(This is part of a series focusing on deep value stocks that offer high dividend yields and possess good fundamentals. The current bearishness in Chinese stocks has unveiled numerous such exceptionally cheap opportunities, which we will reveal over time.)
Ajisen China (SEHK:0538), a ramen chain with a diverse portfolio of brands, operates in Hong Kong and Mainland China.
Rather than being a growth stock, it stands out as a deeply undervalued play. Our analysis will focus on its asset value to show why it is undervalued. Here is the calculation that supports this assessment:
Breakdown of Assets
Cash = ¥1,465m
Investment Properties = ¥999m
Land and Building = ¥287m
Total value of good assets = ¥2,751m
Liabilities and Interests
Total Liabilities = ¥947m
Non-controlling interest = ¥47m
Net Value Calculation
Good Assets - Total Liabilities - Non-Controlling Interest = ¥1,757m = HK$1,930m
Per Share Analysis
Net Good Assets per share = HK$1.47
Share price = HK$0.92