SEHK's Top Picks For Estimated Undervalued Stocks In September 2024
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As global markets navigate a period of economic adjustments, the Hong Kong stock market has shown resilience amidst fluctuating inflation data and evolving trade dynamics. With the Hang Seng Index experiencing modest declines, investors are increasingly on the lookout for undervalued opportunities that could offer significant potential for growth. In this context, identifying stocks that are trading below their intrinsic value can be particularly appealing. Here are three top picks from SEHK that may be considered undervalued in September 2024.
Top 10 Undervalued Stocks Based On Cash Flows In Hong Kong
| Name | Current Price | Fair Value (Est) | Discount (Est) |
| Bosideng International Holdings (SEHK:3998) | HK$3.60 | HK$6.74 | 46.6% |
| WuXi XDC Cayman (SEHK:2268) | HK$20.00 | HK$39.28 | 49.1% |
| Shanghai INT Medical Instruments (SEHK:1501) | HK$28.20 | HK$56.15 | 49.8% |
| BYD (SEHK:1211) | HK$240.00 | HK$460.81 | 47.9% |
| Hangzhou SF Intra-city Industrial (SEHK:9699) | HK$10.84 | HK$19.91 | 45.6% |
| Digital China Holdings (SEHK:861) | HK$3.23 | HK$6.10 | 47.1% |
| United Company RUSAL International (SEHK:486) | HK$2.28 | HK$4.25 | 46.3% |
| Akeso (SEHK:9926) | HK$71.60 | HK$133.26 | 46.3% |
| Innovent Biologics (SEHK:1801) | HK$44.20 | HK$80.34 | 45% |
| Jinke Smart Services Group (SEHK:9666) | HK$6.91 | HK$13.78 | 49.9% |
Here we highlight a subset of our preferred stocks from the screener.
AAC Technologies Holdings
Overview: AAC Technologies Holdings Inc. is an investment holding company that provides solutions for smart devices across various regions including Mainland China, Hong Kong, Taiwan, other Asian countries, the United States, and Europe, with a market cap of HK$34.16 billion.
Operations: Revenue Segments (in millions of CN￥): Optics Products: 4068.18, Acoustics Products: 7635.95, Segment Adjustment: 1539.06, Sensor and Semiconductor Products: 920.28, Electromagnetic Drives and Precision Mechanics: 8283.63. AAC Technologies Holdings Inc.'s revenue is derived from optics products (CN￥4.07 billion), acoustics products (CN￥7.64 billion), sensor and semiconductor products (CN￥0.92 billion), and electromagnetic drives and precision mechanics (CN￥8.28 billion).
Estimated Discount To Fair Value: 19.1%
AAC Technologies Holdings is trading at HK$28.5, below its estimated fair value of HK$35.25, indicating it may be undervalued based on cash flows. The company's earnings grew by 81.3% over the past year and are forecast to grow significantly at 21% annually, outpacing the Hong Kong market's expected growth of 11.7%. Recent earnings reports show a substantial increase in net income to CNY 537.03 million for H1 2024 from CNY 150.3 million a year ago.
