There are a few different ways to find cheap ASX shares.

One strategy is to look for businesses trading below their book value. That means the share price is cheap compared to the balance sheet value. For example, if a business had a balance sheet net value of $100 million and the market capitalisation was $90 million, it'd be trading at a 10% discount.

Let's explore two attractive ASX shares that are trading at a discount larger than 10%.

Bailador Technology Investments Ltd (ASX: BTI)

Bailador is a very interesting company. It invests in unlisted IT companies with global addressable markets that have a "proven business model with attractive unit economics" and the ability to generate repeat revenue.  

It's invested in areas such as digital healthcare, hotel software, volunteer management software, and the fitness and wellness sector.

The company has a track record of seeing its investments increase in value, and occasionally, a portfolio company is taken over at a significantly higher price than its balance sheet value.

In January, Bailador announced its Updoc valuation had increased by 50% to $30 million, and the Mosh valuation had increased by 33.3% to $10 million.

At 31 December 2024, it had a post-tax net tangible assets (NTA) value per share of $1.67, so the ASX share is trading at a 26% discount to this.

Brickworks Ltd (ASX: BKW)

Brickworks is best known as a leading manufacturer of building products in Australia. It is also one of the biggest roofing and brickmaker businesses in the country.

However, the majority of the book value for this S&P/ASX 200 Index (ASX: XJO) share is not in the building product manufacturing side of the business.

Most of its balance sheet net asset value (NAV) is held in Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares, along with 50 per cent of an industrial property trust that it owns with partner Goodman Group (ASX: GMG).

These are great assets, in my view, providing defensive and growing cash flow for Brickworks to offset any volatility of earnings for building products during a downturn.

The business said it had total inferred assets per share of $35.79 at 31 July 2024, and the Soul Patts share price has little changed since then. The Brickworks share price is currently trading at a 27% discount to this underlying asset value.

In the long term, I think the industrial property assets could rise in value thanks to tailwinds like e-commerce adoption growth and overall population growth in Australia.