong Industries here.

Pacific Plywood Holdings Limited (SEHK:767)

Pacific Plywood Holdings Limited, an investment holding company, primarily engages in the operation of peer-to-peer (P2P) financing platform under the CAIJIA brand; and provision of other loan facilitation services. The company now has 62 employees and has a market cap of HKD HK$1.20B, putting it in the small-cap category.

767’s shares are currently trading at -65% under its real value of $0.89, at a price tag of HK$0.31, according to my discounted cash flow model. This mismatch indicates a chance to invest in 767 at a discounted price. Moreover, 767’s PE ratio is trading at 3.65x compared to its Diversified Financial peer level of, 11.64x implying that relative to its competitors, 767’s stock can be bought at a cheaper price. 767 is also a financially robust company, as current assets can cover liabilities in the near term and over the long run. 767 has zero debt on its books as well, meaning it has no long term debt obligations to worry about. More on Pacific Plywood Holdings here.