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The Hong Kong stock market has experienced a significant boost recently, driven by China's robust stimulus measures aimed at revitalizing its economy. This positive sentiment has led to a notable rally in the Hang Seng Index, reflecting increased investor confidence. In this context, identifying undervalued stocks—those priced below their intrinsic estimates—can present unique opportunities for investors looking to capitalize on market inefficiencies.
Top 10 Undervalued Stocks Based On Cash Flows In Hong Kong
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| BYD Electronic (International) (SEHK:285) | HK$32.55 | HK$64.37 | 49.4% |
| Giant Biogene Holding (SEHK:2367) | HK$50.95 | HK$97.86 | 47.9% |
| Alibaba Health Information Technology (SEHK:241) | HK$5.35 | HK$10.01 | 46.6% |
| XD (SEHK:2400) | HK$25.50 | HK$47.73 | 46.6% |
| China Ruyi Holdings (SEHK:136) | HK$2.26 | HK$4.15 | 45.6% |
| Shanghai INT Medical Instruments (SEHK:1501) | HK$28.70 | HK$56.39 | 49.1% |
| Zylox-Tonbridge Medical Technology (SEHK:2190) | HK$13.00 | HK$25.92 | 49.9% |
| Digital China Holdings (SEHK:861) | HK$2.96 | HK$5.85 | 49.4% |
| Akeso (SEHK:9926) | HK$68.60 | HK$134.06 | 48.8% |
| Hua Hong Semiconductor (SEHK:1347) | HK$20.90 | HK$38.48 | 45.7% |
Underneath we present a selection of stocks filtered out by our screen.
China Ruyi Holdings
Overview: China Ruyi Holdings Limited is an investment holding company involved in content production and online streaming across China, Hong Kong, Europe, and internationally, with a market cap of HK$28.26 billion.
Operations: The company generates revenue primarily from its content production business, which brought in CN¥1.63 billion, and its online streaming and gaming businesses, which contributed CN¥3.01 billion.
Estimated Discount To Fair Value: 45.6%
China Ruyi Holdings is trading at HK$2.26, significantly below its estimated fair value of HK$4.15, indicating potential undervaluation based on cash flows. Despite a net loss of CNY 114.65 million for the recent half-year, the company’s earnings are forecast to grow 17.57% annually, outpacing the Hong Kong market's 12.2%. However, profit margins have declined from 25.8% to 18%, and shareholders faced dilution over the past year.
AAC Technologies Holdings
Overview: AAC Technologies Holdings Inc. is an investment holding company that provides solutions for smart devices across various regions including Mainland China, Hong Kong, Taiwan, other Asian countries, the United States, and Europe with a market cap of HK$38.23 billion.