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Undervalued companies are those that trade at a price lower than their actual values, such as Hop Fung Group Holdings and Dahe Media. Smart investors can make money from this discrepancy by buying these shares, because they believe the current market prices will eventually move towards their true value. If you’re looking for capital gains in your next investment, I suggest you take a look at my list of potentially undervalued stocks.
Hop Fung Group Holdings Limited (SEHK:2320)
Hop Fung Group Holdings Limited, an investment holding company, manufactures and sells corrugated paper-ware products in the People’s Republic of China. Established in 1983, and headed by CEO Sum Tai Hui, the company currently employs 1,100 people and with the market cap of HKD HK$988.06M, it falls under the small-cap category.
2320’s stock is currently trading at -57% below its actual worth of $2.91, at a price of HK$1.24, based on my discounted cash flow model. The discrepancy signals an opportunity to buy low. What’s even more appeal is that 2320’s PE ratio stands at 7.17x while its Packaging peer level trades at, 10.91x indicating that relative to its comparable set of companies, we can purchase 2320’s shares for cheaper. 2320 is also a financially robust company, with short-term assets covering liabilities in the near future as well as in the long run. Finally, its debt relative to equity is 9.52%, which has been declining over the past couple of years signifying its capacity to reduce its debt obligations year on year. Continue research on Hop Fung Group Holdings here.
Dahe Media Co., Ltd. (SEHK:8243)
Dahe Media Co., Ltd., together with its subsidiaries, engages in outdoor media dissemination, terminal dissemination, outdoor advertising media production, and artwork trading businesses in the People’s Republic of China. Established in 1994, and headed by CEO Hongxing Huang, the company size now stands at 392 people and with the stock’s market cap sitting at HKD HK$294.65M, it comes under the small-cap category.
8243’s shares are now floating at around -86% beneath its actual value of ¥2.54, at the market price of HK$0.35, based on my discounted cash flow model. This discrepancy gives us a chance to invest in 8243 at a discount. Additionally, 8243’s PE ratio is trading at 7.35x relative to its Media peer level of, 15.45x indicating that relative to other stocks in the industry, you can buy 8243 for a cheaper price. 8243 is also a financially robust company, with short-term assets covering liabilities in the near future as well as in the long run.