Companies that are recently trading at a market price lower than their real values include Jiahua Stores Holdings and China Starch 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.

Jiahua Stores Holdings Limited (SEHK:602)

Jiahua Stores Holdings Limited, an investment holding company, operates and manages retail stores and other related businesses in the People’s Republic of China. Formed in 1995, and currently lead by Xiao Xiong Zhuang, the company employs 1,360 people and with the company’s market capitalisation at HKD HK$404.63M, we can put it in the small-cap stocks category.

602’s stock is currently hovering at around -45% less than its true value of ¥0.71, at the market price of HK$0.39, according to my discounted cash flow model. The mismatch signals a potential chance to invest in 602 at a discounted price. Moreover, 602’s PE ratio is around 8.07x compared to its Consumer Retailing peer level of, 15.03x indicating that relative to its comparable company group, we can invest in 602 at a lower price. 602 is also robust in terms of financial health, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. 602 also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. Continue research on Jiahua Stores Holdings here.

China Starch Holdings Limited (SEHK:3838)

China Starch Holdings Limited, an investment holding company, manufactures and sells cornstarch, lysine, starch-based sweetener, modified starch, and ancillary corn-based and corn-refined products. Formed in 2006, and headed by CEO Shijun Gao, the company now has 2,161 employees and with the stock’s market cap sitting at HKD HK$1.71B, it comes under the small-cap group.

3838’s shares are now hovering at around -67% beneath its intrinsic value of ¥0.84, at a price tag of HK$0.28, based on my discounted cash flow model. This difference in price and value gives us a chance to buy low. In addition to this, 3838’s PE ratio is currently around 4.22x against its its Food peer level of, 18.16x meaning that relative to its comparable set of companies, 3838’s shares can be purchased for a lower price. 3838 is also strong in terms of its financial health, as current assets can cover liabilities in the near term and over the long run. 3838 also has a miniscule amount of debt on its balance sheet, which gives it headroom to grow and financial flexibility. Dig deeper into China Starch Holdings here.