3 SEHK Stocks That Could Be Undervalued By Up To 38.5%

The Hong Kong market has experienced notable volatility recently, with the Hang Seng Index gaining 0.85% amid mixed economic signals from China. As investors navigate these turbulent waters, identifying undervalued stocks can offer potential opportunities for growth. In this context, a good stock is typically characterized by strong fundamentals and resilience to market fluctuations, making it a compelling choice for value-focused investors.

Top 10 Undervalued Stocks Based On Cash Flows In Hong Kong

Name	Current Price	Fair Value (Est)	Discount (Est)
Bosideng International Holdings (SEHK:3998)	HK$3.87	HK$6.98	44.6%
BYD Electronic (International) (SEHK:285)	HK$29.45	HK$53.00	44.4%
Inspur Digital Enterprise Technology (SEHK:596)	HK$3.36	HK$5.69	40.9%
Shanghai INT Medical Instruments (SEHK:1501)	HK$28.55	HK$56.02	49%
Pacific Textiles Holdings (SEHK:1382)	HK$1.64	HK$2.93	44%
iDreamSky Technology Holdings (SEHK:1119)	HK$2.25	HK$4.19	46.2%
China Renaissance Holdings (SEHK:1911)	HK$7.27	HK$12.30	40.9%
Weimob (SEHK:2013)	HK$1.17	HK$2.16	45.9%
Hua Hong Semiconductor (SEHK:1347)	HK$18.48	HK$36.83	49.8%
MicroPort CardioFlow Medtech (SEHK:2160)	HK$0.72	HK$1.37	47.6%

Click here to see the full list of 30 stocks from our Undervalued SEHK Stocks Based On Cash Flows screener.

Let's uncover some gems from our specialized screener.

Everest Medicines (SEHK:1952)

Overview: Everest Medicines Limited (SEHK:1952) is a biopharmaceutical company focused on the discovery, licensing, development, and commercialization of therapies and vaccines for critical unmet medical needs in Greater China and other Asia Pacific markets, with a market cap of HK$6.23 billion.

Operations: Everest Medicines generates its revenue primarily from the pharmaceuticals segment, amounting to CN¥125.93 million.

Estimated Discount To Fair Value: 24.7%

Everest Medicines, trading at HK$19.42, is significantly undervalued based on a discounted cash flow analysis, with an estimated fair value of HK$25.78. The company is expected to achieve above-market profit growth over the next three years and has forecasted revenue growth of 37.8% per year, outpacing the Hong Kong market average. Recent product-related announcements indicate strong progress in clinical trials and regulatory approvals for key treatments like zetomipzomib and NEFECON®.

• Our growth report here indicates Everest Medicines may be poised for an improving outlook.
• Navigate through the intricacies of Everest Medicines with our comprehensive financial health report here.

XD (SEHK:2400)

Overview: XD Inc. is an investment holding company that develops, publishes, operates, and distributes mobile and web games in Mainland China and internationally, with a market cap of HK$9.56 billion.

Operations: The company's revenue segments include CN¥2.09 billion from games and CN¥1.30 billion from the TapTap platform.

Estimated Discount To Fair Value: 38.5%

XD Inc. is trading at HK$20.25, significantly undervalued compared to its estimated fair value of HK$32.93 based on discounted cash flow analysis. The company projects a revenue increase to RMB 2.18 billion–RMB 2.23 billion for the first half of 2024, driven by new game launches and higher information services revenue from TapTap PRC, despite some declines in existing games' revenues. Expected net profit growth ranges between RMB 220 million and RMB 270 million, reflecting improved gross margins but higher marketing expenses.

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

Techtronic Industries (SEHK:669)

Overview: Techtronic Industries Company Limited designs, manufactures, and markets power tools, outdoor power equipment, and floorcare and cleaning products globally with a market cap of HK$182.52 billion.

Operations: The company's revenue segments include $13.23 billion from Power Equipment and $965.09 million from Floorcare & Cleaning products.

Estimated Discount To Fair Value: 32.3%

Techtronic Industries appears undervalued based on discounted cash flow analysis, trading at HK$99.6 compared to an estimated fair value of HK$147.04. The company reported half-year sales of US$7.31 billion and net income of US$550.37 million, reflecting solid financial performance and strong cash flows. Recent executive changes, including the appointment of Steven Richman as CEO, may enhance strategic direction. Additionally, a share repurchase program aims to improve earnings per share and net asset value per share further supporting its undervaluation thesis.

• The growth report we've compiled suggests that Techtronic Industries' future prospects could be on the up.
• Click to explore a detailed breakdown of our findings in Techtronic Industries' balance sheet health report.

Key Takeaways

• Investigate our full lineup of 30 Undervalued SEHK Stocks Based On Cash Flows right here.
• Got skin in the game with these stocks? Elevate how you manage them by using Simply Wall St's portfolio, where intuitive tools await to help optimize your investment outcomes.
• Simply Wall St is your key to unlocking global market trends, a free user-friendly app for forward-thinking investors.

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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