3 SEHK Stocks That Might Be Trading Below Their True Value

Amidst a backdrop of global market volatility and mixed economic signals, the Hong Kong market has shown resilience, with the Hang Seng Index recently gaining 0.85%. As investors navigate these uncertain times, identifying undervalued stocks can be a strategic move to potentially capitalize on future growth. In such conditions, stocks that exhibit strong fundamentals yet trade below their intrinsic value present compelling opportunities for discerning investors.

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$2.22	HK$4.35	49%
Bosideng International Holdings (SEHK:3998)	HK$3.88	HK$6.76	42.6%
Wasion Holdings (SEHK:3393)	HK$6.40	HK$10.90	41.3%
BYD Electronic (International) (SEHK:285)	HK$29.15	HK$53.18	45.2%
Shanghai INT Medical Instruments (SEHK:1501)	HK$28.60	HK$56.13	49%
Pacific Textiles Holdings (SEHK:1382)	HK$1.58	HK$2.85	44.6%
iDreamSky Technology Holdings (SEHK:1119)	HK$2.21	HK$4.19	47.2%
China Renaissance Holdings (SEHK:1911)	HK$7.27	HK$12.30	40.9%
Weimob (SEHK:2013)	HK$1.19	HK$2.18	45.4%
MicroPort CardioFlow Medtech (SEHK:2160)	HK$0.72	HK$1.38	47.7%

Click here to see the full list of 31 stocks from our Undervalued SEHK Stocks Based On Cash Flows screener.

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

BYD Electronic (International) (SEHK:285)

Overview: BYD Electronic (International) Company Limited, with a market cap of HK$66.13 billion, is an investment holding company that focuses on the design, manufacture, assembly, and sale of mobile handset components and modules both in the People’s Republic of China and internationally.

Operations: In the fiscal year, the company generated CN¥129.96 billion from manufacturing, assembling, and selling mobile handset components and modules.

Estimated Discount To Fair Value: 45.2%

BYD Electronic (International) is trading at HK$29.15, significantly below its estimated fair value of HK$53.21, indicating it may be undervalued based on cash flows. The company's earnings are forecast to grow 22.3% annually over the next three years, outpacing the Hong Kong market's 11.3%. Recently added to the Hang Seng Index and having announced a final dividend of RMB 0.538 per share, BYD Electronic shows potential for strong future performance despite lower projected revenue growth rates compared to peers.

• Upon reviewing our latest growth report, BYD Electronic (International)'s projected financial performance appears quite optimistic.
• Delve into the full analysis health report here for a deeper understanding of BYD Electronic (International).

Wasion Holdings (SEHK:3393)

Overview: Wasion Holdings Limited is an investment holding company that focuses on the research, development, production, and sale of energy metering and energy efficiency management solutions for energy supply industries across various regions including China, Africa, the United States, Europe, and other parts of Asia; it has a market cap of HK$6.52 billion.

Operations: The company generates revenue from three main segments: Advanced Distribution Operations (CN¥2.48 billion), Power Advanced Metering Infrastructure (CN¥2.67 billion), and Communication and Fluid Advanced Metering Infrastructure (CN¥2.21 billion).

Estimated Discount To Fair Value: 41.3%

Wasion Holdings is trading at HK$6.40, well below its estimated fair value of HK$10.90, suggesting it is undervalued based on cash flows. Recent contract wins in Hungary, Singapore, and Malaysia totaling over HKD 386 million highlight its expanding international footprint. Earnings grew by 61% last year and are forecast to grow 25.8% annually over the next three years, outpacing the Hong Kong market's growth rate. However, the company has an unstable dividend track record and a low forecasted return on equity of 16.6%.

• Our expertly prepared growth report on Wasion Holdings implies its future financial outlook may be stronger than recent results.
• Navigate through the intricacies of Wasion Holdings with our comprehensive financial health report here.

Inspur Digital Enterprise Technology (SEHK:596)

Overview: Inspur Digital Enterprise Technology Limited (SEHK:596) is an investment holding company that offers software development, other software services, and cloud services in the People's Republic of China, with a market cap of HK$4.01 billion.

Operations: The company's revenue segments include CN¥2.00 billion from Cloud Services, CN¥2.47 billion from Management Software, and CN¥3.83 billion from Internet of Things (IoT) Solutions.

Estimated Discount To Fair Value: 38.5%

Inspur Digital Enterprise Technology is trading at HK$3.51, significantly below its estimated fair value of HK$5.70, indicating it is highly undervalued based on cash flows. The company’s revenue and earnings are forecast to grow at 21.8% and 38% per year respectively, both outpacing the Hong Kong market averages of 7.4% and 11.3%. Despite this growth potential, the forecasted return on equity remains modest at 19.7%.

• Our comprehensive growth report raises the possibility that Inspur Digital Enterprise Technology is poised for substantial financial growth.
• Click here to discover the nuances of Inspur Digital Enterprise Technology with our detailed financial health report.

Seize The Opportunity

• Investigate our full lineup of 31 Undervalued SEHK Stocks Based On Cash Flows right 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.
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Want To Explore Some Alternatives?

• 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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