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As global markets continue to navigate economic uncertainties, the Hong Kong stock market has shown resilience with the Hang Seng Index gaining 1.99% recently. In this environment, identifying undervalued stocks can offer potential opportunities for investors looking to capitalize on market inefficiencies. In this article, we will explore three stocks listed on the SEHK that are estimated to be undervalued as of August 2024. These selections are based on their strong fundamentals and potential for growth amid current market conditions.
Top 10 Undervalued Stocks Based On Cash Flows In Hong Kong
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Best Pacific International Holdings (SEHK:2111) | HK$2.25 | HK$4.36 | 48.4% |
| Bosideng International Holdings (SEHK:3998) | HK$3.94 | HK$6.73 | 41.4% |
| ANTA Sports Products (SEHK:2020) | HK$68.10 | HK$135.25 | 49.6% |
| BYD Electronic (International) (SEHK:285) | HK$29.90 | HK$53.07 | 43.7% |
| Shanghai INT Medical Instruments (SEHK:1501) | HK$28.60 | HK$55.84 | 48.8% |
| Pacific Textiles Holdings (SEHK:1382) | HK$1.61 | HK$2.86 | 43.6% |
| WuXi XDC Cayman (SEHK:2268) | HK$19.04 | HK$37.44 | 49.1% |
| iDreamSky Technology Holdings (SEHK:1119) | HK$2.25 | HK$4.17 | 46.1% |
| Weimob (SEHK:2013) | HK$1.22 | HK$2.19 | 44.3% |
| MicroPort CardioFlow Medtech (SEHK:2160) | HK$0.72 | HK$1.37 | 47.4% |
We're going to check out a few of the best picks from our screener tool.
ESR Group
Overview: ESR Group Limited, with a market cap of HK$48.14 billion, is involved in logistics real estate development, leasing, and management across various regions including Hong Kong, China, Japan, South Korea, Australia, New Zealand, Southeast Asia, India, Europe and other international markets.
Operations: The company's revenue segments include Fund Management ($774.64 million) and New Economy Development ($105.48 million).
Estimated Discount To Fair Value: 22.5%
ESR Group is trading at HK$11.34, which is 22.5% below its estimated fair value of HK$14.64, making it highly undervalued based on discounted cash flow analysis. Despite a forecasted net loss of US$210 million for H1 2024 due to non-cash asset revaluations and lack of promote fee income, the company's earnings are expected to grow significantly at 26.3% per year over the next three years, outpacing the Hong Kong market's growth rate.
WuXi XDC Cayman
Overview: WuXi XDC Cayman Inc. is an investment holding company that provides contract research, development, and manufacturing services globally, with a market cap of HK$22.80 billion.