July 2024 Insights Into Three SGX Stocks Estimated To Be Undervalued

As of July 2024, the Singapore stock market continues to navigate through a complex economic landscape, marked by cautious optimism among investors. This environment sets the stage for identifying potentially undervalued stocks that may offer attractive opportunities for those looking to diversify their portfolios in line with current market conditions.

Top 5 Undervalued Stocks Based On Cash Flows In Singapore

Name	Current Price	Fair Value (Est)	Discount (Est)
Singapore Technologies Engineering (SGX:S63)	SGD4.41	SGD7.44	40.8%
17LIVE Group (SGX:LVR)	SGD0.82	SGD1.53	46.4%
Hongkong Land Holdings (SGX:H78)	US$3.34	US$5.72	41.6%
Winking Studios (Catalist:WKS)	SGD0.30	SGD0.51	41.2%
Frasers Logistics & Commercial Trust (SGX:BUOU)	SGD0.985	SGD1.67	40.9%
Digital Core REIT (SGX:DCRU)	US$0.595	US$0.76	22.2%
Seatrium (SGX:5E2)	SGD1.48	SGD2.65	44.2%
Nanofilm Technologies International (SGX:MZH)	SGD0.86	SGD1.47	41.5%

Click here to see the full list of 8 stocks from our Undervalued SGX Stocks Based On Cash Flows screener.

We'll examine a selection from our screener results.

Seatrium (SGX:5E2)

Overview: Seatrium Limited is a company that offers engineering solutions to the offshore, marine, and energy sectors, with a market capitalization of approximately SGD 5.18 billion.

Operations: The company's revenue is primarily derived from rigs and floaters, repairs and upgrades, offshore platforms, and specialized shipbuilding, which collectively contribute SGD 7.26 billion, along with a smaller segment in ship chartering generating SGD 31.63 million.

Estimated Discount To Fair Value: 44.2%

Seatrium Limited, despite recent regulatory scrutiny and executive changes, shows potential in cash flow analysis as undervalued based on DCF, trading at S$1.48 against a fair value estimate of S$2.65. The company's revenue growth forecast at 8.7% annually outpaces the Singapore market average of 3.6%. However, its expected low return on equity (8.2%) in three years tempers its attractiveness slightly amidst strong contract wins like the SGD 11 billion FPSO projects with Petrobras and a significant HVDC system project with GE Vernova Inc., enhancing future revenue streams.

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

Nanofilm Technologies International (SGX:MZH)

Overview: Nanofilm Technologies International Limited offers nanotechnology solutions across Singapore, China, Japan, and Vietnam with a market capitalization of approximately SGD 572.89 million.

Operations: Nanofilm Technologies International's revenue is primarily generated from four segments: Advanced Materials at SGD 141.54 million, Nanofabrication at SGD 16.05 million, Industrial Equipment at SGD 37.17 million, and Sydrogen at SGD 1.05 million.

Estimated Discount To Fair Value: 41.5%

Nanofilm Technologies International is perceived as undervalued based on DCF metrics, currently trading at SGD0.86 against a fair value of SGD1.47. Despite a significant decline in net profit margin from 18.5% to 1.8%, the company's earnings are expected to grow by 50.66% annually over the next three years, outpacing the Singapore market's growth rate significantly. Recent executive changes and optimistic corporate guidance for FY2024 suggest potential improvements in financial performance, supporting its undervaluation thesis.

• Insights from our recent growth report point to a promising forecast for Nanofilm Technologies International's business outlook.
• Click here to discover the nuances of Nanofilm Technologies International with our detailed financial health report.

Singapore Technologies Engineering (SGX:S63)

Overview: Singapore Technologies Engineering Ltd is a global technology, defense, and engineering company with a market capitalization of SGD 13.82 billion.

Operations: The company generates revenue through three primary segments: Commercial Aerospace (SGD 3.97 billion), Urban Solutions & Satcom (SGD 1.98 billion), and Defence & Public Security (SGD 4.29 billion).

Estimated Discount To Fair Value: 40.8%

Singapore Technologies Engineering, priced at SGD4.41, trades below its calculated fair value of SGD7.44, indicating a substantial undervaluation based on discounted cash flows. Despite a modest annual earnings growth of 1.1% over the past five years, forecasts predict an 11.69% increase per year moving forward, outperforming the broader Singapore market's 9.2% expected growth rate. Recent share repurchase announcements and consistent dividend payments underscore management's confidence in ongoing financial stability and shareholder value enhancement efforts.

• Our growth report here indicates Singapore Technologies Engineering may be poised for an improving outlook.
• Unlock comprehensive insights into our analysis of Singapore Technologies Engineering stock in this financial health report.

Make It Happen

• Discover the full array of 8 Undervalued SGX Stocks Based On Cash Flows right here.
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Interested In Other Possibilities?

• 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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