Insider Action Backs These 3 Undervalued Small Caps In Hong Kong

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As global markets experience shifts with central banks in Europe cutting rates and U.S. small-cap indices like the Russell 2000 outperforming, attention turns to Hong Kong's market dynamics where the Hang Seng Index has seen a decline. In this context, identifying promising small-cap stocks involves examining factors such as insider activity and valuation metrics, which can provide insights into potential opportunities amidst broader economic fluctuations.

Top 10 Undervalued Small Caps With Insider Buying In Hong Kong

Name

PE

PS

Discount to Fair Value

Value Rating

Ferretti

11.2x

0.7x

45.72%

★★★★★☆

Edianyun

NA

0.6x

39.05%

★★★★★☆

Vesync

7.2x

1.1x

-3.69%

★★★★☆☆

Lion Rock Group

5.4x

0.4x

49.92%

★★★★☆☆

Cheerwin Group

11.2x

1.4x

47.07%

★★★★☆☆

Gemdale Properties and Investment

NA

0.2x

44.97%

★★★★☆☆

China Lesso Group Holdings

5.8x

0.4x

-502.68%

★★★☆☆☆

Skyworth Group

5.6x

0.1x

-296.42%

★★★☆☆☆

Lee & Man Paper Manufacturing

7.1x

0.4x

-45.15%

★★★☆☆☆

Emperor International Holdings

NA

0.9x

25.53%

★★★☆☆☆

Click here to see the full list of 10 stocks from our Undervalued SEHK Small Caps With Insider Buying screener.

Let's dive into some prime choices out of from the screener.

Vesync

Simply Wall St Value Rating: ★★★★☆☆

Overview: Vesync is a company that specializes in the development and sale of appliances and tools, with a market capitalization of approximately HK$2.36 billion.

Operations: The company generates revenue primarily from the Appliance & Tool segment, with recent figures reaching $604.75 million. Its gross profit margin has shown an upward trend, recently recorded at 48.46%. Operating expenses are significant, with sales and marketing being a major component.

PE: 7.2x

Vesync, a company recently added to the S&P Global BMI Index, showcases potential for growth with its diverse market reach and innovative products. The company's sales for the first half of 2024 reached US$296 million, up from US$277 million in 2023. Insider confidence is evident as Zhaojun Chen purchased 200,000 shares valued at approximately HK$829K. Despite reliance on higher-risk external borrowing for funding, Vesync's strategic focus on non-Amazon channels and operational efficiency improvements bolster its prospects.

SEHK:2148 Ownership Breakdown as at Oct 2024
SEHK:2148 Ownership Breakdown as at Oct 2024

Cheerwin Group

Simply Wall St Value Rating: ★★★★☆☆

Overview: Cheerwin Group is a company engaged in the production and distribution of household care, personal care, and pet products, with a focus on consumer goods.