Undervalued companies, such as Hop Fung Group Holdings and Dahe Media, are those that trade at a price below their actual values. Investors can profit from the difference by investing in these stocks as the current market prices should eventually move towards their true values. If capital gains are what you’re after in your next investment, I’ve put together a list of undervalued stocks you may be interested in, based on the latest financial data from each company.

Hop Fung Group Holdings Limited (SEHK:2320)

Hop Fung Group Holdings Limited, an investment holding company, manufactures and sells corrugated paper-ware products in the People’s Republic of China. Founded in 1983, and currently headed by CEO Sum Tai Hui, the company employs 1,100 people and with the market cap of HKD HK$1.12B, it falls under the small-cap category.

2320’s stock is currently floating at around -52% under its actual worth of $2.92, at a price tag of $1.41, based on my discounted cash flow model. This mismatch indicates a chance to invest in 2320 at a discounted price. In terms of relative valuation, 2320’s PE ratio stands at 10.2x while its packaging peer level trades at 22.2x, suggesting that relative to its comparable set of companies, 2320 can be bought at a cheaper price right now. 2320 is also a financially healthy company, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. Finally, its debt relative to equity is 6%, which has been diminishing for the last couple of years demonstrating 2320’s capability to pay down its debt.

Dahe Media Co., Ltd. (SEHK:8243)

Dahe Media Co., Ltd., together with its subsidiaries, engages in outdoor media dissemination, terminal dissemination, outdoor advertising media production, and artwork trading businesses in the People’s Republic of China. Formed in 1994, and now led by CEO Hongxing Huang, the company currently employs 440 people and has a market cap of HKD HK$332.00M, putting it in the small-cap group.

8243’s stock is currently floating at around -74% less than its actual worth of ¥1.55, at a price of ¥0.4, based on my discounted cash flow model. This discrepancy signals a potential opportunity to buy 8243 shares at a low price. In terms of relative valuation, 8243’s PE ratio is trading at around 8.8x against its its media peer level of 17.3x, suggesting that relative to its peers, you can buy 8243’s shares at a cheaper price. 8243 is also a financially robust company, as current assets can cover liabilities in the near term and over the long run.

Water Oasis Group Limited (SEHK:1161)

Water Oasis Group Limited, an investment holding company, provides beauty and related wellness services. Formed in 1998, and currently lead by Siu Kei Tam, the company provides employment to 752 people and with the stock’s market cap sitting at HKD HK$734.83M, it comes under the small-cap stocks category.

1161’s stock is now hovering at around -63% below its intrinsic level of $2.61, at the market price of $0.96, based on my discounted cash flow model. This mismatch signals an opportunity to buy 1161 shares at a discount. Additionally, 1161’s PE ratio is currently around 10.6x relative to its consumer services peer level of 26.8x, indicating that relative to its competitors, 1161’s shares can be purchased for a lower price. 1161 is also strong in terms of its financial health, as near-term assets sufficiently cover liabilities in the near future as well as in the long run. It’s debt-to-equity ratio of 6% has been reducing for the last couple of years showing its ability to pay down its debt.

For more financially sound, undervalued companies to add to your portfolio, you can use our free platform to explore our interactive list of undervalued stocks.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.