August 2024 SEHK Stocks Trading Below Estimated Fair Value

As global markets show signs of resilience, the Hong Kong market has been no exception, with the Hang Seng Index up 1.99% recently despite weaker-than-expected economic activity in China. This environment presents a unique opportunity to explore stocks trading below their estimated fair value. In this article, we will highlight three such undervalued stocks on the SEHK that could potentially offer investors attractive entry points given current market conditions.

Top 10 Undervalued Stocks Based On Cash Flows In Hong Kong

Name	Current Price	Fair Value (Est)	Discount (Est)
Best Pacific International Holdings (SEHK:2111)	HK$2.19	HK$4.36	49.8%
Bosideng International Holdings (SEHK:3998)	HK$3.95	HK$6.76	41.6%
ANTA Sports Products (SEHK:2020)	HK$67.95	HK$135.86	50%
BYD Electronic (International) (SEHK:285)	HK$30.10	HK$53.34	43.6%
Shanghai INT Medical Instruments (SEHK:1501)	HK$28.55	HK$56.11	49.1%
Pacific Textiles Holdings (SEHK:1382)	HK$1.58	HK$2.86	44.7%
WuXi XDC Cayman (SEHK:2268)	HK$18.92	HK$37.62	49.7%
iDreamSky Technology Holdings (SEHK:1119)	HK$2.27	HK$4.19	45.9%
Weimob (SEHK:2013)	HK$1.31	HK$2.25	41.7%
MicroPort CardioFlow Medtech (SEHK:2160)	HK$0.70	HK$1.37	49.1%

Click here to see the full list of 33 stocks from our Undervalued SEHK Stocks Based On Cash Flows screener.

Let's take a closer look at a couple of our picks from the screened companies.

iDreamSky Technology Holdings (SEHK:1119)

Overview: iDreamSky Technology Holdings Limited operates a digital entertainment platform that publishes games through mobile apps and websites in the People’s Republic of China, with a market cap of HK$3.80 billion.

Operations: The company's revenue segments include Game and Information Services (Incl. SaaS and Other Related Services), generating CN¥1.92 billion.

Estimated Discount To Fair Value: 45.9%

iDreamSky Technology Holdings is trading at HK$2.27, significantly below its estimated fair value of HK$4.19, indicating it is highly undervalued based on discounted cash flow analysis. Despite recent shareholder dilution from a follow-on equity offering raising HK$257.68 million, the company’s revenue is forecast to grow 29.8% per year, outpacing the Hong Kong market's average growth rate of 7.4%. Profitability is expected within three years with a high future return on equity projected at 24.8%.

• According our earnings growth report, there's an indication that iDreamSky Technology Holdings might be ready to expand.
• Take a closer look at iDreamSky Technology Holdings' balance sheet health here in our report.

IGG (SEHK:799)

Overview: IGG Inc, an investment holding company with a market cap of HK$2.85 billion, develops and operates mobile and online games across Asia, North America, Europe, and other international markets.

Operations: The company generates HK$5.27 billion in revenue from the development and operation of online games.

Estimated Discount To Fair Value: 40.3%

IGG Inc. is trading at HK$2.52, significantly below its estimated fair value of HK$4.22, making it highly undervalued based on discounted cash flow analysis. The company's earnings are expected to grow 51.17% annually over the next three years, outpacing the Hong Kong market's average growth rate of 11%. Recent amendments to company bylaws and the appointment of Ms. Feng Li as an independent non-executive director were approved at the AGM in May 2024.

• Insights from our recent growth report point to a promising forecast for IGG's business outlook.
• Click here and access our complete balance sheet health report to understand the dynamics of IGG.

Yeahka (SEHK:9923)

Overview: Yeahka Limited, an investment holding company with a market cap of HK$4.62 billion, provides payment and business services to merchants and consumers in the People’s Republic of China.

Operations: Revenue from business services amounted to CN¥3.95 billion.

Estimated Discount To Fair Value: 32%

Yeahka is trading at HK$10.78, 32% below its estimated fair value of HK$15.86, indicating it is undervalued based on discounted cash flow analysis. Earnings are forecast to grow 34% annually over the next three years, surpassing the Hong Kong market's average growth rate of 11%. However, profit margins have decreased from 4.5% last year to 0.3%. The recent appointment of Ms. Liang Shengtian as an executive director aims to strengthen risk management and digital strategy initiatives.

• In light of our recent growth report, it seems possible that Yeahka's financial performance will exceed current levels.
• Delve into the full analysis health report here for a deeper understanding of Yeahka.

Taking Advantage

• Investigate our full lineup of 33 Undervalued SEHK Stocks Based On Cash Flows right here.
• Already own these companies? Link your portfolio to Simply Wall St and get alerts on any new warning signs to your stocks.
• Elevate your portfolio with Simply Wall St, the ultimate app for investors seeking global market coverage.

Ready To Venture Into Other Investment Styles?

• 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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