As global markets experience volatility and economic indicators point to a potential slowdown, the Hong Kong market has shown resilience, with small-cap stocks presenting unique opportunities. In this environment, identifying undervalued small-cap stocks with insider action can be particularly rewarding for investors seeking growth potential amidst broader market uncertainties.
Top 5 Undervalued Small Caps With Insider Buying In Hong Kong
Overview: Lee & Man Paper Manufacturing is a company engaged in the production of packaging and tissue paper, with a market capitalization of HK$16.71 billion.
Operations: The company generates revenue from three primary segments: Packaging Paper, Tissue Paper, and Pulp. Over the observed periods, net income margin has shown a varied trend, with a recent figure of 5.96% as of June 2024.
PE: 5.8x
Lee & Man Paper Manufacturing, a smaller player in Hong Kong's market, recently declared an interim dividend of HK$0.062 per share for the first half of 2024. They reported sales of HK$12.51 billion and net income of HK$805.69 million, significantly up from last year’s figures. Notably, insider confidence is evident with Ho Chung Lee purchasing 483,000 shares worth over HK$1 million in July 2024. The company relies entirely on external borrowing but maintains a positive earnings growth forecast at 5.83% annually.
Overview: Comba Telecom Systems Holdings specializes in providing wireless telecommunications network system equipment and services, as well as operator telecommunication services, with a market cap of approximately HK$3.2 billion.
Operations: The company generates revenue primarily from Wireless Telecommunications Network System Equipment and Services (HK$4941.02 million) and Operator Telecommunication Services (HK$156.22 million). For the period ending September 30, 2023, it reported a gross profit margin of 28.23% on a revenue of HK$6266.16 million, with operating expenses totaling HK$1720.19 million and net income at HK$109.36 million resulting in a net income margin of 1.75%.
PE: -11.9x
Comba Telecom Systems Holdings, a small-cap player in Hong Kong, has seen its earnings decline by 1.7% annually over the past five years. Recently, they announced a significant projected loss of HK$160 million for H1 2024 due to delayed telecom projects and lower income from equity investments. Insider confidence is evident with recent share purchases by senior management in June 2024. The company decided against declaring an interim dividend for the six months ending June 30, 2024.
Overview: Skyworth Group is a diversified company engaged in smart household appliances, smart systems technology, modern services, and new energy business with a market cap of approximately HK$7.36 billion.
Operations: Skyworth Group's primary revenue streams include 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). The company's gross profit margin has shown variability, reaching 14.36% in the most recent period ending June 2024.
PE: 4.7x
Skyworth Group, a smaller player in the Hong Kong market, has shown promising insider confidence with CEO Chi Shi acquiring 2.19 million shares valued at A$6.3 million, reflecting a 16.52% increase in their holdings. For the half-year ending June 30, 2024, Skyworth reported sales of CNY265 million and net income of CNY384 million compared to CNY302 million a year ago. Their expansion into Russia highlights their commitment to innovation and growth despite higher risk funding sources.
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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:2314 SEHK:2342 and SEHK:751.
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