As global markets navigate fluctuating inflation rates and monetary policies, the Hong Kong stock market offers a unique opportunity for value-seeking investors. In these circumstances, identifying stocks that appear to be undervalued relative to their intrinsic value may be particularly attractive.
Top 10 Undervalued Stocks in Hong Kong Based on Cash Flow
name
Current price
Fair Value (Estimated)
Discount (estimated)
Giant Biogene Holdings (SEHK:2367)
40.90 Hong Kong dollars
76.14 Hong Kong dollars
46.3%
China Xinda Asset Management (SEHK:1359)
0.68 Hong Kong Dollar
1.29 Hong Kong Dollar
47.4%
China Resources Mix Lifestyle Services (SEHK:1209)
25.25 Hong Kong dollars
47.60 Hong Kong dollars
47%
Super High International Holdings (SEHK:9658)
13.40 Hong Kong dollars
25.89 Hong Kong dollars
48.2%
Zijin Mining Group (SEHK:2899)
16.96 Hong Kong dollars
32.38 Hong Kong dollars
47.6%
Trillion Mining (SEHK:1818)
16.02 Hong Kong dollars
30.56 Hong Kong dollars
47.6%
West China Cement (SEHK:2233)
1.14 Hong Kong Dollar
2.15 Hong Kong dollars
47.1%
BYD (Hong Kong Stock Exchange Index: 1211)
241.60 Hong Kong dollars
464.17 Hong Kong dollars
48%
Mobvista (SEHK:1860)
2.06 Hong Kong dollars
3.74 Hong Kong dollars
45%
Vauville Group (SEHK:3738)
1.24 Hong Kong Dollars
2.32 Hong Kong dollars
46.4%
To see the full list of 41 stocks from our SEHK stock screener that are undervalued based on cash flow, click here.
Let’s look at some noteworthy options from the screener results.
About Q Technology (Group) Company Limited is an investment holding company specializing in the design, research and development, manufacturing and sales of camera and fingerprint recognition modules in Mainland China, Hong Kong, India and other international markets, with a market capitalization of approximately HK$5.86 billion.
Business: The company generates revenue primarily through the sale of camera modules and fingerprint recognition modules, with a combined revenue of RMB 12.35 billion.
Estimated discount rate to fair value: 39.1%
Q Technology (Group) is currently valued at HK$4.95, well below its estimated fair value of HK$8.13, suggesting that it may be undervalued based on cash flow. Although profit margins have declined this year compared to last year, earnings growth over the next three years is projected to be 33.66% per year, which is well above the Hong Kong market average. The company’s earnings growth rate is also outperforming market expectations. However, the expected return on equity remains low at 9.1%, suggesting potential concerns about future earnings efficiency.
SEHK:1478 Discounted cash flows as of July 2024
Overview: Mobvista Inc. provides advertising and marketing technology services that support the development of the mobile internet ecosystem worldwide and has a market capitalization of approximately HK$3.08 billion.
The story continues
Business: The company’s revenue is primarily generated from two segments: its marketing technology business, which contributed $16.26 million in revenue, and advertising technology services, which contributed $1.09 billion.
Estimated discount rate to fair value: 45%
Mobvista Inc. reported strong growth in revenue of US$301.48 million and net income of US$7.59 million in the first quarter of 2024, reflecting strong growth from the prior year. The company’s shares are priced at HK$2.06, well below its estimated fair value of HK$3.74, indicating that it is significantly undervalued based on cash flow. Analysts predict that the stock could rise by 166.9%. Despite large one-time items impacting earnings quality, Mobvista’s revenue and profits are expected to grow above the market at 16% and 20.3% per year, respectively.
SEHK:1860 Discounted cash flow as of July 2024
About Giant Biogene Holdings Limited is an investment holding company in the People’s Republic of China specialized in the research, development, manufacturing and sales of bioactive substance-based beauty and health products with a market capitalization of approximately HK$41.28 billion.
Business: The company derives its revenue primarily from its biotechnology division, with sales reaching 3.52 billion yuan.
Estimated discount rate to fair value: 46.3%
Giant Biogene Holdings is a strong performer in the market with its recent HK$1.64 billion IPO and the launch of its innovative Vpro skincare line. Despite a generous dividend of HK$0.49 per share and robust product development, the company’s shares are trading at HK$40.9, 46.3% below its estimated fair value of HK$76.14. Analysts forecast a robust 22.8% annual profit growth over the next three years, above the Hong Kong market forecast of 11.5%, suggesting the company may be undervalued based on cash flow.
SEHK:2367 Discounted cash flows as of July 2024
summary
See 41 stocks from our SEHK stock screener that are undervalued based on cash flow here.
Are you looking to invest in these stocks? Use Simply Wall St Portfolios to improve how you manage your stocks with intuitive tools to optimize your investment performance.
Enhance your investing capabilities with the Simply Wall St app and access vital market information across all continents for free.
Are you considering other strategies?
This article by Simply Wall St is of general nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology, and our articles are not intended as financial advice. It is not a recommendation to buy or sell a stock, and does not take into account your objectives or financial situation. We aim to provide long-term analysis driven by fundamental data. Please note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any of the stocks mentioned herein.
Companies featured in this article include SEHK:1478, SEHK:1860 and SEHK:2367.
Have something to say about this article? If you have any questions about the content, please contact us directly or email us at editorial-team@simplywallst.com.
