As global markets navigate through volatility and economic uncertainties, the Hong Kong market has shown resilience with the Hang Seng Index gaining 0.85% recently. In this environment, growth companies with high insider ownership can be particularly appealing as they often signal strong internal confidence and alignment of interests between shareholders and management. When evaluating stocks in such a climate, focusing on firms where insiders hold significant stakes can provide added assurance of their commitment to driving long-term value. Here are three standout growth companies on the SEHK that exemplify these qualities in August 2024.
Top 10 Growth Companies With High Insider Ownership In Hong Kong
Overview: Kuaishou Technology, an investment holding company with a market cap of HK$196.19 billion, offers live streaming, online marketing, and other services in the People’s Republic of China.
Operations: The company generates CN¥114.72 billion from domestic operations and CN¥2.94 billion from overseas activities.
Insider Ownership: 19.2%
Kuaishou Technology, known for its substantial insider ownership, is trading at 53% below estimated fair value and has a high forecasted annual profit growth of 22.4%, outpacing the Hong Kong market. Despite slower revenue growth (9.7%), it remains profitable with significant upgrades to its Kling AI video generation model, enhancing user engagement and expanding subscription services. Recent earnings showed strong performance with CNY 4.12 billion net income for Q1 2024, reversing losses from the previous year.
Overview: Pacific Textiles Holdings Limited manufactures and trades textile products across various regions including China, Vietnam, Bangladesh, Hong Kong, and internationally, with a market cap of HK$2.26 billion.
Operations: The company's revenue primarily stems from the manufacturing and trading of textile products, amounting to HK$4.67 billion.
Insider Ownership: 11.2%
Pacific Textiles Holdings shows strong insider ownership and is trading at 45.8% below its estimated fair value. However, the company's revenue growth forecast of 11.8% per year is slower than desired for high-growth companies, and recent earnings have declined with net income dropping from HK$268.57 million to HK$167.12 million year-over-year. Despite a significant earnings growth forecast of 37.67% annually, profit margins have decreased from 5.4% to 3.6%.
Overview: Zylox-Tonbridge Medical Technology Co., Ltd. is a medical device company that offers neuro- and peripheral-vascular interventional devices in China and internationally, with a market cap of HK$3.29 billion.
Operations: The company generates revenue from the sales of neurovascular and peripheral-vascular interventional surgical devices, amounting to CN¥527.75 million.
Insider Ownership: 18.7%
Zylox-Tonbridge Medical Technology is expected to see revenue growth of 24.1% per year, surpassing the Hong Kong market average. The company anticipates becoming profitable within three years, driven by a strong product portfolio and strategic sales efforts. Recent guidance indicates a significant revenue increase to at least RMB 360 million for H1 2024, alongside an expected net profit of RMB 50 million. High insider ownership aligns with these positive growth prospects.
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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.The analysis only considers stock directly held by insiders. It does not include indirectly owned stock through other vehicles such as corporate and/or trust entities. All forecast revenue and earnings growth rates quoted are in terms of annualised (per annum) growth rates over 1-3 years.
Companies discussed in this article include SEHK:1024 SEHK:1382 and SEHK:2190.
