Companies, such as China Greenfresh Group, trading at a market price below their true values are considered to be undervalued. Investors can determine how much a company is worth based on how much money they are expected to make in the future, or compared to the value of their peers. The list I’ve put together below are of stocks that compare favourably on all criteria, which potentially makes them good investments if you believe the price should eventually reflect the stock’s actual value.
China Greenfresh Group Co., Ltd. (SEHK:6183)
China GreenFresh Group Co., Ltd. engages in the cultivation and sale of fresh edible fungi products; and manufacture and sale of processed edible fungi products in the People’s Republic of China, Europe, North America, South America, rest of Asia, and Africa. Established in 1995, and headed by CEO Songhui Zheng, the company provides employment to 641 people and with the stock’s market cap sitting at HKD HK$1.38B, it comes under the small-cap stocks category.
6183’s stock is now floating at around -70% lower than its intrinsic level of ¥4.1, at a price tag of HK$1.24, based on my discounted cash flow model. The mismatch signals a potential chance to invest in 6183 at a discounted price. In terms of relative valuation, 6183’s PE ratio is trading at around 5.77x against its its Food peer level of, 14.2x meaning that relative to other stocks in the industry, you can purchase 6183’s stock for a lower price right now. 6183 is also robust in terms of financial health, with current assets covering liabilities in the near term and over the long run. 6183 also has a miniscule amount of debt on its balance sheet, which gives it headroom to grow and financial flexibility. More on China Greenfresh Group here.
Pacific Online Limited (SEHK:543)
Pacific Online Limited, an investment holding company, provides Internet advertising services in the People’s Republic of China. Started in 2007, and currently lead by Wai Yan Lam, the company size now stands at 1,369 people and with the market cap of HKD HK$1.23B, it falls under the small-cap stocks category.
543’s shares are currently floating at around -47% beneath its real value of ¥2.1, at a price of HK$1.12, according to my discounted cash flow model. This discrepancy gives us a chance to invest in 543 at a discount. Also, 543’s PE ratio is trading at around 9.64x relative to its Internet peer level of, 21.03x suggesting that relative to its competitors, 543’s stock can be bought at a cheaper price. 543 is also in good financial health, with near-term assets able to cover upcoming and long-term liabilities. 543 has zero debt on its books as well, meaning it has no long term debt obligations to worry about. Continue research on Pacific Online here.