Three Undiscovered Gems In Hong Kong Backed By Strong Fundamentals

As global markets react to China's robust stimulus measures, the Hang Seng Index in Hong Kong has surged by 13%, reflecting renewed investor confidence. Amid this optimistic backdrop, identifying stocks with strong fundamentals becomes crucial for capitalizing on market opportunities. In this article, we explore three undiscovered gems in Hong Kong that are backed by solid financial health and growth potential.

Top 10 Undiscovered Gems With Strong Fundamentals In Hong Kong

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
Lion Rock Group	16.91%	14.33%	10.15%	★★★★★★
Changjiu Holdings	NA	11.84%	2.46%	★★★★★★
Sundart Holdings	0.92%	-2.32%	-3.94%	★★★★★★
China Leon Inspection Holding	8.55%	21.36%	22.77%	★★★★★★
Tianyun International Holdings	10.09%	-5.59%	-9.92%	★★★★★★
S.A.S. Dragon Holdings	60.96%	4.62%	10.02%	★★★★★☆
Lvji Technology Holdings	3.06%	4.56%	-1.87%	★★★★★☆
Billion Industrial Holdings	3.63%	18.00%	-11.38%	★★★★★☆
Time Interconnect Technology	151.14%	24.74%	19.78%	★★★★☆☆
Chongqing Machinery & Electric	27.77%	8.82%	11.12%	★★★★☆☆

Click here to see the full list of 167 stocks from our SEHK Undiscovered Gems With Strong Fundamentals screener.

Here's a peek at a few of the choices from the screener.

Poly Property Group (SEHK:119)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Poly Property Group Co., Limited is an investment holding company involved in property investment, development, and management across Hong Kong, the People's Republic of China, and internationally with a market cap of HK$6.80 billion.

Operations: Poly Property Group generates revenue primarily from property development (CN¥35.59 billion) and property investment and management (CN¥1.87 billion), with additional income from hotel operations (CN¥377.21 million).

Poly Property Group, a lesser-known player in Hong Kong's real estate market, saw its earnings grow by 531% over the past year, outpacing the industry's -11%. The company reported a net income of RMB 373.23 million for H1 2024, down from RMB 639.21 million last year. Recent sales figures show contracted sales value reaching RMB 36.8 billion as of August 2024 with an average selling price of approximately RMB 25,628 per sq.m., highlighting robust operational performance despite market challenges.

• Click here and access our complete health analysis report to understand the dynamics of Poly Property Group.

• Gain insights into Poly Property Group's past trends and performance with our Past report.

Guoquan Food (Shanghai) (SEHK:2517)

Simply Wall St Value Rating: ★★★★★☆

Overview: Guoquan Food (Shanghai) Co., Ltd. operates as a home meal products company in China with a market cap of HK$10.47 billion.

Operations: The company generates revenue primarily from retail sales through grocery stores, amounting to CN¥5.998 billion.

Guoquan Food (Shanghai) reported half-year sales of CNY 2.67 billion, down from CNY 2.76 billion a year ago, with net income dropping to CNY 85.98 million from CNY 107.7 million. Basic earnings per share fell to CNY 0.0313 compared to last year's CNY 0.0403, reflecting a challenging period for the company. Despite these setbacks, Guoquan remains profitable and has more cash than total debt, indicating financial stability amidst volatility in its share price over the past three months.

• Navigate through the intricacies of Guoquan Food (Shanghai) with our comprehensive health report here.

• Assess Guoquan Food (Shanghai)'s past performance with our detailed historical performance reports.

Shanghai Industrial Holdings (SEHK:363)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Shanghai Industrial Holdings Limited, with a market cap of HK$13.18 billion, operates in infrastructure and environmental protection, real estate, consumer products, and comprehensive healthcare businesses across Hong Kong, China, the rest of Asia, and internationally.

Operations: Shanghai Industrial Holdings Limited generates revenue from three primary segments: Real Estate (HK$17.26 billion), Infrastructure and Environmental Protection (HK$9.42 billion), and Consumer Products (HK$3.59 billion).

Shanghai Industrial Holdings has shown robust earnings growth of 25.6% over the past year, significantly outpacing the Industrials sector's 4.1%. The company’s price-to-earnings ratio stands at 4.1x, considerably lower than the Hong Kong market average of 9.5x, indicating potential undervaluation. Despite a high net debt to equity ratio of 43.3%, interest payments are well covered by EBIT at a coverage ratio of 6.3x. Recently, they declared an interim dividend of HK$0.42 per share for H1 2024 and reported net income of HK$1,200 million for the same period compared to HK$1,376 million last year.

• Take a closer look at Shanghai Industrial Holdings' potential here in our health report.

• Review our historical performance report to gain insights into Shanghai Industrial Holdings''s past performance.

Where To Now?

• Reveal the 167 hidden gems among our SEHK Undiscovered Gems With Strong Fundamentals screener with a single click here.
• Are these companies part of your investment strategy? Use Simply Wall St to consolidate your holdings into a portfolio and gain insights with our comprehensive analysis tools.
• Simply Wall St is a revolutionary app designed for long-term stock investors, it's free and covers every market in the world.

Ready To Venture Into Other Investment Styles?

• 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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