Three Undiscovered Gems In Hong Kong With Strong Fundamentals

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The Hong Kong market has experienced a mix of volatility and cautious optimism, with the Hang Seng Index recently gaining 0.85% despite broader concerns about global economic conditions. Amidst this backdrop, discerning investors may find opportunities in small-cap stocks that exhibit strong fundamentals and resilience. In the current environment, identifying stocks with solid financial health, consistent earnings growth, and robust business models can be particularly rewarding. Here are three undiscovered gems in Hong Kong that stand out for their strong fundamentals.

Top 10 Undiscovered Gems With Strong Fundamentals In Hong Kong

Name

Debt To Equity

Revenue Growth

Earnings Growth

Health Rating

S.A.S. Dragon Holdings

37.35%

4.13%

12.06%

★★★★★★

E-Commodities Holdings

23.22%

6.87%

31.81%

★★★★★★

PW Medtech Group

NA

17.93%

-2.70%

★★★★★★

China Leon Inspection Holding

17.06%

24.06%

27.08%

★★★★★★

Tianyun International Holdings

10.09%

-5.59%

-9.92%

★★★★★★

JiaXing Gas Group

17.72%

26.04%

22.07%

★★★★★☆

Hung Hing Printing Group

3.97%

-2.51%

33.57%

★★★★★☆

Changjiu Holdings

14.09%

12.87%

-4.74%

★★★★★☆

Time Interconnect Technology

212.50%

27.21%

15.01%

★★★★☆☆

Pizu Group Holdings

48.34%

-4.53%

-19.78%

★★★★☆☆

Click here to see the full list of 173 stocks from our SEHK Undiscovered Gems With Strong Fundamentals screener.

Let's review some notable picks from our screened stocks.

Kinetic Development Group

Simply Wall St Value Rating: ★★★★★☆

Overview: Kinetic Development Group Limited (SEHK:1277) is an investment holding company focused on the extraction and sale of coal products in the People’s Republic of China, with a market cap of HK$9.86 billion.

Operations: Kinetic Development Group Limited generates revenue primarily from the extraction and sale of coal products in China. The company has a market cap of HK$9.86 billion.

Kinetic Development Group, a small cap in Hong Kong's oil and gas sector, recently announced a special dividend of HKD 0.04 per share. Despite negative earnings growth (-22%) over the past year, it trades at 22.5% below its estimated fair value. The company's net debt to equity ratio stands at a satisfactory 4.7%, and interest payments on debt are well covered by EBIT (55.7x). Over five years, its debt to equity ratio has reduced from 26.6% to 17.6%.

SEHK:1277 Debt to Equity as at Aug 2024
SEHK:1277 Debt to Equity as at Aug 2024

YiChang HEC ChangJiang Pharmaceutical

Simply Wall St Value Rating: ★★★★★☆

Overview: YiChang HEC ChangJiang Pharmaceutical Co., Ltd. focuses on the research, development, production, and sale of pharmaceutical products with a market cap of approximately HK$8.39 billion.