In this article, we will examine the 5 Most Undervalued Hong Kong Stocks to Buy According to Analysts.
Hong Kong stocks have been in fine form behind a banner year. A new record in trading volume, new listings, and fundraising underscores renewed interest in Chinese stocks. The average daily turnover for the first nine months of the year was HK$256.4 billion, more than double the level of the previous year.
The record trading volumes underscore how international capital is increasingly flowing back into Hong Kong stocks, some of which appear to be trading at a discount compared to their US counterparts. Similarly, energized trading and robust IPO activity affirm renewed investor optimism about the overall stock market outlook.
The Hang Seng, the city’s flagship index, has rallied 36% year to date, more than double the gains of the S&P 500, affirming the buying spree around Chinese stocks. The significant gains come as investors increasingly pile into Hong Kong Stocks owing to their lower valuations. Additionally, the city’s strategic position amid growing US-China tensions continues to fuel the rally.
In the first half of the year, a record $90 billion from mainland China drove a 21% gain in Hong Kong Stocks.
“The Hong Kong stock market is being reprised by mainland money,” said Chen Dong, fund manager at Hangzhou Ultraviolet Private Fund. Chinese money “is gushing in from various directions in a gold rush,” he said.
According to the fund manager, erratic US policies, rate cuts, and bets on China’s technological innovations are likely to drive more money into Hong Kong stocks. With that in mind, let’s look at some of the Most Undervalued Hong Kong stocks to buy according to analysts.
Our Methodology
To compile our list of 5 Most Undervalued Hong Kong Stocks to Buy, we used Yahoo Finance to settle on stocks headquartered or founded in Hong Kong. We also focused on stocks that have a significant presence in Hong Kong or trading on Hong Kong Stock Exchange and detailed their year-to-date performance. We trimmed our list further, focusing on stocks with a price to earnings P/E multiple of less than 20 (as of October 19) and a high upside potential. Finally, we ranked the stocks in descending order based on their P/E ratio.
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Most Undervalued Hong Kong Stocks to Buy According to Analysts
5. Melco Resorts & Entertainment Ltd (NASDAQ:MLCO)
Price to Earnings Ratio P/E: 14.41
Analyst Upside Potential: 36.89%
Year to Date Performance: 42.75%
Melco Resorts & Entertainment Ltd (NASDAQ:MLCO) is one of the most undervalued Hong Kong stocks to buy, according to analysts. On October 6, the company launched the world’s first and Macau’s only integrated resort Hospital in partnership with iRad, Hong Kong’s largest MRI diagnostic services provider.
The hospital will feature MRI & CT facilities, world-class screening and diagnostic imaging, aesthetic medicine, longevity treatments, and medical concierge services. The iRad hospital will enhance the city’s tourism infrastructure by introducing a robust medical and wellness ecosystem.
Lawrence Ho, Chairman & CEO, Melco Resorts & Entertainment, said:
“By launching the world’s first and Macau’s only hospital with MRI & CT facilities within an integrated resort, we strive to contribute to the advancement of medical tourism in Macau. This project aligns with the SAR government’s ‘1+4’ economic diversification strategy, and we are thankful for the government’s support and guidance throughout the development process.”
By offering a cutting-edge medical tourism experience, the company hopes to attract regional and overseas visitors. It also hopes to encourage longer stays in its hotels and higher spending while attracting repeat and long-term guests.
Later, on October 14, JP Morgan analyst DS Kim reiterated a Buy rating on Melco Resorts & Entertainment Ltd (NASDAQ:MLCO) and cut the price target to $10.5 from $12.
Melco Resorts & Entertainment Ltd (NASDAQ:MLCO) develops, owns, and operates integrated resorts in Asia and Europe, featuring casinos, luxury hotels, dining, entertainment, and retail. It offers premium and mass-market gaming experiences, and also operates Mocha Clubs, providing electronic gaming in a cafe-style setting.
4. Sun Hung Kai Properties Ltd (OTCMKTS:SUHJY)
Price to Earnings Ratio P/E: 11.32
Analyst Upside Potential: 23.27%
Year to Date Performance: 29.45%
Sun Hung Kai Properties Ltd (OTCMKTS:SUHJY) is one of the most undervalued Hong Kong stocks to buy, according to analysts. On October 16, UBS downgraded Sun Hung Kai Properties (HK:0016) from Buy to Neutral, setting a price target of HK$96.00.
The firm cited a balanced risk-reward profile following a 31% year-to-date rally, driven by a rebound in Hong Kong’s residential market. Despite a low price-to-book ratio and NAV discount, UBS noted that residential assets make up just 20% of the company’s gross asset value, limiting upside potential without strategic shifts in capital recycling or shareholder returns. UBS highlighted possible downside protection from the launch of Cullinan Sky Phase 2, with Phase 1 showing 7–17% price gains.
Sun Hung Kai Properties Ltd (OTCMKTS:SUHJY) develops, owns, and manages a diverse portfolio of premium properties, including residential estates, offices, and shopping malls. Beyond real estate, the Hong Kong-based company also has investments in various sectors, including property management, construction, insurance, telecommunications, information technology, and infrastructure.
