As global markets navigate economic slowdowns and investor sentiment remains cautious, the Hong Kong market has shown resilience amid these challenges. In this environment, growth companies with high insider ownership can offer a unique advantage, as significant insider stakes often signal strong confidence in the company's future prospects.
Top 10 Growth Companies With High Insider Ownership In Hong Kong
Overview: Dongyue Group Limited, with a market cap of HK$9.13 billion, is an investment holding company that manufactures, distributes, and sells polymers, organic silicone, refrigerants, dichloromethane, polyvinyl chloride (PVC), liquid alkali, and other products in the People's Republic of China and internationally.
Operations: The company's revenue segments include CN¥4.31 billion from polymers, CN¥5.53 billion from refrigerants, CN¥5.12 billion from organic silicon, and CN¥1.12 billion from dichloromethane PVC and liquid alkali.
Insider Ownership: 15.4%
Earnings Growth Forecast: 43.6% p.a.
Dongyue Group's earnings are forecast to grow significantly at 43.58% per year, outpacing the Hong Kong market's 11.7%. Despite a recent dip in profit margins from 14.3% to 5%, the company reported improved net income of CNY 307.65 million for H1 2024 and basic earnings per share rising from CNY 0.13 to CNY 0.17. The stock trades near its fair value, with substantial insider ownership indicating confidence in its growth prospects despite auditor changes.
Overview: Meituan operates as a technology retail company in the People’s Republic of China with a market cap of HK$724.49 billion.
Operations: The company's revenue segments include CN¥228.13 billion from Core Local Commerce and CN¥77.56 billion from New Initiatives.
Insider Ownership: 11.6%
Earnings Growth Forecast: 25.8% p.a.
Meituan's recent earnings report showed strong growth, with sales reaching CNY 155.53 billion and net income doubling to CNY 16.72 billion for H1 2024. The company announced a $1 billion share repurchase program, reflecting confidence in its future prospects. Despite significant insider selling over the past quarter, Meituan's revenue and earnings are forecast to grow faster than the Hong Kong market at 12.9% and 25.8% per year respectively, bolstering its position as a growth company with high insider ownership.
Overview: Digital China Holdings Limited (SEHK:861) is an investment holding company that offers big data products and solutions to government and enterprise customers mainly in Mainland China, with a market cap of HK$5.44 billion.
Operations: The company's revenue segments include CN¥3.39 billion from Big Data Products and Solutions, CN¥5.31 billion from Software and Operating Services, and CN¥10.03 billion from Traditional and Localization Services.
Insider Ownership: 23.5%
Earnings Growth Forecast: 59.3% p.a.
Digital China Holdings reported sales of CNY 7.01 billion for H1 2024, up from CNY 6.68 billion a year ago, but net income dropped to CNY 10.81 million from CNY 40.36 million due to heightened competition and increased expenses in its subsidiary DCITS. Despite this, the company remains attractive for growth investors with substantial insider ownership and is expected to become profitable over the next three years, trading at a significant discount compared to peers.
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:189 SEHK:3690 and SEHK:861.
