Exploring Undervalued Opportunities On KRX With Discounts Ranging From 20% To 49.8%

The South Korean market has shown robust performance, with a 2.2% increase over the last week and an 11% rise over the past year, coupled with forecasts predicting annual earnings growth of 30%. In this environment, identifying stocks that are undervalued presents a strategic opportunity for investors seeking potential gains.

Top 10 Undervalued Stocks Based On Cash Flows In South Korea

Name	Current Price	Fair Value (Est)	Discount (Est)
Global Standard Technology (KOSDAQ:A083450)	₩18860.00	₩32401.81	41.8%
Revu (KOSDAQ:A443250)	₩10320.00	₩20627.39	50%
Anapass (KOSDAQ:A123860)	₩27100.00	₩48813.44	44.5%
NEXTIN (KOSDAQ:A348210)	₩63300.00	₩109691.04	42.3%
Global Tax Free (KOSDAQ:A204620)	₩3780.00	₩6203.01	39.1%
KidariStudio (KOSE:A020120)	₩4155.00	₩7287.98	43%
Genomictree (KOSDAQ:A228760)	₩22300.00	₩39380.82	43.4%
Lutronic (KOSDAQ:A085370)	₩36700.00	₩63217.94	41.9%
Shinsung E&GLtd (KOSE:A011930)	₩2015.00	₩4012.83	49.8%
SK Biopharmaceuticals (KOSE:A326030)	₩79000.00	₩149728.31	47.2%

Click here to see the full list of 36 stocks from our Undervalued KRX Stocks Based On Cash Flows screener.

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

Koh Young Technology (KOSDAQ:A098460)

Overview: Koh Young Technology Inc. specializes in the manufacturing and sale of automated inspection and precise measurement systems, operating both in South Korea and internationally, with a market capitalization of approximately ₩0.86 billion.

Operations: The company generates revenue primarily from the 3D inspection equipment manufacturing industry, totaling ₩214.98 million.

Estimated Discount To Fair Value: 20%

Koh Young Technology, trading at ₩13,110, is valued below our fair value estimate of ₩16,389.82, indicating a significant undervaluation. Despite recent earnings decline—Q1 sales dropped to ₩53.03 billion from ₩63.68 billion year-on-year with net income falling to ₩7.28 billion—the company's revenue and earnings are expected to outpace the South Korean market with forecasts of 13.4% and 36.6% growth per year respectively. However, challenges include a low forecasted return on equity of 13.1% in three years and an unstable dividend track record.

• The analysis detailed in our Koh Young Technology growth report hints at robust future financial performance.
• Get an in-depth perspective on Koh Young Technology's balance sheet by reading our health report here.

NEXON Games (KOSDAQ:A225570)

Overview: NEXON Games Co., Ltd. is a game developer with a market capitalization of approximately ₩1.24 trillion.

Operations: The company generates its revenue through game development.

Estimated Discount To Fair Value: 31.4%

NEXON Games, currently priced at ₩19,390, shows a notable undervaluation against its calculated fair value of ₩28.26 billion. Expected to turn profitable within three years, the company's projected revenue growth rate of 15% annually surpasses the Korean market average of 10.8%. However, its forecasted return on equity is relatively low at 14.1%, suggesting potential challenges in achieving higher profitability despite robust revenue increases and a significant anticipated earnings growth of 81.49% per year.

• Insights from our recent growth report point to a promising forecast for NEXON Games' business outlook.
• Navigate through the intricacies of NEXON Games with our comprehensive financial health report here.

Shinsung E&GLtd (KOSE:A011930)

Overview: Shinsung E&G Co., Ltd. operates in the production and distribution of solar modules and systems both domestically in Korea and internationally, with a market capitalization of approximately ₩410.19 billion.

Operations: The company generates revenue through the production and distribution of solar modules and systems across both domestic and international markets.

Estimated Discount To Fair Value: 49.8%

Shinsung E&G Ltd, priced at ₩2015, is significantly undervalued based on discounted cash flow analysis, with an estimated fair value of ₩4012.83. The company's earnings are projected to increase by 84.4% annually over the next three years, outpacing the Korean market's growth rate of 29.6%. However, its current profit margins have declined to 0.7% from last year’s 8.2%, and interest payments are poorly covered by earnings, indicating potential financial strain despite the growth forecast.

• Our growth report here indicates Shinsung E&GLtd may be poised for an improving outlook.
• Click to explore a detailed breakdown of our findings in Shinsung E&GLtd's balance sheet health report.

Key Takeaways

• Access the full spectrum of 36 Undervalued KRX Stocks Based On Cash Flows by clicking on this link.
• Invested in any of these stocks? Simplify your portfolio management with Simply Wall St and stay ahead with our alerts for any critical updates on your stocks.
• Simply Wall St is your key to unlocking global market trends, a free user-friendly app for forward-thinking investors.

Seeking Other Investments?

• 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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