Exploring Shanxi Huaxiang Group And 2 Hidden Small Cap Opportunities

In the wake of a significant rally driven by optimism over potential policy changes following the U.S. election, small-cap stocks have shown notable movement, with the Russell 2000 Index experiencing an impressive surge. As investors navigate these dynamic market conditions, identifying promising small-cap stocks can be particularly rewarding due to their potential for growth and resilience in shifting economic landscapes.

Top 10 Undiscovered Gems With Strong Fundamentals

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
Impellam Group	31.12%	-5.43%	-6.86%	★★★★★★
Ovostar Union	0.01%	10.19%	49.85%	★★★★★★
African Rainbow Capital Investments	NA	37.52%	38.29%	★★★★★★
Tianyun International Holdings	10.09%	-5.59%	-9.92%	★★★★★★
Bakrie & Brothers	22.66%	7.78%	13.50%	★★★★★☆
Societe de Limonaderies et de Boissons Rafraichissantes d'Afrique	39.37%	4.38%	-14.46%	★★★★★☆
Steamships Trading	33.60%	4.17%	3.90%	★★★★★☆
Arab Banking Corporation (B.S.C.)	213.15%	18.58%	29.63%	★★★★☆☆
Wilson	64.79%	30.09%	68.29%	★★★★☆☆
A2B Australia	15.83%	-7.78%	25.44%	★★★★☆☆

Click here to see the full list of 4648 stocks from our Undiscovered Gems With Strong Fundamentals screener.

We're going to check out a few of the best picks from our screener tool.

Shanxi Huaxiang Group (SHSE:603112)

Simply Wall St Value Rating: ★★★★★☆

Overview: Shanxi Huaxiang Group Co., Ltd. specializes in the research, development, production, and sale of customized metal parts both in China and internationally, with a market capitalization of CN¥5.75 billion.

Operations: Shanxi Huaxiang Group generates revenue through the sale of customized metal parts. The company's financial performance is reflected in its market capitalization of CN¥5.75 billion.

Shanxi Huaxiang Group, a player in the machinery sector, has shown impressive financial health and growth potential. Over the past year, earnings surged by 52.1%, outpacing the industry average of -0.4%. The company trades at a favorable price-to-earnings ratio of 12.8x compared to the broader CN market's 36.8x, indicating good relative value. Despite an increase in its debt-to-equity ratio from 19.6% to 46.4% over five years, its interest payments are well-covered with EBIT at an 11.9x coverage level and it holds more cash than total debt, suggesting sound financial management and stability for future endeavors.

• Take a closer look at Shanxi Huaxiang Group's potential here in our health report.

• Review our historical performance report to gain insights into Shanxi Huaxiang Group's's past performance.

Hollyland (China) Electronics Technology (SZSE:002729)

Simply Wall St Value Rating: ★★★★★☆

Overview: Hollyland (China) Electronics Technology Corporation Limited focuses on the research, development, production, and sale of circuit protection products both in China and internationally, with a market cap of CN¥2.76 billion.

Operations: Hollyland generates revenue primarily from its Circuit Protection Components segment, amounting to CN¥329.18 million.

Hollyland Electronics, a promising player in the tech sector, has shown impressive earnings growth of 31.7% over the past year, outpacing the electronic industry's average of 1.8%. The company's recent financials reveal sales reaching CNY 275.73 million for nine months ending September 2024, up from CNY 193.41 million a year ago, with net income climbing to CNY 34.1 million from CNY 17.44 million previously. Despite a slight increase in its debt-to-equity ratio from 3.4% to 3.5%, Hollyland remains financially sound with more cash than total debt and positive free cash flow indicators suggesting robust operational health.

• Click here and access our complete health analysis report to understand the dynamics of Hollyland (China) Electronics Technology.

• Understand Hollyland (China) Electronics Technology's track record by examining our Past report.

MTG (TSE:7806)

Simply Wall St Value Rating: ★★★★★★

Overview: MTG Co., Ltd. manufactures and sells health, beauty, and hygiene products in Japan and internationally with a market cap of ¥75.52 billion.

Operations: MTG Co., Ltd. generates its revenue primarily from the sale of health, beauty, and hygiene products in both domestic and international markets. The company's financial performance is influenced by its ability to manage production costs effectively while navigating market demand for its diverse product offerings.

MTG, a company operating without debt for five years, has shown impressive earnings growth of 45.6% over the past year, outpacing the Personal Products industry average of 4.6%. This growth trajectory is expected to continue with forecasts predicting a 12.02% annual increase in earnings. Trading at 15.1% below its estimated fair value, MTG seems to offer good value potential for investors. Recently, MTG completed a share buyback program repurchasing 750,000 shares for ¥1,204 million to enhance capital efficiency and respond flexibly to market changes—demonstrating proactive financial management amidst evolving business conditions.

• Delve into the full analysis health report here for a deeper understanding of MTG.

• Assess MTG's past performance with our detailed historical performance reports.

Taking Advantage

• Get an in-depth perspective on all 4648 Undiscovered Gems With Strong Fundamentals by using our screener here.
• Invested in any of these stocks? Simplify your portfolio management with Simply Wall St and stay ahead with our alerts for any critical updates on your stocks.
• Simply Wall St is a revolutionary app designed for long-term stock investors, it's free and covers every market in the world.

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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