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Undervalued companies, such as Time Watch Investments and Shanghai Dasheng Agriculture Finance Technology, are those that trade at a price below their actual values. 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.
Time Watch Investments Limited (SEHK:2033)
Time Watch Investments Limited, an investment holding company, operates as a manufacturer, brand-owner, and retailer of watches in the People’s Republic of China. The company employs 5200 people and has a market cap of HKD HK$2.27B, putting it in the mid-cap group.
2033’s shares are now trading at -54% beneath its intrinsic value of $2.35, at a price tag of HK$1.09, based on my discounted cash flow model. This mismatch signals an opportunity to buy 2033 shares at a discount. Also, 2033’s PE ratio is currently around 8.08x relative to its Luxury peer level of, 14.44x suggesting that relative to its competitors, we can buy 2033’s stock at a cheaper price today. 2033 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 10.89% has been falling for the last couple of years showing 2033’s capacity to pay down its debt. Dig deeper into Time Watch Investments here.
Shanghai Dasheng Agriculture Finance Technology Co., Ltd. (SEHK:1103)
Shanghai Dasheng Agriculture Finance Technology Co., Ltd., together with its subsidiaries, trades in petrochemical products, and constructs roads and bridges in the People’s Republic of China. Founded in 1993, and now led by CEO Luojiang Mo, the company size now stands at 848 people and with the company’s market capitalisation at HKD HK$1.28B, we can put it in the small-cap group.
1103’s stock is currently trading at -44% beneath its real value of ¥0.24, at a price of HK$0.13, according to my discounted cash flow model. The discrepancy signals an opportunity to buy low. In terms of relative valuation, 1103’s PE ratio is currently around 2.68x relative to its Trade Distributors peer level of, 13.33x suggesting that relative to its peers, 1103’s stock can be bought at a cheaper price. 1103 is also strong financially, 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 65.97% has been dropping for the past few years demonstrating 1103’s capacity to pay down its debt. More detail on Shanghai Dasheng Agriculture Finance Technology here.