The Hong Kong market has seen a mix of performance recently, with the Hang Seng Index gaining 2.14% amid a backdrop of cautious economic sentiment and mixed corporate earnings reports. Despite broader market uncertainties, there are opportunities to explore undervalued small-cap stocks that have shown notable insider action. In this context, identifying stocks with strong fundamentals and insider buying can be particularly promising for investors seeking value in the current climate.
Top 10 Undervalued Small Caps With Insider Buying In Hong Kong
Overview: Shanghai Chicmax Cosmetic manufactures and sells cosmetic products with a market cap of CN￥7.32 billion.
Operations: Shanghai Chicmax Cosmetic generates revenue primarily from the manufacture and sale of cosmetic products. For the period ending June 30, 2024, it reported a gross profit margin of 74.96% on a revenue of CN￥6.11 billion, with operating expenses largely driven by sales and marketing costs amounting to CN￥3.41 billion.
PE: 18.1x
Shanghai Chicmax Cosmetic, a small cap in Hong Kong, has shown promising signs of being undervalued. For the first half of 2024, they reported sales of CNY 3.5 billion and net income of CNY 401.2 million, up from CNY 1.6 billion and CNY 101 million respectively a year ago. Their earnings per share rose to CNY 1.01 from CNY 0.25 in the same period last year. Insider confidence is evident with significant share purchases by executives over recent months, reflecting their belief in future growth prospects driven by strong performance from key brands like KANS and newpage.
Overview: Lee & Man Paper Manufacturing is a company engaged in the production of packaging paper, tissue paper, and pulp with a market cap of approximately HK$24.36 billion.
Operations: The company generates revenue primarily from packaging paper, tissue paper, and pulp. For the period ending 2024-06-30, the gross profit margin was 12.49%. Operating expenses include significant allocations to general & administrative and sales & marketing costs.
PE: 6.2x
Lee & Man Paper Manufacturing has recently shown promising signs of being undervalued. For the first half of 2024, the company reported sales of HK$12.51 billion and net income of HK$805.69 million, a significant increase from last year’s figures. Basic earnings per share rose to HK$0.1769 from HK$0.0715 in 2023. Additionally, insider confidence is evident with Ho Chung Lee purchasing 483,000 shares worth over HK$1 million in June 2024, indicating strong belief in the company's future performance.
Overview: Skyworth Group is a diversified technology company primarily engaged in the production of smart household appliances, smart systems technology, modern services, and new energy solutions with a market cap of approximately CN￥7.89 billion.
Operations: Skyworth Group generates revenue primarily from its 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). Recently, the company reported a gross profit margin of 14.36% for the period ending June 30, 2024, reflecting its cost management efforts amidst varying operating expenses across different segments.
PE: 5.2x
Skyworth Group's recent financials show promising signs for investors seeking undervalued small caps. For the half-year ending June 30, 2024, Skyworth reported a net income of ￥384 million (up from ￥302 million) and basic earnings per share of ￥0.1631 (up from ￥0.1195). CEO Chi Shi's insider confidence is evident with their purchase of 2,188,000 shares valued at approximately ￥6.3 million in August 2024. The company’s expansion into the Russian market underscores its strategic growth ambitions and commitment to technological innovation.
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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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