With the Hong Kong market showing a modest gain in the Hang Seng Index amidst global economic fluctuations, investors are increasingly looking for opportunities in undervalued small-cap stocks. Despite broader market volatility, these smaller companies can often present unique growth potential, particularly when insider buying signals confidence from those closest to the business. In this article, we will explore three such small-cap stocks in Hong Kong that have recently seen insider buying activity.
Top 10 Undervalued Small Caps With Insider Buying In Hong Kong
| Name | PE | PS | Discount to Fair Value | Value Rating |
|---|---|---|---|---|
| Ever Sunshine Services Group | 5.6x | 0.4x | 36.44% | ★★★★★☆ |
| Lee & Man Paper Manufacturing | 6.7x | 0.4x | 35.77% | ★★★★★☆ |
| Wasion Holdings | 11.6x | 0.8x | 39.48% | ★★★★☆☆ |
| Nissin Foods | 13.1x | 1.2x | 43.73% | ★★★★☆☆ |
| K. Wah International Holdings | 6.8x | 0.9x | 28.62% | ★★★★☆☆ |
| Kinetic Development Group | 4.4x | 1.9x | 21.73% | ★★★★☆☆ |
| Comba Telecom Systems Holdings | 348.6x | 0.4x | 46.52% | ★★★★☆☆ |
| Skyworth Group | 5.3x | 0.1x | -240.89% | ★★★☆☆☆ |
| EVA Precision Industrial Holdings | 4.9x | 0.2x | 7.55% | ★★★☆☆☆ |
| China Leon Inspection Holding | 9.8x | 0.7x | 36.50% | ★★★☆☆☆ |
Underneath we present a selection of stocks filtered out by our screen.
Kinetic Development Group (SEHK:1277)
Simply Wall St Value Rating: ★★★★☆☆
Overview: Kinetic Development Group is involved in property development and investment, with a market cap of CN¥3.45 billion.
Operations: Kinetic Development Group generates revenue primarily through its sales, which have shown a consistent increase over multiple periods. The company has experienced fluctuations in its gross profit margin, with a notable high of 67.35% as of March 31, 2022. Operating expenses and non-operating expenses also contribute significantly to the cost structure, impacting net income margins.
PE: 4.4x
Kinetic Development Group, a small cap in Hong Kong, has recently garnered attention for its potential undervaluation. Their funding is primarily through external borrowing, which adds some risk but also underscores their strategic financial management. Notably, insider confidence is evident with key figures purchasing shares consistently over the past year. A board meeting on July 31 announced plans to consider a special dividend on August 12, 2024. This mix of insider activity and upcoming dividends could signal promising prospects ahead.
Comba Telecom Systems Holdings (SEHK:2342)
Simply Wall St Value Rating: ★★★★☆☆
Overview: Comba Telecom Systems Holdings specializes in providing wireless telecommunications network system equipment and services, as well as operator telecommunication services, with a market cap of HK$2.84 billion.
Operations: The company generates revenue primarily from Wireless Telecommunications Network System Equipment and Services (HK$5824.14 million) and Operator Telecommunication Services (HK$157.83 million). For the period ending September 30, 2023, it reported a gross profit margin of 28.23%.
PE: 348.6x
Comba Telecom Systems Holdings, a smaller player in Hong Kong's market, has recently seen insider confidence with Tung Ling Fok purchasing 1.83 million shares valued at HK$930,371. This activity indicates potential belief in the company's future despite recent challenges. For the first half of 2024, Comba expects a loss of up to HK$160 million due to delayed network projects and fair value losses on equity investments. Additionally, the company has initiated a share repurchase program authorized to buy back up to 276.6 million shares by its next AGM.
- Delve into the full analysis valuation report here for a deeper understanding of Comba Telecom Systems Holdings.
Gain insights into Comba Telecom Systems Holdings' past trends and performance with our Past report.
Wasion Holdings (SEHK:3393)
Simply Wall St Value Rating: ★★★★☆☆
Overview: Wasion Holdings specializes in providing advanced metering infrastructure and distribution operations, with a market cap of approximately CN¥2.5 billion.
Operations: The company generates revenue from Advanced Distribution Operations (CN¥2.48 billion), Power Advanced Metering Infrastructure (CN¥2.67 billion), and Communication and Fluid Advanced Metering Infrastructure (CN¥2.21 billion). Over recent periods, the gross profit margin has shown an upward trend, reaching 35.59% as of December 31, 2023.
PE: 11.6x
Wasion Holdings has shown significant insider confidence with Founder & Executive Chairman Wei Ji purchasing 500,000 shares for HK$3.17 million in recent months, increasing their stake by 9.37%. The company recently secured major smart meter contracts worth EUR31.62 million in Hungary and USD9.42 million and USD5.74 million in Singapore and Malaysia, respectively, indicating strong international demand for its products. Despite relying on higher-risk external borrowing for funding, Wasion's earnings are forecasted to grow by 25.8% annually, suggesting potential growth opportunities ahead.
- Dive into the specifics of Wasion Holdings here with our thorough valuation report.
Assess Wasion Holdings' past performance with our detailed historical performance reports.
Summing It All Up
- Take a closer look at our Undervalued SEHK Small Caps With Insider Buying list of 13 companies by clicking here.
- Already own these companies? Link your portfolio to Simply Wall St and get alerts on any new warning signs to your stocks.
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Want To Explore Some Alternatives?
- Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
- Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.
- Find companies with promising cash flow potential yet trading below their fair value.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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