The Hong Kong market has seen a mix of challenges and opportunities recently, with the Hang Seng Index experiencing slight declines amid global economic uncertainties. As investors navigate these turbulent waters, identifying undervalued small-cap stocks with insider buying can offer unique investment opportunities. In this article, we will explore three such stocks in Hong Kong that have garnered attention for their potential value and insider confidence.
Top 10 Undervalued Small Caps With Insider Buying In Hong Kong
| Name | PE | PS | Discount to Fair Value | Value Rating |
|---|---|---|---|---|
| Shenzhen International Holdings | 5.7x | 0.7x | 25.01% | ★★★★★★ |
| Shanghai Chicmax Cosmetic | 14.5x | 1.8x | -113.67% | ★★★★☆☆ |
| Ferretti | 10.2x | 0.7x | 49.98% | ★★★★☆☆ |
| EVA Precision Industrial Holdings | 4.5x | 0.2x | 17.50% | ★★★★☆☆ |
| Meilleure Health International Industry Group | 25.9x | 9.5x | 21.94% | ★★★☆☆☆ |
| Analogue Holdings | 13.4x | 0.2x | 41.33% | ★★★☆☆☆ |
| Skyworth Group | 5.0x | 0.1x | -153.85% | ★★★☆☆☆ |
| Lee & Man Paper Manufacturing | 5.8x | 0.3x | -18.81% | ★★★☆☆☆ |
| CN Logistics International Holdings | 19.8x | 0.5x | 23.22% | ★★★☆☆☆ |
| Comba Telecom Systems Holdings | NA | 0.6x | 36.88% | ★★★☆☆☆ |
Underneath we present a selection of stocks filtered out by our screen.
Comba Telecom Systems Holdings (SEHK:2342)
Simply Wall St Value Rating: ★★★☆☆☆
Overview: Comba Telecom Systems Holdings focuses on providing operator telecommunication services and wireless telecommunications network system equipment and services, with a market cap of HK$2.89 billion.
Operations: The company generates revenue primarily from Wireless Telecommunications Network System Equipment and Services (HK$4941.02 million) and Operator Telecommunication Services (HK$156.22 million). For the period ending June 30, 2023, it reported a gross profit of HK$1875.39 million with a gross profit margin of 28.63%.
PE: -11.8x
Comba Telecom Systems Holdings, a small cap in Hong Kong, has faced challenges with earnings declining by 1.7% annually over the past five years and recent volatility in its share price. Insider confidence is evident with significant share purchases throughout 2024. The company reported a projected loss of HK$160 million for H1 2024 due to delays in network projects and lower other income, contrasting sharply with the HK$112 million profit from H1 2023. Despite these setbacks, their participation at MWC Shanghai highlights ongoing industry engagement and potential future growth opportunities.
Skyworth Group (SEHK:751)
Simply Wall St Value Rating: ★★★☆☆☆
Overview: Skyworth Group is a diversified technology company engaged in smart household appliances, smart systems technology, modern services, and new energy business with a market cap of CN¥7.23 billion.
Operations: Skyworth Group generates revenue primarily from its Smart Household Appliances Business (CN¥32.51 billion), New Energy Business (CN¥20.21 billion), and Smart Systems Technology Business (CN¥9.84 billion). The company experienced a gross profit margin of 14.36% as of June 30, 2024, with total revenue reaching CN¥66.73 billion for the same period.
PE: 5.0x
Skyworth Group, a small cap stock in Hong Kong, recently reported earnings for the half year ending June 30, 2024. Sales reached CNY 265 million while net income rose to CNY 384 million from CNY 302 million the previous year. Their earnings per share increased to CNY 0.1631 from CNY 0.1195. Notably, insider confidence is evident as Chi Shi purchased over two million shares worth approximately US$6.3 million between August and September this year, reflecting a significant ownership increase of over 16%.
Ferretti (SEHK:9638)
Simply Wall St Value Rating: ★★★★☆☆
Overview: Ferretti specializes in the design, construction, and marketing of yachts and recreational boats with a market capitalization of €1.29 billion.
Operations: The primary revenue stream is from the design, construction, and marketing of yachts and recreational boats, generating €1.30 billion as of 2024-09-17. The gross profit margin fluctuated between 21.60% and 37.62%, while net income margin ranged from 2.60% to 6.71%. Operating expenses include significant allocations towards general & administrative costs, D&A expenses, and sales & marketing efforts.
PE: 10.2x
Ferretti, a small-cap yacht manufacturer in Hong Kong, reported increased sales of €695.1 million for the first half of 2024, up from €628.18 million last year, with net income rising to €43.86 million from €40.45 million. Insider confidence is evident as key executives purchased shares throughout 2023 and 2024. Despite recent executive changes, including Mr. Stefano de Vivo's departure and Mr. Jiang Kui's appointment as Chairman on August 29, the company remains stable with no material adverse impact expected on operations or earnings growth projections at 12% annually.
- Dive into the specifics of Ferretti here with our thorough valuation report.
Gain insights into Ferretti's historical performance by reviewing our past performance report.
Key Takeaways
- Unlock our comprehensive list of 10 Undervalued SEHK Small Caps With Insider Buying by clicking here.
- Got skin in the game with these stocks? Elevate how you manage them by using Simply Wall St's portfolio, where intuitive tools await to help optimize your investment outcomes.
- Simply Wall St is your key to unlocking global market trends, a free user-friendly app for forward-thinking investors.
Seeking Other Investments?
- 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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