Zuoli Kechuang Micro-Finance and Hong Kong International Construction Investment Management Group are two of the stocks I have identified as undervalued. This means their current share prices are trading at levels less than what the companies are actually worth. 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.

Zuoli Kechuang Micro-Finance Company Limited (SEHK:6866)

Zuoli Kechuang Micro-finance Company Limited operates as a microfinance company in the People’s Republic of China. Formed in 2011, and now led by CEO Haifeng Hu, the company employs 133 people and with the stock’s market cap sitting at HKD HK$1.07B, it comes under the small-cap group.

6866’s stock is now hovering at around -58% beneath its actual level of ¥2.15, at the market price of HK$0.91, according to my discounted cash flow model. This discrepancy gives us a chance to invest in 6866 at a discount. In terms of relative valuation, 6866’s PE ratio is currently around 5.63x compared to its Consumer Finance peer level of, 7.38x suggesting that relative to its peers, we can invest in 6866 at a lower price. 6866 is also in great financial shape, as current assets can cover liabilities in the near term and over the long run. The stock’s debt-to-equity ratio of 32.87% has been diminishing over the past couple of years signifying 6866’s ability to pay down its debt. Interested in Zuoli Kechuang Micro-Finance? Find out more here.

Hong Kong International Construction Investment Management Group Co., Limited (SEHK:687)

Hong Kong International Construction Investment Management Group Co., Limited, an investment holding company, engages in foundation piling; property investment, development, and management; and machinery leasing and trading activities in the People’s Republic of China. The company employs 1270 people and has a market cap of HKD HK$7.35B, putting it in the mid-cap group.

687’s stock is currently hovering at around -62% under its actual worth of $5.64, at a price of HK$2.16, according to my discounted cash flow model. The divergence signals an opportunity to buy 687 shares at a low price. Moreover, 687’s PE ratio is currently around 11.82x while its Construction peer level trades at, 11.9x suggesting that relative to its comparable company group, 687’s shares can be purchased for a lower price. 687 is also in great financial shape, with near-term assets able to cover upcoming and long-term liabilities. It’s debt-to-equity ratio of 16.06% has been falling for the last couple of years indicating its ability to pay down its debt. Continue research on Hong Kong International Construction Investment Management Group here.