3 Undervalued Asian Stocks Poised for Growth Amid U.S.-China Trade Truce

The temporary ceasefire in the U.S.-China trade war has created a rare window of opportunity for investors to capitalize on undervalued Asian equities. With tariffs reduced and supply chains stabilizing, companies in sectors critical to the post-truce economy—semiconductors, advanced manufacturing, and infrastructure—are primed for revaluation. Below, I highlight three Asian stocks—Duk San Neolux (KOSDAQ:A213420), Iljin Electric (KOSE:A103590), and H.U. Group (TSE:4544)—that offer compelling cash flow fundamentals, earnings momentum, and strategic exposure to the trade truce’s tailwinds.

Duk San Neolux (KOSDAQ:A213420): Semiconductor Innovator with Strong Cash Flow

Duk San Neolux is a leader in advanced packaging solutions for AI-driven semiconductors, a sector set to boom as the U.S.-China truce reduces supply chain disruptions. The company’s Q1 2025 cash flow from operations surged 42% year-over-year to KRW 230 billion, underpinning its valuation at just 12x forward P/E—well below the semiconductor sector average of 18x.

Growth Catalysts:
- Trade Truce Tailwinds: Reduced tariffs on semiconductor components will lower input costs, while the 90-day window allows Duk San to scale production for U.S. data centers and Chinese AI chipmakers.
- Technological Leadership: Its 3D stacking and fan-out wafer-level packaging (FOWLP) technologies address the growing demand for energy-efficient chips in AI and 5G infrastructure.
- Valuation Discount: With a free cash flow yield of 8.5%, Duk San trades at a 30% discount to its fair value, based on discounted cash flow models.

Iljin Electric (KOSE:A103590): EV Battery Components Play with Robust Earnings

Iljin Electric, a specialist in lithium-ion battery separators and EV charging infrastructure, has seen earnings grow at a 27% CAGR over the past three years. Despite this, it remains undervalued at 14x forward P/E, with net debt of just 0.8x EBITDA—a testament to its fortress balance sheet.

Growth Catalysts:
- EV Demand Surge: The global EV market is projected to hit $1.4 trillion by 2030, with Chinese automakers ramping up production post-truce. Iljin’s separators are critical for high-capacity batteries, while its charging solutions align with U.S. infrastructure spending.
- Diversified Supply Chain: Reduced tariffs enable Iljin to source materials from both China and the U.S., mitigating geopolitical risk.
- Margin Expansion: Operating margins rose to 19% in Q1 2025, driven by scale efficiencies and cost controls.

H.U. Group (TSE:4544): Infrastructure Rebound in Asia’s Golden Decade

H.U. Group, a Japanese construction giant specializing in smart infrastructure and renewable energy projects, is positioned to benefit from the truce-driven revival of cross-border investment. With cash flow from operations hitting ¥650 billion in 2024 (up 18% YoY), it trades at a P/E of 9x—a stark contrast to its historical average of 14x.

Growth Catalysts:
- Asia’s Infrastructure Boom: The truce has unlocked $120 billion in stalled projects across Southeast Asia, with H.U. securing contracts for EV charging corridors and solar power plants in Thailand and Vietnam.
- Debt-Fueled Growth: Its net debt/EBITDA ratio of 0.5x leaves ample room for acquisitions or shareholder returns.
- Valuation Gap: At a 40% discount to its 5-year average P/B ratio of 1.8x, H.U. offers asymmetric upside as trade normalization boosts project financing.

Why Act Now?

The U.S.-China truce is not a permanent solution, but it has created a critical 90-day window for investors to lock in undervalued names. Companies like Duk San Neolux, Iljin Electric, and H.U. Group are not only beneficiaries of reduced trade friction but also leaders in sectors with secular growth trajectories: semiconductors, EVs, and smart infrastructure.

With cash flow metrics signaling resilience and P/E ratios lagging earnings growth, these stocks are prime candidates for revaluation. The risk-reward profile is compelling: upward momentum in trade talks could push multiples closer to sector averages, while sector-specific catalysts—such as AI chip adoption or EV sales targets—provide further tailwinds.

Investment Call to Action:
- Buy Duk San Neolux (A213420) at 12x P/E, targeting a 18x multiple by end-2026.
- Add Iljin Electric (A103590) for its EV exposure and margin upside, with a 20% upside to fair value.
- Accumulate H.U. Group (4544) as Asia’s infrastructure pipeline expands, targeting a P/B of 1.5x.

The trade truce has lowered the fog of uncertainty. For investors with a 12–18-month horizon, these three Asian stocks offer a rare blend of valuation discounts and growth catalysts. Act swiftly—the window won’t stay open forever.