Undiscovered Gems in China to Explore This October 2024

As October 2024 unfolds, China's stock market has shown resilience with significant gains in key indices, buoyed by optimism surrounding Beijing's comprehensive support measures despite ongoing economic challenges. In this dynamic environment, identifying promising small-cap stocks can be particularly rewarding as these companies often benefit from targeted government initiatives and market shifts.

Top 10 Undiscovered Gems With Strong Fundamentals In China

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
Shandong Link Science and TechnologyLtd	2.65%	15.68%	10.94%	★★★★★★
Changsha Tongcheng HoldingsLtd	8.27%	-12.36%	-6.10%	★★★★★★
Hangzhou Xili Intelligent TechnologyLtd	NA	14.50%	3.31%	★★★★★★
Shenzhen Tongye TechnologyLtd	4.87%	9.24%	-21.23%	★★★★★★
Forest Packaging GroupLtd	14.94%	-8.49%	-7.06%	★★★★★★
Sinotherapeutics	NA	76.64%	0.81%	★★★★★★
Aeolus Tyre	35.66%	-1.22%	10.27%	★★★★★☆
Hubei Forbon TechnologyLtd	22.99%	15.04%	2.15%	★★★★★☆
Sinomag Technology	51.95%	17.08%	3.75%	★★★★☆☆
Changshu Fengfan Power Equipment	85.99%	7.52%	27.60%	★★★★☆☆

Click here to see the full list of 894 stocks from our Chinese Undiscovered Gems With Strong Fundamentals screener.

Let's review some notable picks from our screened stocks.

Zheshang Securities Zhejiang Expressway (SHSE:508001)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Zheshang Securities Zhejiang Expressway primarily operates in the transportation infrastructure sector and has a market capitalization of CN¥3.62 billion.

Operations: The company generates revenue primarily from the transportation infrastructure segment, amounting to CN¥746.12 million.

Zheshang Securities Zhejiang Expressway, a smaller player in the financial sector, reported a net income of CNY 45.81 million for the first half of 2024, up from CNY 26.51 million the previous year. Its interest payments are well-covered by EBIT at 7.9 times, indicating strong debt management. The company trades at 59% below its estimated fair value and has high-quality earnings with more cash than total debt, suggesting robust financial health and potential undervaluation in the market.

• Navigate through the intricacies of Zheshang Securities Zhejiang Expressway with our comprehensive health report here.

• Evaluate Zheshang Securities Zhejiang Expressway's historical performance by accessing our past performance report.

Zhejiang Guyuelongshan Shaoxing WineLtd (SHSE:600059)

Simply Wall St Value Rating: ★★★★★★

Overview: Zhejiang Guyuelongshan Shaoxing Wine Co., Ltd is engaged in the production and sale of rice wine, liquor, and edible alcohol both within China and internationally, with a market capitalization of CN¥8.48 billion.

Operations: Guyuelongshan generates revenue primarily from the sale of rice wine, liquor, and edible alcohol. The company's net profit margin has been observed at 15%.

Zhejiang Guyuelongshan, a notable player in the beverage industry, reported a significant earnings growth of 98.8% over the past year, outpacing the industry's 19.9%. The company is debt-free and boasts a favorable price-to-earnings ratio of 21.1x compared to the CN market's 33.5x, suggesting good value potential. Recent financials show sales at CN¥877 million and net income at CN¥94 million for H1 2024, reflecting steady performance amidst competitive pressures.

• Click to explore a detailed breakdown of our findings in Zhejiang Guyuelongshan Shaoxing WineLtd's health report.

• Review our historical performance report to gain insights into Zhejiang Guyuelongshan Shaoxing WineLtd's's past performance.

Jiangsu ChengXing Phosph-Chemicals (SHSE:600078)

Simply Wall St Value Rating: ★★★★★☆

Overview: Jiangsu ChengXing Phosph-Chemicals Co., Ltd. engages in the production and sale of phosphorous chemical products, with a market cap of CN¥4.17 billion.

Operations: ChengXing Phosph-Chemicals generates revenue primarily from the sale of phosphorous chemical products. The company's financial performance is characterized by its market cap of CN¥4.17 billion, reflecting its scale in the industry.

Jiangsu ChengXing Phosph-Chemicals, a nimble player in the chemical sector, reported CNY 1.62 billion in revenue for the first half of 2024, up from CNY 1.46 billion last year. Despite a net loss of CNY 16.71 million, this marks an improvement from the previous year's loss of CNY 113.33 million. The company has been added to key Shanghai indices and boasts high-quality earnings with interest payments well-covered by EBIT at five times coverage, though its net debt to equity ratio remains high at 52.6%.

• Take a closer look at Jiangsu ChengXing Phosph-Chemicals' potential here in our health report.

• Gain insights into Jiangsu ChengXing Phosph-Chemicals' historical performance by reviewing our past performance report.

Seize The Opportunity

• Click this link to deep-dive into the 894 companies within our Chinese Undiscovered Gems With Strong Fundamentals screener.
• Have a stake in these businesses? Integrate your holdings into Simply Wall St's portfolio for notifications and detailed stock reports.
• Elevate your portfolio with Simply Wall St, the ultimate app for investors seeking global market coverage.

Want To Explore Some Alternatives?

• Explore high-performing small cap companies that haven't yet garnered significant analyst attention.
• Fuel your portfolio with companies showing strong growth potential, backed by optimistic outlooks both from analysts and management.
• Find companies with promising cash flow potential yet trading below their fair value.

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.

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