Undervalued Asian Equities in September 2025: High-Conviction Value Stocks Trading Below Intrinsic Estimates

In September 2025, global markets are increasingly turning their attention to undervalued Asian equities as macroeconomic uncertainties—ranging from trade tensions to the anticipation of Federal Reserve rate cuts—create fertile ground for value investing. With small-cap and value stocks outperforming broader indices, investors are scrutinizing cash flows and intrinsic value metrics to identify compelling opportunities. This analysis highlights high-conviction stocks trading significantly below their estimated fair values, supported by granular financial data and sector-specific growth dynamics.

Market Context: A Shift Toward Value

The September 2025 market environment is marked by divergent trends. While large-cap tech stocks continue to dominate headlines, value-oriented investors are capitalizing on the underperformance of mid- and small-cap equities. The Morningstar US Value Index surged 5.05% in August 2025, outpacing growth counterparts, as the Federal Reserve prepares to cut interest rates by 25 basis points in late September Market Commentary – September 2025 - James Investment^[1]. This normalization of rates, coupled with elevated corporate profit margins (S&P 500 operating margin at 17.9%), suggests a structural shift favoring undervalued assets Equity Market Commentary - September 2025 - Morgan Stanley^[2].

High-Conviction Asian Equities: Deep-Value Opportunities

1. Cosmax, Inc. (KRX: 038310)

South Korea's Cosmax, a leader in cosmetics and health functional foods, is trading at ₩231,500—44.9% below its estimated fair value of ₩420,145.45 Asian Stocks Trading Below Estimated Value In September 2025^[3]. The company's earnings are projected to grow at 41.4% annually, far exceeding the Korean market average of 23.2%. This outperformance stems from its expanding product portfolio and strategic partnerships in the premium skincare segment. Despite its deep discount, Cosmax's balance sheet remains robust, with a debt-to-equity ratio of 0.3x.

2. TSMC (TSE: 2330)

Taiwan Semiconductor Manufacturing Company (TSMC), the linchpin of the global semiconductor industry, is undervalued by 56.9% based on its NT$750.4 billion in free cash flow and leadership in AI chip manufacturing Top 10 Undervalued Stock Picks for 2025 - Analysis | ValueSense^[4]. While its stock price has lagged due to near-term supply-chain challenges, long-term fundamentals remain intact. Analysts project TSMC's revenue to grow at 18.7% annually through 2027, driven by demand for advanced-node chips in AI and 5G applications.

3. Shenzhen Newway Photomask Making (SHSE: 688401)

This Chinese photomask manufacturer is trading at CN¥44.81, a 43.2% discount to its estimated fair value of CN¥78.86 Global's Hidden Value: September 2025 Stocks That May Be …^[5]. The company reported CN¥544.03 million in H1 2025 revenue and CN¥106.43 million in net income, with earnings growth projected at 33.9% annually. Its competitive edge lies in its 20.99% net profit margin and 15.32% return on equity, outperforming peers in the capital-intensive semiconductor equipment sector.

4. Farasis Energy (SHSE: 688567)

Despite a challenging H1 2025 (revenue down 49.92% year-over-year), Farasis Energy—a battery manufacturer for electric vehicles—is undervalued by 33%, trading at CN¥20.9 versus a fair value of CN¥31.2 Farasis Energy (Gan Zhou) (SHSE:688567) Stock Forecast^[6]. Analysts forecast a turnaround within three years, with revenue growth of 27.9% annually and profitability restored by 2028. The company's partnerships with global automakers and its pivot to solid-state battery technology position it as a long-term winner in the EV transition.

Risk Considerations and Sector Dynamics

While these stocks offer compelling valuations, investors must weigh sector-specific risks. For instance, Cosmax's reliance on the volatile cosmetics sector and Farasis Energy's near-term losses require careful monitoring. Similarly, Shenzhen Newway's exposure to cyclical semiconductor demand could amplify volatility. However, the combination of strong cash flow generation, low valuation multiples, and above-market earnings growth mitigates these risks for long-term holders.

Conclusion: A Strategic Case for Value Investing

The September 2025 market presents a rare confluence of macroeconomic tailwinds and undervalued equities in Asia. Stocks like Cosmax, TSMC, Shenzhen Newway, and Farasis Energy exemplify the potential of value investing when grounded in rigorous intrinsic analysis. As the Fed's rate cuts and global AI adoption drive capital reallocation, these high-conviction picks offer asymmetric risk-reward profiles for investors with a 3–5 year horizon.