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As global markets face economic uncertainties and mixed performances, the Hong Kong market has not been immune to these challenges. The Hang Seng Index recently experienced a decline, reflecting investor caution amid weaker corporate earnings and economic data. In such volatile conditions, identifying undervalued stocks can be particularly advantageous for investors seeking value opportunities. Here are three SEHK value picks that could be considered undervalued in September 2024.
Top 10 Undervalued Stocks Based On Cash Flows In Hong Kong
Name | Current Price | Fair Value (Est) | Discount (Est) |
Bosideng International Holdings (SEHK:3998) | HK$3.75 | HK$6.80 | 44.8% |
MedSci Healthcare Holdings (SEHK:2415) | HK$1.17 | HK$2.26 | 48.1% |
WuXi XDC Cayman (SEHK:2268) | HK$19.74 | HK$39.39 | 49.9% |
Pacific Textiles Holdings (SEHK:1382) | HK$1.48 | HK$2.85 | 48.1% |
Shanghai INT Medical Instruments (SEHK:1501) | HK$28.25 | HK$56.39 | 49.9% |
Digital China Holdings (SEHK:861) | HK$3.25 | HK$6.15 | 47.1% |
Innovent Biologics (SEHK:1801) | HK$43.15 | HK$80.42 | 46.3% |
United Company RUSAL International (SEHK:486) | HK$2.35 | HK$4.25 | 44.7% |
DPC Dash (SEHK:1405) | HK$69.95 | HK$135.81 | 48.5% |
Weimob (SEHK:2013) | HK$1.28 | HK$2.56 | 50% |
We're going to check out a few of the best picks from our screener tool.
Innovent Biologics
Overview: Innovent Biologics, Inc. is a biopharmaceutical company that develops and commercializes monoclonal antibodies and other drug assets in oncology, ophthalmology, autoimmune, cardiovascular, and metabolic diseases in China with a market cap of HK$70.30 billion.
Operations: The company's biotechnology segment generated CN¥7.46 billion in revenue.
Estimated Discount To Fair Value: 46.3%
Innovent Biologics is trading at HK$43.15, significantly below its estimated fair value of HK$80.42, indicating potential undervaluation based on cash flows. Despite a net loss of CNY 392.62 million for the first half of 2024, revenue grew to CNY 3.95 billion from CNY 2.70 billion year-over-year. The company is expected to become profitable within three years and has recently received approval for Dupert®, a KRAS G12C inhibitor for NSCLC treatment in China, enhancing its growth prospects.
Sunny Optical Technology (Group)
Overview: Sunny Optical Technology (Group) Company Limited, with a market cap of HK$52.43 billion, is involved in designing, researching, developing, manufacturing, and selling optical and optical-related products as well as scientific instruments.