3 KRX Stocks That Could Be Trading Below Fair Value

Over the last 7 days, the South Korean market has dropped 2.8%, and it has declined by 3.9% over the past year, despite earnings being forecast to grow by 29% annually. In this environment, identifying stocks that are trading below their fair value can present unique opportunities for investors looking to capitalize on potential growth.

Top 10 Undervalued Stocks Based On Cash Flows In South Korea

Name	Current Price	Fair Value (Est)	Discount (Est)
APR (KOSE:A278470)	₩293500.00	₩522720.35	43.9%
HD Korea Shipbuilding & Offshore Engineering (KOSE:A009540)	₩171800.00	₩305366.43	43.7%
Cosmecca Korea (KOSDAQ:A241710)	₩88400.00	₩153324.32	42.3%
Intellian Technologies (KOSDAQ:A189300)	₩49500.00	₩91043.49	45.6%
Oscotec (KOSDAQ:A039200)	₩36250.00	₩65583.14	44.7%
Shinsung E&GLtd (KOSE:A011930)	₩1650.00	₩2967.29	44.4%
Global Tax Free (KOSDAQ:A204620)	₩3650.00	₩6423.99	43.2%
Hotel ShillaLtd (KOSE:A008770)	₩45550.00	₩82926.72	45.1%
Hd Hyundai MipoLtd (KOSE:A010620)	₩95100.00	₩171213.75	44.5%
Kakao Games (KOSDAQ:A293490)	₩16900.00	₩29661.83	43%

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

We'll examine a selection from our screener results.

YG Entertainment (KOSDAQ:A122870)

Overview: YG Entertainment Inc. operates as an entertainment company in South Korea, Japan, and internationally with a market cap of ₩593.50 billion.

Operations: The company generates revenue primarily from its entertainment segment, amounting to ₩493.91 billion.

Estimated Discount To Fair Value: 21%

YG Entertainment is trading 21% below its estimated fair value of ₩40,523.91, making it highly undervalued based on discounted cash flow analysis. Despite recent financial setbacks, including a net loss of KRW 1.57 billion for the first half of 2024, revenue is forecast to grow at 17.1% per year, outpacing the market average. Analysts expect significant earnings growth over the next three years and anticipate a stock price rise by 50%.

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

SK hynix (KOSE:A000660)

Overview: SK hynix Inc., with a market cap of ₩108.25 trillion, manufactures, distributes, and sells semiconductor products across Korea, China, the rest of Asia, the United States, and Europe.

Operations: The company generated ₩49.22 billion from the manufacture and sale of semiconductor products.

Estimated Discount To Fair Value: 16.3%

SK hynix is trading 16.3% below its estimated fair value of ₩203,101.42, indicating potential undervaluation based on discounted cash flow analysis. The company reported a net income of KRW 6.04 billion for the first half of 2024, a significant turnaround from last year's loss. Revenue is expected to grow at 22.6% annually, outpacing the market average, with earnings forecasted to increase by 49.2% per year over the next three years.

• Insights from our recent growth report point to a promising forecast for SK hynix's business outlook.
• Get an in-depth perspective on SK hynix's balance sheet by reading our health report here.

HD Hyundai Electric (KOSE:A267260)

Overview: HD Hyundai Electric Co., Ltd. manufactures and sells electrical equipment in South Korea and has a market cap of ₩10.01 trillion.

Operations: The company generates revenue primarily from the sale of electric equipment, amounting to ₩3.21 trillion.

Estimated Discount To Fair Value: 37.5%

HD Hyundai Electric is trading at ₩289,500, significantly below its estimated fair value of ₩463,184.72 based on discounted cash flow analysis. Earnings grew by 109.3% over the past year, with second-quarter net income reaching KRW 161.50 billion compared to KRW 37.70 billion a year ago. Despite high share price volatility and slower revenue growth forecasts (14.8% per year), the stock remains undervalued and analysts expect a potential price increase of 49.6%.

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

Key Takeaways

• Unlock more gems! Our Undervalued KRX Stocks Based On Cash Flows screener has unearthed 30 more companies for you to explore.Click here to unveil our expertly curated list of 33 Undervalued KRX Stocks Based On Cash Flows.
• Are these companies part of your investment strategy? Use Simply Wall St to consolidate your holdings into a portfolio and gain insights with our comprehensive analysis tools.
• Enhance your investing ability with the Simply Wall St app and enjoy free access to essential market intelligence spanning every continent.

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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