Undervalued companies, such as Time Watch Investments and Shanghai Dasheng Agriculture Finance Technology, are those that trade at a price below their actual values. Smart investors can make money from this discrepancy by buying these shares, because they believe the current market prices will eventually move towards their true value. If you’re looking for capital gains in your next investment, I suggest you take a look at my list of potentially undervalued stocks.

Time Watch Investments Limited (SEHK:2033)

Time Watch Investments Limited, an investment holding company, operates as a manufacturer, brand-owner, and retailer of watches in the People’s Republic of China. The company employs 5200 people and has a market cap of HKD HK$2.27B, putting it in the mid-cap group.

2033’s shares are now trading at -54% beneath its intrinsic value of $2.35, at a price tag of HK$1.09, based on my discounted cash flow model. This mismatch signals an opportunity to buy 2033 shares at a discount. Also, 2033’s PE ratio is currently around 8.08x relative to its Luxury peer level of, 14.44x suggesting that relative to its competitors, we can buy 2033’s stock at a cheaper price today. 2033 is also robust in terms of financial health, with short-term assets covering liabilities in the near future as well as in the long run. It’s debt-to-equity ratio of 10.89% has been falling for the last couple of years showing 2033’s capacity to pay down its debt. Dig deeper into Time Watch Investments here.

Shanghai Dasheng Agriculture Finance Technology Co., Ltd. (SEHK:1103)

Shanghai Dasheng Agriculture Finance Technology Co., Ltd., together with its subsidiaries, trades in petrochemical products, and constructs roads and bridges in the People’s Republic of China. Founded in 1993, and now led by CEO Luojiang Mo, the company size now stands at 848 people and with the company’s market capitalisation at HKD HK$1.28B, we can put it in the small-cap group.

1103’s stock is currently trading at -44% beneath its real value of ¥0.24, at a price of HK$0.13, according to my discounted cash flow model. The discrepancy signals an opportunity to buy low. In terms of relative valuation, 1103’s PE ratio is currently around 2.68x relative to its Trade Distributors peer level of, 13.33x suggesting that relative to its peers, 1103’s stock can be bought at a cheaper price. 1103 is also strong financially, with short-term assets covering liabilities in the near future as well as in the long run. The stock’s debt-to-equity ratio of 65.97% has been dropping for the past few years demonstrating 1103’s capacity to pay down its debt. More detail on Shanghai Dasheng Agriculture Finance Technology here.

Fufeng Group Limited (SEHK:546)

Fufeng Group Limited, an investment holding company, engages in the manufacture and sale of fermentation-based food additive, and biochemical and starch-based products in the People’s Republic of China. Established in 1999, and currently lead by Qiang Zhao, the company employs 9,500 people and with the market cap of HKD HK$11.33B, it falls under the large-cap category.

546’s stock is now hovering at around -50% less than its intrinsic value of ¥8.92, at the market price of HK$4.45, based on its expected future cash flows. The difference between value and price signals a potential opportunity to buy 546 shares at a discount. Furthermore, 546’s PE ratio is trading at 6.27x compared to its Chemicals peer level of, 10.54x implying that relative to its competitors, you can buy 546’s shares at a cheaper price. 546 is also in good financial health, as current assets can cover liabilities in the near term and over the long run. It’s debt-to-equity ratio of 20.84% has been falling for the last couple of years revealing 546’s capability to pay down its debt. Continue research on Fufeng Group here.

For more financially sound, undervalued companies to add to your portfolio, explore this 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.