Chengdu PUTIAN Telecommunications Cable and ZMFY Automobile Glass Services are companies that are currently trading below what they’re actually worth. There’s a few ways you can value a company. The most popular methods include discounting the company’s cash flows it is expected to create in the future, or comparing its price to its peers or the value of its assets. Analysing the most recent financial data, I’ve created a list of companies that compare favourably in all criteria, making them potentially good investments.
Chengdu PUTIAN Telecommunications Cable Company Limited (SEHK:1202)
Chengdu PUTIAN Telecommunications Cable Company Limited, together with its subsidiaries, manufactures and sells telecommunications cables in the People’s Republic of China. Established in 1994, and currently run by Micheng Wang, the company currently employs 979 people and with the stock’s market cap sitting at HKD HK$404.00M, it comes under the small-cap stocks category.
1202’s stock is currently floating at around -73% under its true level of ¥3.78, at a price tag of HK$1.01, according to my discounted cash flow model. This mismatch signals an opportunity to buy 1202 shares at a discount. In addition to this, 1202’s PE ratio is trading at 10.99x relative to its Communications peer level of, 14.14x indicating that relative to its peers, 1202’s stock can be bought at a cheaper price. 1202 is also robust in terms of financial health, with current assets covering liabilities in the near term and over the long run. More on Chengdu PUTIAN Telecommunications Cable here.
ZMFY Automobile Glass Services Limited (SEHK:8135)
ZMFY Automobile Glass Services Limited, an investment holding company, engages in the sale of automobile glass with installation/repair services for private and public motor vehicles in the People’s Republic of China. Started in 1999, and currently headed by CEO Xiufeng Xia, the company provides employment to 445 people and with the stock’s market cap sitting at HKD HK$261.76M, it comes under the small-cap stocks category.
8135’s stock is now trading at -68% beneath its actual worth of ¥1.04, at a price tag of HK$0.33, according to my discounted cash flow model. The divergence signals an opportunity to buy 8135 shares at a low price. In addition to this, 8135’s PE ratio stands at 7.32x against its its Specialty Retail peer level of, 13.73x implying that relative to its comparable company group, you can buy 8135’s shares at a cheaper price. 8135 is also in great financial shape, as current assets can cover liabilities in the near term and over the long run. 8135 also has a miniscule amount of debt on its balance sheet, which gives it headroom to grow and financial flexibility. Continue research on ZMFY Automobile Glass Services here.
Tianyun International Holdings Limited (SEHK:6836)
Tianyun International Holdings Limited, an investment holding company, produces and sells processed fruit products; and trades fresh fruits in the People’s Republic of China and internationally. Formed in 2003, and currently headed by CEO Ziyuan Yang, the company now has 624 employees and with the company’s market cap sitting at HKD HK$1.25B, it falls under the small-cap stocks category.
6836’s stock is currently trading at -74% under its intrinsic value of ¥4.87, at a price tag of HK$1.28, based on its expected future cash flows. This mismatch signals an opportunity to buy 6836 shares at a discount. What’s even more appeal is that 6836’s PE ratio is trading at around 8.37x while its Food peer level trades at, 16.4x implying that relative to other stocks in the industry, 6836’s shares can be purchased for a lower price. 6836 is also in great financial shape, as current assets can cover liabilities in the near term and over the long run. Finally, its debt relative to equity is 21.60%, which has been declining for the past few years indicating 6836’s ability to pay down its debt. Interested in Tianyun International Holdings? Find out more here.
For more financially sound, undervalued companies to add to your portfolio, explore this interactive list of undervalued stocks.