As global markets react to the recent Federal Reserve rate cut, Hong Kong's Hang Seng Index has seen a notable uptick, gaining 5.12% in a holiday-shortened week. This positive sentiment provides an opportune backdrop for exploring undervalued small-cap stocks with insider action that could present compelling investment opportunities. Identifying promising stocks often involves looking at companies with strong fundamentals and favorable market conditions, especially in times of economic shifts such as the current rate cuts.
Top 5 Undervalued Small Caps With Insider Buying In Hong Kong
Overview: Shanghai Chicmax Cosmetic is engaged in the manufacture and sale of cosmetic products with a market cap of CN￥8.50 billion.
Operations: The company's primary revenue stream is from the manufacture and sale of cosmetic products, with recent quarterly revenue reaching CN￥6106.30 million. Notably, the gross profit margin has shown a trend of increase, reaching 74.96% as of June 30, 2024.
PE: 15.4x
Shanghai Chicmax Cosmetic, a small cap in Hong Kong, has shown significant growth potential with earnings forecasted to rise 25.61% annually. Recent financials highlight a surge in sales to CNY 3.5 billion and net income reaching CNY 401 million for the half year ending June 2024, compared to CNY 1.6 billion and CNY 101 million respectively last year. Insider confidence is evident with notable share purchases throughout the past months, indicating strong belief in future prospects.
Overview: Lee & Man Paper Manufacturing is a company engaged in the production of pulp, tissue paper, and packaging paper with a market cap of HK$22.35 billion.
Operations: Lee & Man Paper Manufacturing generates revenue primarily from packaging paper and tissue paper, with packaging paper being the largest contributor. The company has seen fluctuations in its gross profit margin, reaching a peak of 29.08% in Q4 2017 and declining to 7.72% by Q2 2023. Operating expenses have consistently impacted profitability, with general and administrative expenses being a significant component.
PE: 6.1x
Lee & Man Paper Manufacturing, a small cap in Hong Kong, recently declared an interim dividend of HK$0.062 per share for the six months ending June 30, 2024. The company reported sales of HK$12.51 billion and net income of HK$805.69 million for the same period, showing significant growth from last year’s figures. Insider confidence is evident with Ho Chung Lee purchasing 483,000 shares worth over HK$1 million in July 2024, indicating strong belief in the company's future prospects despite its reliance on external borrowing for funding.
Overview: Skyworth Group is a diversified technology company engaged in smart household appliances, smart systems technology, modern services, and new energy business with a market cap of approximately CN￥7.45 billion.
Operations: The company generates revenue primarily from Smart Household Appliances Business (CN￥32.51 billion), New Energy Business (CN￥20.21 billion), Smart Systems Technology Business (CN￥9.84 billion), and Modern Services and Others (CN￥5.80 billion). Gross profit margin has shown variations, with a recent figure of 14.36% as of June 2024, reflecting changes in cost structures over time.
PE: 5.2x
Skyworth Group, a small cap in Hong Kong, recently reported half-year sales of ￥265 million and net income of ￥384 million, showing growth from the previous year. CEO and Executive Director Chi Shi's insider confidence is evident with their purchase of 2.19 million shares worth approximately ￥6.30 million in August 2024, increasing their stake by 16%. The company is expanding into the Russian market with innovative products like the BM series TVs and portable TVs featuring advanced technology.
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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.
Companies discussed in this article include SEHK:2145 SEHK:2314 and SEHK:751.
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