Companies that are recently trading at a market price lower than their real values include Tianli Holdings Group and Tomson Group. There’s a few ways you can measure the value of a company – you can forecast how much money it will make in the future and base your valuation off of this, or you can look around at its peers of similar size and industry to roughly estimate what it should be worth. Below, I’ve created a list of companies that compare favourably in all criteria based on their most recent financial data, making them potentially good investments.
Tianli Holdings Group Limited (SEHK:117)
Tianli Holdings Group Limited, an investment holding company, manufactures, sells, and trades in multi-layer ceramic chips (MLCC) in Mainland China, Hong Kong, and internationally. Formed in 2001, and currently run by Zhifeng Jin, the company now has 1,277 employees and has a market cap of HKD HK$826.67M, putting it in the small-cap category.
117’s stock is now hovering at around -81% lower than its real value of ¥5.86, at the market price of HK$1.11, based on my discounted cash flow model. The discrepancy signals an opportunity to buy low. In terms of relative valuation, 117’s PE ratio is trading at around 4.86x against its its Electronic peer level of, 11.97x meaning that relative to its comparable set of companies, 117’s shares can be purchased for a lower price. 117 is also a financially healthy company, as short-term assets amply cover upcoming and long-term liabilities.
Interested in Tianli Holdings Group? Find out more here.
Tomson Group Limited (SEHK:258)
Tomson Group Limited, an investment holding company, engages in property development and investment, hospitality and leisure, securities trading, PVC, and media and entertainment investment businesses in Hong Kong, Macau, and Mainland China. The company provides employment to 550 people and with the company’s market capitalisation at HKD HK$6.15B, we can put it in the mid-cap stocks category.
258’s stock is now trading at -92% lower than its true value of $41.31, at the market price of HK$3.26, based on its expected future cash flows. signalling an opportunity to buy the stock at a low price. In terms of relative valuation, 258’s PE ratio stands at 4.69x against its its Real Estate peer level of, 7.3x suggesting that relative to its comparable company group, you can purchase 258’s stock for a lower price right now. 258 is also a financially healthy company, as short-term assets amply cover upcoming and long-term liabilities. The stock’s debt-to-equity ratio of 5.90% has been declining over time, indicating 258’s ability to reduce its debt obligations year on year. More on Tomson Group here.
CCID Consulting Company Limited (SEHK:8235)
CCID Consulting Company Limited provides consulting services in the People’s Republic of China. The company size now stands at 249 people and has a market cap of HKD HK$185.50M, putting it in the small-cap group.
8235’s stock is now floating at around -51% lower than its actual worth of ¥0.54, at a price of HK$0.27, based on my discounted cash flow model. The mismatch signals a potential chance to invest in 8235 at a discounted price. In terms of relative valuation, 8235’s PE ratio is trading at 7.1x relative to its IT peer level of, 18.43x suggesting that relative to other stocks in the industry, we can buy 8235’s stock at a cheaper price today. 8235 is also strong in terms of its financial health, with short-term assets covering liabilities in the near future as well as in the long run. 8235 has zero debt on its books as well, meaning it has no long term debt obligations to worry about. More on CCID Consulting here.
For more financially sound, undervalued companies to add to your portfolio, explore this interactive list of undervalued stocks.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.