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Delong Holdings and AnAn International 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. Investors can determine how much a company is worth based on how much money they are expected to make in the future, or compared to the value of their peers. The list I’ve put together below are of stocks that compare favourably on all criteria, which potentially makes them good investments if you believe the price should eventually reflect the stock’s actual value.
Delong Holdings Limited (SGX:BQO)
Delong Holdings Limited, an investment holding company, manufactures and sells hot-rolled steel coils and billets in the People’s Republic of China and Singapore. Delong Holdings is currently led by CEO Liguo Ding. With the company’s market capitalisation at SGD SGD467.17M, we can put it in the small-cap group
BQO’s shares are now floating at around -29% less than its true level of ¥5.94, at the market price of S$4.24, based on my discounted cash flow model. The mismatch signals a potential chance to invest in BQO at a discounted price. In terms of relative valuation, BQO’s PE ratio stands at around 1.13x against its its Metals and Mining peer level of, 18.25x meaning that relative to its peers, you can buy BQO’s shares at a cheaper price. BQO is also in good financial health, with near-term assets able to cover upcoming and long-term liabilities. Finally, its debt relative to equity is 57.27%, which has been dropping over time, revealing its capability to reduce its debt obligations year on year. More detail on Delong Holdings here.
AnAn International Limited (SGX:Y35)
AnAn International Limited, an investment holding company, engages in the trading of petrochemical, and fuel oil and petroleum products. AnAn International was formed in 2004 and with the market cap of SGD SGD76.20M, it falls under the small-cap category.
Y35’s stock is currently trading at -91% below its actual worth of $0.19, at the market price of S$0.018, according to my discounted cash flow model. This mismatch indicates a potential opportunity to buy low. Furthermore, Y35’s PE ratio stands at 5.21x relative to its Oil and Gas peer level of, 8.13x meaning that relative to its peers, we can purchase Y35’s shares for cheaper. Y35 is also in good financial health, with short-term assets covering liabilities in the near future as well as in the long run. The stock’s debt-to-equity ratio of 17.37% has been reducing for the past few years signalling its capability to pay down its debt. Dig deeper into AnAn International here.