Chinese Exchange's Top 3 Value Picks For July 2024

As Chinese equities have faced recent declines due to unexpected rate cuts by the central bank and mixed economic data, investors are increasingly on the lookout for undervalued opportunities in this fluctuating market. Identifying stocks that offer strong fundamentals, resilient business models, and attractive valuations can be particularly advantageous in such an environment.

Top 10 Undervalued Stocks Based On Cash Flows In China

Name	Current Price	Fair Value (Est)	Discount (Est)
Imeik Technology DevelopmentLtd (SZSE:300896)	CN¥161.50	CN¥322.64	49.9%
Ningxia Baofeng Energy Group (SHSE:600989)	CN¥14.61	CN¥27.93	47.7%
Naipu Mining Machinery (SZSE:300818)	CN¥21.20	CN¥41.95	49.5%
Guangdong Shenling Environmental Systems (SZSE:301018)	CN¥19.56	CN¥38.02	48.6%
Thunder Software TechnologyLtd (SZSE:300496)	CN¥43.32	CN¥84.10	48.5%
China Film (SHSE:600977)	CN¥10.38	CN¥20.30	48.9%
Jiangsu Chuanzhiboke Education Technology (SZSE:003032)	CN¥8.68	CN¥17.20	49.5%
Seres GroupLtd (SHSE:601127)	CN¥75.62	CN¥149.49	49.4%
Beijing Aosaikang Pharmaceutical (SZSE:002755)	CN¥9.47	CN¥18.84	49.7%
Guangdong Fenghua Advanced Technology (Holding) (SZSE:000636)	CN¥14.21	CN¥27.70	48.7%

Click here to see the full list of 100 stocks from our Undervalued Chinese Stocks Based On Cash Flows screener.

Underneath we present a selection of stocks filtered out by our screen.

Jiugui Liquor (SZSE:000799)

Overview: Jiugui Liquor Co., Ltd. produces and sells liquor series products in China and internationally, with a market cap of CN¥13.26 billion.

Operations: The company's revenue segments include Alcohol Sales, which generated CN¥2.35 billion.

Estimated Discount To Fair Value: 42.1%

Jiugui Liquor is trading at CNY 40.8, significantly below its estimated fair value of CNY 70.45, making it highly undervalued based on discounted cash flow analysis. Despite a recent dividend decrease and lower profit margins this year (13.6% vs. 24.9% last year), the company's earnings are forecast to grow by 25.77% annually, outpacing the market's growth rate of 22.1%. However, its return on equity is projected to remain relatively low at 15.9%.

• Our growth report here indicates Jiugui Liquor may be poised for an improving outlook.
• Click here to discover the nuances of Jiugui Liquor with our detailed financial health report.

Guizhou Chanhen Chemical (SZSE:002895)

Overview: Guizhou Chanhen Chemical Corporation engages in the mining and beneficiation of phosphate, and processing phosphorus in China and internationally, with a market cap of CN¥8.89 billion.

Operations: The company's revenue segments include CN¥2.50 billion from phosphate mining and beneficiation, and CN¥3.20 billion from phosphorus processing.

Estimated Discount To Fair Value: 12.1%

Guizhou Chanhen Chemical, trading at CN¥16.5, is undervalued compared to its fair value estimate of CN¥18.78. Despite a dividend yield of 6.06% not being well covered by free cash flows and recent shareholder dilution, the company shows strong growth potential with earnings expected to grow 27.64% annually, surpassing the market's rate of 22.1%. However, its return on equity is forecasted to be relatively low at 19.1%.

• In light of our recent growth report, it seems possible that Guizhou Chanhen Chemical's financial performance will exceed current levels.
• Dive into the specifics of Guizhou Chanhen Chemical here with our thorough financial health report.

Gaona Aero Material (SZSE:300034)

Overview: Gaona Aero Material Co., Ltd. focuses on the research, development, production, and sale of intermetallic compounds and aluminum-magnesium-titanium materials in China with a market cap of CN¥11.98 billion.

Operations: Revenue from nonferrous metal extraction amounts to CN¥3.59 billion.

Estimated Discount To Fair Value: 41.6%

Gaona Aero Material, trading at CN¥15.45, is significantly undervalued compared to its fair value estimate of CN¥26.48. Despite a recent dividend decrease, the company shows strong growth potential with earnings expected to grow 26.52% annually and revenue forecasted to increase by 21.4% per year, both surpassing the market's rates. However, its return on equity is projected to be relatively low at 15%, and it has an unstable dividend track record.

• Our expertly prepared growth report on Gaona Aero Material implies its future financial outlook may be stronger than recent results.
• Click here and access our complete balance sheet health report to understand the dynamics of Gaona Aero Material.

Taking Advantage

• Get an in-depth perspective on all 100 Undervalued Chinese Stocks Based On Cash Flows by using our screener here.
• Already own these companies? Bring clarity to your investment decisions by linking up your portfolio with Simply Wall St, where you can monitor all the vital signs of your stocks effortlessly.
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Seeking Other Investments?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Diversify your portfolio with solid dividend payers offering reliable income streams to weather potential market turbulence.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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