3 Chinese Stocks Estimated To Be Undervalued In September 2024

As of September 2024, Chinese stocks have seen declines driven by weak inflation data and concerns about a potential downward price-wage spiral affecting the economy. Despite these challenges, some stocks are estimated to be undervalued, presenting potential opportunities for investors. In the current market environment, identifying undervalued stocks involves looking for companies with strong fundamentals that may be temporarily overlooked due to broader economic concerns.

Top 10 Undervalued Stocks Based On Cash Flows In China

Name	Current Price	Fair Value (Est)	Discount (Est)
Jiayou International LogisticsLtd (SHSE:603871)	CN¥18.12	CN¥35.59	49.1%
Zhongji Innolight (SZSE:300308)	CN¥115.94	CN¥231.31	49.9%
Ningxia Baofeng Energy Group (SHSE:600989)	CN¥14.45	CN¥28.75	49.7%
Yantai Zhenghai Magnetic Material (SZSE:300224)	CN¥8.10	CN¥15.64	48.2%
Beijing SDL TechnologyLtd (SZSE:002658)	CN¥5.40	CN¥10.60	49%
NBTM New Materials Group (SHSE:600114)	CN¥14.26	CN¥27.15	47.5%
Shandong Bailong Chuangyuan Bio-Tech (SHSE:605016)	CN¥16.83	CN¥33.11	49.2%
Jiangsu Hongdou IndustrialLTD (SHSE:600400)	CN¥2.08	CN¥4.10	49.3%
SKSHU PaintLtd (SHSE:603737)	CN¥26.87	CN¥52.53	48.9%
Hiconics Eco-energy Technology (SZSE:300048)	CN¥4.36	CN¥8.72	50%

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

We're going to check out a few of the best picks from our screener tool.

Ningxia Baofeng Energy Group (SHSE:600989)

Overview: Ningxia Baofeng Energy Group Co., Ltd. engages in the production, processing, and sale of coal mining, washing, coking, coal tar, crude benzene, C4 deep-processed products, methanol, and olefin products with a market cap of CN¥105.97 billion.

Operations: The company's revenue segments include Coking Products (CN¥14.15 billion), Olefin Products (CN¥19.16 billion), and Fine Chemical Products (CN¥4.08 billion).

Estimated Discount To Fair Value: 49.7%

Ningxia Baofeng Energy Group appears undervalued based on cash flows, trading at CN¥14.45, significantly below its estimated fair value of CN¥28.75. Recent earnings reports show strong performance with half-year sales reaching CN¥16.90 billion and net income at CN¥3.30 billion, up from the previous year’s figures. Earnings are forecast to grow 31.86% annually over the next three years, outpacing market expectations and indicating potential for substantial returns despite high debt levels and a dividend not fully covered by free cash flows.

• Upon reviewing our latest growth report, Ningxia Baofeng Energy Group's projected financial performance appears quite optimistic.
• Unlock comprehensive insights into our analysis of Ningxia Baofeng Energy Group stock in this financial health report.

Jiangsu Boqian New Materials Stock (SHSE:605376)

Overview: Jiangsu Boqian New Materials Stock Co., Ltd. operates in the materials sector with a market cap of CN¥5.40 billion.

Operations: Jiangsu Boqian New Materials Stock Co., Ltd. generates revenue from various segments in the materials sector, totaling CN¥5.40 billion.

Estimated Discount To Fair Value: 21.4%

Jiangsu Boqian New Materials Stock appears undervalued based on cash flows, trading at CN¥20.64, below its estimated fair value of CN¥26.26. Recent earnings reports show robust growth with half-year sales at CN¥438.31 million and net income rising to CN¥54.58 million from last year’s figures. Despite high volatility in share price and a dividend not well covered by earnings or free cash flows, the company's earnings are forecast to grow significantly faster than the market over the next three years.

• Our comprehensive growth report raises the possibility that Jiangsu Boqian New Materials Stock is poised for substantial financial growth.
• Get an in-depth perspective on Jiangsu Boqian New Materials Stock's balance sheet by reading our health report here.

Shanghai SK Automation TechnologyLtd (SHSE:688155)

Overview: Shanghai SK Automation Technology Co., Ltd specializes in the research, development, production, and sale of intelligent manufacturing equipment for new energy and fuel vehicles, with a market cap of CN¥4.16 billion.

Operations: The company's revenue segments include the research, development, production, and sale of intelligent manufacturing equipment for new energy and fuel vehicles.

Estimated Discount To Fair Value: 28.4%

Shanghai SK Automation Technology Ltd. is trading at CN¥33.3, significantly below its estimated fair value of CN¥46.5, indicating it may be undervalued based on cash flows. Recent earnings reports for the first half of 2024 show net income surged to CN¥129.57 million from last year's CN¥5.73 million, despite a slight dip in sales to CN¥1.17 billion from CN¥1.19 billion. Forecasts suggest robust revenue and earnings growth, outpacing the broader Chinese market significantly over the next three years.

• Our earnings growth report unveils the potential for significant increases in Shanghai SK Automation TechnologyLtd's future results.
• Click here to discover the nuances of Shanghai SK Automation TechnologyLtd with our detailed financial health report.

Turning Ideas Into Actions

• Dive into all 110 of the Undervalued Chinese Stocks Based On Cash Flows we have identified here.
• Shareholder in one or more of these companies? Ensure you're never caught off-guard by adding your portfolio in Simply Wall St for timely alerts on significant stock developments.
• Streamline your investment strategy with Simply Wall St's app for free and benefit from extensive research on stocks across all corners of the world.

Curious About Other Options?

• 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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