Companies that are recently trading at a market price lower than their real values include Cabbeen Fashion and Hebei Construction Group. There’s a few ways you can determine how much a company is actually worth. The most popular methods include discounting the company’s cash flows it is expected to create in the future, or comparing its price to its peers or the value of its assets. The discrepancy between the price and value means investors have an opportunity to buy shares at a discount. Below are the stocks I believe are undervalued on all criteria, based on their latest financial data.
Cabbeen Fashion Limited (SEHK:2030)
Cabbeen Fashion Limited, a fashion casual menswear company, together with its subsidiaries, researches and designs apparel, footwear and accessories in the People’s Republic of China. Established in 1997, and currently lead by Siu Ng, the company now has 402 employees and with the company’s market cap sitting at HKD HK$1.88B, it falls under the small-cap group.
2030’s stock is currently trading at -71% under its real value of ¥9.8, at the market price of HK$2.81, according to my discounted cash flow model. This mismatch indicates a chance to invest in 2030 at a discounted price. Also, 2030’s PE ratio is currently around 7.75x against its its Luxury peer level of, 13.32x meaning that relative to its competitors, you can buy 2030’s shares at a cheaper price. 2030 is also robust in terms of financial health, as short-term assets amply cover upcoming and long-term liabilities. It’s debt-to-equity ratio of 27.30% has been dropping over the past couple of years revealing 2030’s capability to reduce its debt obligations year on year. More on Cabbeen Fashion here.
Hebei Construction Group Corporation Limited (SEHK:1727)
Hebei Construction Group Corporation Limited engages in the construction contracting of buildings and infrastructure projects in the People’s Republic of China. Formed in 1952, and now led by CEO Jinfeng Shang, the company currently employs 5,884 people and with the market cap of HKD HK$9.74B, it falls under the mid-cap category.
1727’s stock is currently hovering at around -83% beneath its actual worth of ¥31.99, at a price of HK$5.53, based on its expected future cash flows. This discrepancy signals a potential opportunity to buy 1727 shares at a low price. Additionally, 1727’s PE ratio is around 5.7x while its Construction peer level trades at, 13.57x indicating that relative to its comparable set of companies, 1727’s stock can be bought at a cheaper price. 1727 is also strong in terms of its financial health, as short-term assets amply cover upcoming and long-term liabilities.
Continue research on Hebei Construction Group here.
Sanbase Corporation Limited (SEHK:8501)
Sanbase Corporation Limited, an investment holding company, provides interior fit-out solutions in Hong Kong. Founded in 2009, and now led by CEO Sai Wong, the company now has 28 employees and with the company’s market capitalisation at HKD HK$280.00M, we can put it in the small-cap group.
8501’s stock is now hovering at around -49% under its intrinsic level of $2.74, at a price of HK$1.40, based on my discounted cash flow model. The discrepancy signals an opportunity to buy low. Also, 8501’s PE ratio stands at around 13.26x while its Construction peer level trades at, 13.57x implying that relative to its comparable company group, 8501 can be bought at a cheaper price right now. 8501 is also strong financially, as current assets can cover liabilities in the near term and over the long run. 8501 has zero debt on its books as well, meaning it has no long term debt obligations to worry about. More detail on Sanbase here.
For more financially sound, undervalued companies to add to your portfolio, explore this interactive list of undervalued stocks.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.