Yahoo Finance Exploring Three SGX Stocks With Estimated Intrinsic Discounts Ranging From 38.5% To 46.5%
The Singapore market continues to show resilience and adaptability, as evidenced by BNP Paribas's recent strategic embrace of AI technology through its partnership with Mistral AI. This move highlights the broader trend of technological integration within major financial sectors, setting a context where investors might look for stocks that are potentially undervalued yet poised to benefit from such transformative shifts. In this environment, understanding intrinsic value becomes crucial in identifying stocks that may offer significant upside potential amidst current market conditions.
Top 5 Undervalued Stocks Based On Cash Flows In Singapore
Name | Current Price | Fair Value (Est) | Discount (Est) |
LHN (SGX:41O) | SGD0.335 | SGD0.37 | 10.4% |
Singapore Technologies Engineering (SGX:S63) | SGD4.40 | SGD8.23 | 46.5% |
Frasers Logistics & Commercial Trust (SGX:BUOU) | SGD0.93 | SGD1.65 | 43.8% |
Hongkong Land Holdings (SGX:H78) | US$3.27 | US$5.81 | 43.7% |
Digital Core REIT (SGX:DCRU) | US$0.59 | US$1.11 | 46.7% |
Seatrium (SGX:5E2) | SGD1.39 | SGD2.60 | 46.5% |
Nanofilm Technologies International (SGX:MZH) | SGD0.91 | SGD1.48 | 38.5% |
Below we spotlight a couple of our favorites from our exclusive screener.
Hongkong Land Holdings
Overview: Hongkong Land Holdings Limited operates in the investment, development, and management of properties across Hong Kong, Macau, Mainland China, Southeast Asia, and other international markets with a market capitalization of approximately $7.22 billion.
Operations: The company generates revenue from two main segments: Investment Properties, which brought in $1.08 billion, and Development Properties, contributing $0.76 billion.
Estimated Discount To Fair Value: 43.7%
Hongkong Land Holdings, currently priced at S$3.27, is positioned 43.7% below our calculated fair value of S$5.81, indicating significant undervaluation based on cash flows. Despite a stable interim financial performance with consistent contributions from both Investment and Development Properties, challenges persist. The company's Return on Equity is expected to remain low at 2.4%, and its dividend coverage by earnings is weak. However, it shows promise with projected earnings growth of 43.34% annually and revenue growth forecasts outpacing the Singapore market average.
Nanofilm Technologies International
Overview: Nanofilm Technologies International Limited offers nanotechnology solutions across Singapore, China, Japan, and Vietnam with a market capitalization of approximately SGD 592.42 million.
Operations: The company's revenue is generated through four main segments: Sydrogen (SGD 1.05 million), Nanofabrication (SGD 16.05 million), Advanced Materials (SGD 141.54 million), and Industrial Equipment (SGD 37.17 million).
Estimated Discount To Fair Value: 38.5%
Nanofilm Technologies International, trading at S$0.91, significantly below the estimated fair value of S$1.48, presents a compelling case as an undervalued stock based on cash flows. Despite its current low profit margins of 1.8% compared to last year's 18.5%, the company is poised for robust growth with earnings expected to increase by 50.7% annually over the next three years—significantly outpacing the Singapore market's average growth rate of 8.9%. Recent executive changes and positive FY2024 financial guidance underscore management’s optimism about future performance.
Singapore Technologies Engineering
Overview: Singapore Technologies Engineering Ltd is a global technology, defense, and engineering group with a market capitalization of SGD 13.72 billion.
Operations: The company's revenue is derived from three primary segments: Commercial Aerospace (SGD 3.97 billion), Urban Solutions & Satcom (SGD 1.98 billion), and Defence & Public Security (SGD 4.29 billion).
Estimated Discount To Fair Value: 46.5%
Singapore Technologies Engineering, priced at SGD4.4, is significantly undervalued by market standards with an estimated fair value of SGD8.23. Despite a high level of debt and unstable dividend track record, the company's earnings are expected to grow by 11.7% annually, outperforming the Singapore market's average of 8.9%. Recent strategic share repurchases and consistent dividend payments highlight proactive management actions supporting shareholder value amidst moderate revenue growth forecasts of 6.9% per year.
Where To Now?
Click here to access our complete index of 7 Undervalued SGX Stocks Based On Cash Flows.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include SGX:H78 SGX:MZH and SGX:S63.
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