Exploring 3 Undervalued Small Caps In Hong Kong With Insider Action

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In recent months, the Hong Kong market has experienced a mix of volatility and opportunity, with the Hang Seng Index showing modest declines amid global economic uncertainties. Despite this backdrop, small-cap stocks in Hong Kong have garnered attention due to their potential for growth and insider activity. When evaluating small-cap stocks in such a dynamic environment, factors like solid fundamentals, strategic positioning within their industries, and insider buying can signal promising opportunities.

Top 10 Undervalued Small Caps With Insider Buying In Hong Kong

Name

PE

PS

Discount to Fair Value

Value Rating

Ever Sunshine Services Group

5.5x

0.4x

32.52%

★★★★★☆

Lee & Man Paper Manufacturing

6.6x

0.4x

36.32%

★★★★★☆

Wasion Holdings

11.0x

0.8x

42.10%

★★★★☆☆

Kinetic Development Group

4.3x

1.9x

23.66%

★★★★☆☆

Shenzhen International Holdings

8.0x

0.7x

25.02%

★★★★☆☆

Nissin Foods

13.9x

1.3x

49.87%

★★★★☆☆

China Leon Inspection Holding

9.8x

0.7x

36.30%

★★★★☆☆

Comba Telecom Systems Holdings

352.7x

0.4x

46.14%

★★★★☆☆

Skyworth Group

5.4x

0.1x

-250.66%

★★★☆☆☆

EVA Precision Industrial Holdings

5.1x

0.2x

3.48%

★★★☆☆☆

Click here to see the full list of 14 stocks from our Undervalued SEHK Small Caps With Insider Buying screener.

Let's take a closer look at a couple of our picks from the screened companies.

Kinetic Development Group

Simply Wall St Value Rating: ★★★★☆☆

Overview: Kinetic Development Group is engaged in property development and investment, with a market cap of approximately CN¥2.34 billion.

Operations: Kinetic Development Group generates revenue primarily from its core operations, with a notable gross profit margin of 0.59073% as of December 31, 2023. The company's cost of goods sold (COGS) and operating expenses are significant components impacting its overall financial performance.

PE: 4.3x

Kinetic Development Group, a small cap in Hong Kong, has recently shown insider confidence with share purchases in the last quarter. Despite primarily relying on higher-risk external borrowing for funding, the company declared a final dividend of HK$0.05 per share for 2023 at its AGM on May 7, 2024. Additionally, they approved significant amendments to their memorandum and articles of association during this meeting. These moves could indicate strategic positioning and potential growth opportunities ahead.

SEHK:1277 Share price vs Value as at Aug 2024
SEHK:1277 Share price vs Value as at Aug 2024

Shenzhen International Holdings

Simply Wall St Value Rating: ★★★★☆☆

Overview: Shenzhen International Holdings operates in logistics, toll roads, and environmental protection businesses with a market cap of HK$19.74 billion.