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The Hong Kong market has recently seen cautious optimism amid global economic shifts, with the Hang Seng Index advancing while other major indices faced declines. This environment presents a unique opportunity for investors to identify undervalued stocks that may be overlooked. In such a climate, finding good stocks often involves looking for companies with strong fundamentals and growth potential that are trading below their intrinsic value. Here are three SEHK value picks for August 2024 that investors might be overlooking.
Top 10 Undervalued Stocks Based On Cash Flows In Hong Kong
Name | Current Price | Fair Value (Est) | Discount (Est) |
Bosideng International Holdings (SEHK:3998) | HK$3.84 | HK$6.77 | 43.3% |
WuXi XDC Cayman (SEHK:2268) | HK$20.65 | HK$39.33 | 47.5% |
Pacific Textiles Holdings (SEHK:1382) | HK$1.54 | HK$2.84 | 45.9% |
Q Technology (Group) (SEHK:1478) | HK$4.89 | HK$9.73 | 49.8% |
Hangzhou SF Intra-city Industrial (SEHK:9699) | HK$11.52 | HK$22.77 | 49.4% |
China Renaissance Holdings (SEHK:1911) | HK$7.27 | HK$12.30 | 40.9% |
iDreamSky Technology Holdings (SEHK:1119) | HK$2.19 | HK$4.16 | 47.4% |
DPC Dash (SEHK:1405) | HK$69.00 | HK$134.38 | 48.7% |
Jinke Smart Services Group (SEHK:9666) | HK$7.87 | HK$13.99 | 43.8% |
Vobile Group (SEHK:3738) | HK$1.53 | HK$2.70 | 43.3% |
Let's dive into some prime choices out of the screener.
DPC Dash
Overview: DPC Dash Ltd, with a market cap of HK$9 billion, operates a chain of fast-food restaurants in the People's Republic of China.
Operations: The company's revenue segments include sales from its fast-food restaurant operations in the People’s Republic of China.
Estimated Discount To Fair Value: 48.7%
DPC Dash Ltd appears undervalued based on cash flows, trading at HK$69, significantly below its estimated fair value of HK$134.38. Recent earnings show robust growth with sales of CNY 2.04 billion for H1 2024, up from CNY 1.38 billion a year ago, and net income rising to CNY 10.91 million from CNY 8.75 million despite modest EPS growth. The company’s aggressive expansion strategy and strong revenue forecasts bolster its investment potential amidst Hong Kong's market landscape.
Bosideng International Holdings
Overview: Bosideng International Holdings Limited operates in the apparel business in the People's Republic of China and has a market cap of HK$42.06 billion.
Operations: The company generates revenue from several segments, including Down Apparels (CN¥19.54 billion), Ladieswear Apparels (CN¥819.80 million), Diversified Apparels (CN¥235.33 million), and Original Equipment Manufacturing Management (OEM) (CN¥2.70 billion).