August 2024's Chinese Stocks That Could Be Trading Below Intrinsic Value Estimates

As of August 2024, Chinese stocks have experienced a mixed performance, with the Shanghai Composite and CSI 300 Indexes recording weekly declines amid a light economic calendar and caution ahead of major global economic events. Despite these challenges, there are opportunities to identify undervalued stocks that may be trading below their intrinsic value estimates. In the current market environment, identifying undervalued stocks involves looking for companies with strong fundamentals that are temporarily out of favor or overlooked by investors. This can present potential investment opportunities as the market adjusts to new information and conditions.

Top 10 Undervalued Stocks Based On Cash Flows In China

Name	Current Price	Fair Value (Est)	Discount (Est)
Proya CosmeticsLtd (SHSE:603605)	CN¥85.00	CN¥161.85	47.5%
Ningxia Baofeng Energy Group (SHSE:600989)	CN¥15.27	CN¥28.83	47%
Imeik Technology DevelopmentLtd (SZSE:300896)	CN¥141.30	CN¥273.38	48.3%
Shenzhen Megmeet Electrical (SZSE:002851)	CN¥22.10	CN¥41.36	46.6%
NINGBO HENGSHUAI (SZSE:300969)	CN¥62.67	CN¥116.93	46.4%
Jiangsu Sinopep-Allsino Biopharmaceutical (SHSE:688076)	CN¥61.45	CN¥122.01	49.6%
SKSHU PaintLtd (SHSE:603737)	CN¥27.40	CN¥51.74	47%
Eyebright Medical Technology (Beijing) (SHSE:688050)	CN¥73.61	CN¥137.97	46.6%
AVIC Industry-Finance Holdings (SHSE:600705)	CN¥2.17	CN¥4.03	46.1%
Beijing Aosaikang Pharmaceutical (SZSE:002755)	CN¥11.23	CN¥21.79	48.5%

Click here to see the full list of 110 stocks from our Undervalued Chinese Stocks Based On Cash Flows screener.

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

Suzhou Novosense Microelectronics (SHSE:688052)

Overview: Suzhou Novosense Microelectronics Co., Ltd. (SHSE:688052) operates in the semiconductor industry, focusing on the design and development of microelectronic components, with a market cap of CN¥13.39 billion.

Operations: Suzhou Novosense Microelectronics Co., Ltd. generates revenue from its semiconductor operations, specifically through the design and development of microelectronic components.

Estimated Discount To Fair Value: 10.4%

Suzhou Novosense Microelectronics reported a net loss of CNY 265.25 million for the first half of 2024, despite sales increasing to CNY 848.87 million from CNY 723.68 million in the previous year. The stock is trading at CN¥95, below its estimated fair value of CN¥106.04, and revenue is forecast to grow significantly faster than the market at 31.9% per year. Profitability is expected within three years, though recent volatility may concern some investors.

• Our earnings growth report unveils the potential for significant increases in Suzhou Novosense Microelectronics' future results.
• Delve into the full analysis health report here for a deeper understanding of Suzhou Novosense Microelectronics.

Shenzhen Breo Technology (SHSE:688793)

Overview: Shenzhen Breo Technology Co., Ltd. researches and develops portable massage products for headache swelling, eye fatigue, and shoulder and neck pain, with a market cap of CN¥2.60 billion.

Operations: The company's revenue segments include portable massage products designed to alleviate headache swelling, eye fatigue, and shoulder and neck pain.

Estimated Discount To Fair Value: 18%

Shenzhen Breo Technology is trading at CN¥30.92, below its estimated fair value of CN¥37.73, indicating it may be undervalued based on cash flows. Revenue is forecast to grow 20.6% per year, outpacing the market's 13.4%. Despite recent share price volatility, earnings are expected to grow 64.52% annually and become profitable within three years. The company completed a buyback of 1,597,167 shares for CN¥41.5 million by July 26, 2024.

• In light of our recent growth report, it seems possible that Shenzhen Breo Technology's financial performance will exceed current levels.
• Unlock comprehensive insights into our analysis of Shenzhen Breo Technology stock in this financial health report.

Shantui Construction Machinery (SZSE:000680)

Overview: Shantui Construction Machinery Co., Ltd. manufactures and sells construction machinery products both in China and internationally, with a market cap of CN¥10.27 billion.

Operations: Shantui Construction Machinery Co., Ltd. generates revenue from the sale of construction machinery products within China and internationally.

Estimated Discount To Fair Value: 23.3%

Shantui Construction Machinery's recent earnings report shows significant growth, with sales reaching CNY 6.51 billion and net income at CNY 418.47 million for the first half of 2024. The stock is trading at CN¥6.84, below its estimated fair value of CN¥8.92, suggesting undervaluation based on cash flows. Despite a volatile share price recently, earnings are forecast to grow significantly over the next three years, outpacing the market average.

• Our expertly prepared growth report on Shantui Construction Machinery implies its future financial outlook may be stronger than recent results.
• Dive into the specifics of Shantui Construction Machinery here with our thorough financial health report.

Seize The Opportunity

• Reveal the 110 hidden gems among our Undervalued Chinese Stocks Based On Cash Flows screener with a single click here.
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Interested In Other Possibilities?

• 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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