China Sunsine Chemical Holdings and Yuuzoo are two of the stocks I have identified as undervalued. This means their current share prices are trading at levels less than what the companies are actually worth. 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.
China Sunsine Chemical Holdings Ltd. (SGX:CH8)
China Sunsine Chemical Holdings Ltd., an investment holding company, engages in the manufacture and sale of rubber chemical products in the People’s Republic of China, rest of Asia, the United States, Europe, and internationally. Formed in 2006, and currently headed by CEO Jing Fu Liu, the company size now stands at 2,098 people and with the stock’s market cap sitting at SGD SGD531.03M, it comes under the small-cap stocks category.
CH8’s stock is now floating at around -35% below its actual worth of ¥1.66, at the market price of ¥1.08, based on its expected future cash flows. The mismatch signals a potential chance to invest in CH8 at a discounted price. Furthermore, CH8’s PE ratio is trading at around 9x against its its chemicals peer level of 15.9x, implying that relative to other stocks in the industry, we can invest in CH8 at a lower price. CH8 is also robust in terms of financial health, with short-term assets covering liabilities in the near future as well as in the long run. It’s debt-to-equity ratio of 2% has been diminishing for the past few years revealing its ability to reduce its debt obligations year on year. Interested in China Sunsine Chemical Holdings? Find out more here.
Yuuzoo Corporation Limited (SGX:AFC)
YuuZoo Corporation Limited, an investment holding company, engages in social networking, e-commerce, payments, and gaming businesses in Singapore and internationally. The company currently employs 45 people and with the company’s market capitalisation at SGD SGD45.83M, we can put it in the small-cap category.
AFC’s shares are currently floating at around -95% lower than its real value of $1.26, at a price of $0.06, based on its expected future cash flows. The divergence signals an opportunity to buy AFC shares at a low price. Moreover, AFC’s PE ratio stands at 1.5x against its its internet peer level of 29.4x, meaning that relative to other stocks in the industry, you can buy AFC for a cheaper price. AFC is also robust in terms of financial health, as short-term assets amply cover upcoming and long-term liabilities. AFC also has no debt on its balance sheet, which gives it headroom to grow and financial flexibility. Interested in Yuuzoo? Find out more here.