The professional services sector tends to be highly cyclical, impacting companies operating in areas ranging from airlines to auto parts and equipment to infrastructure. Currently, Changan Minsheng APLL Logistics and Xiamen International Port are transportation companies I’ve identified as potentially undervalued, meaning their share price is below what these companies are actually worth. There’s a few ways you can determine how much a cyclical company is actually worth. 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. The discrepancy between the price and value means investors have an opportunity to buy shares at a discount. Below are the stocks I believe are undervalued on all criteria, based on their latest financial data.

Changan Minsheng APLL Logistics Co., Ltd. (SEHK:1292)

Changan Minsheng APLL Logistics Co., Ltd., together with its subsidiaries, provides supply chain management services for automobiles and automobile raw materials, components, and parts in the People’s Republic of China. Started in 2001, and currently lead by Jinggang Shi, the company employs 7,948 people and with the market cap of HKD HK$831.39M, it falls under the small-cap group.

1292’s shares are currently hovering at around -83% under its true value of ¥30, at a price tag of HK$5.13, based on my discounted cash flow model. This mismatch indicates a chance to invest in 1292 at a discounted price. Additionally, 1292’s PE ratio stands at around 5.52x against its its Logistics peer level of, 17.83x implying that relative to its competitors, we can buy 1292’s stock at a cheaper price today. 1292 is also strong in terms of its financial health, as short-term assets amply cover upcoming and long-term liabilities. 1292 also has a miniscule amount of debt on its balance sheet, which gives it headroom to grow and financial flexibility. Continue research on Changan Minsheng APLL Logistics here.

Xiamen International Port Co., Ltd (SEHK:3378)

Xiamen International Port Co., Ltd operates port terminals primarily in Xiamen, the People’s Republic of China. Formed in 1998, and currently lead by Zhaohui Chen , the company currently employs 7,309 people and with the market cap of HKD HK$3.93B, it falls under the mid-cap category.

3378’s shares are currently hovering at around -83% lower than its true level of ¥8.52, at the market price of HK$1.44, based on my discounted cash flow model. The difference between value and price signals a potential opportunity to buy 3378 shares at a discount. What’s even more appeal is that 3378’s PE ratio is around 7.29x compared to its Infrastructure peer level of, 9.34x meaning that relative to its competitors, you can buy 3378 for a cheaper price. 3378 is also a financially healthy company, as short-term assets amply cover upcoming and long-term liabilities.