The Hong Kong market has experienced notable fluctuations recently, with investors closely monitoring global economic developments and policy changes. Amidst this environment, identifying undervalued stocks can be a strategic move for those looking to capitalize on potential market mispricings. In the current climate, a good stock is often characterized by strong fundamentals and resilience in the face of economic uncertainty. This article will explore three such stocks listed on the SEHK that may be trading below their estimated value, starting with Chow Sang Sang Holdings International.

Top 10 Undervalued Stocks Based On Cash Flows In Hong Kong

Click here to see the full list of 35 stocks from our Undervalued SEHK Stocks Based On Cash Flows screener.

Let's uncover some gems from our specialized screener.

Chow Sang Sang Holdings International

Overview: Chow Sang Sang Holdings International Limited is an investment holding company that manufactures and retails jewellery, with a market cap of HK$4.40 billion.

Operations: The company generates revenue primarily from the manufacture and retail of jewellery.

Estimated Discount To Fair Value: 35.3%

Chow Sang Sang Holdings International is trading at HK$6.5, significantly below its fair value estimate of HK$10.05, indicating it is highly undervalued based on discounted cash flow analysis. Despite a recent decline in revenue and net income due to high gold prices and weak consumer spending, the company forecasts substantial earnings growth of 36.1% annually over the next three years. Additionally, a share repurchase program aims to enhance net asset value and earnings per share.

• Our growth report here indicates Chow Sang Sang Holdings International may be poised for an improving outlook.

• Click to explore a detailed breakdown of our findings in Chow Sang Sang Holdings International's balance sheet health report.

Sunac Services Holdings

Overview: Sunac Services Holdings Limited, with a market cap of HK$5.14 billion, offers property development, cultural tourism city construction and operation, and property management services in the People’s Republic of China.

Operations: Revenue segments for Sunac Services Holdings Limited include property development, cultural tourism city construction and operation, and property management services in the People’s Republic of China.

Estimated Discount To Fair Value: 17.1%

Sunac Services Holdings is trading at HK$1.68, below its fair value estimate of HK$2.03, suggesting undervaluation based on cash flows. Despite reporting a net loss of CNY 472.23 million for the first half of 2024 due to increased impairment provisions from past transactions, core net profit excluding these factors remains stable compared to last year. Forecasts indicate annual profit growth of 83% and revenue growth at 8% per year, outpacing the Hong Kong market average.

• Upon reviewing our latest growth report, Sunac Services Holdings' projected financial performance appears quite optimistic.

• Get an in-depth perspective on Sunac Services Holdings' balance sheet by reading our health report here.

China International Capital

Overview: China International Capital Corporation Limited offers financial services in Mainland China and internationally, with a market cap of HK$101.95 billion.

Operations: The company's revenue segments (in millions of CN￥) are Investment Banking (￥4,200), Equities (￥6,500), FICC (￥3,800), Wealth Management (￥2,100), and Asset Management (￥1,900).

Estimated Discount To Fair Value: 25.5%

China International Capital Corporation is trading at HK$7.87, below its estimated fair value of HK$10.57, indicating it may be undervalued based on cash flows. Earnings are forecast to grow significantly over the next three years, with expected annual profit growth of 20.2%, outpacing the Hong Kong market average of 10.8%. Recent announcements include a CNY 3 billion fixed-income offering and a substantial cash dividend distribution for 2023 profits.

• According our earnings growth report, there's an indication that China International Capital might be ready to expand.

• Take a closer look at China International Capital's balance sheet health here in our report.

Next Steps

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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.

Companies discussed in this article include SEHK:116 SEHK:1516 and SEHK:3908.

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