Undiscovered Gems In Hong Kong Three Small Caps With Strong Potential

With China's recent stimulus measures providing a boost to the Hong Kong market, small-cap stocks are poised to benefit from renewed investor interest and economic optimism. In this favorable environment, identifying stocks with strong fundamentals and growth potential becomes crucial for capitalizing on emerging opportunities.

Top 10 Undiscovered Gems With Strong Fundamentals In Hong Kong

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
E-Commodities Holdings	21.33%	9.04%	28.46%	★★★★★★
C&D Property Management Group	1.32%	37.15%	41.55%	★★★★★★
COSCO SHIPPING International (Hong Kong)	NA	-3.84%	16.33%	★★★★★★
ManpowerGroup Greater China	NA	14.56%	1.58%	★★★★★★
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%	★★★★★★
Xin Point Holdings	1.77%	10.88%	22.83%	★★★★★☆
Pizu Group Holdings	48.34%	-4.53%	-19.78%	★★★★☆☆

Click here to see the full list of 169 stocks from our SEHK Undiscovered Gems With Strong Fundamentals screener.

Here we highlight a subset of our preferred stocks 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$6.23 billion.

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

Poly Property Group has shown significant earnings growth of 531% over the past year, outpacing the Real Estate industry’s -11%. Despite this, net income for the first half of 2024 was CNY 373.23 million, down from CNY 639.21 million a year ago. The company reported contracted sales value of RMB 36.8 billion as of August 2024, with an average selling price of approximately RMB 25,628 per sq.m. However, debt remains high with a net debt to equity ratio at 91.1%.

• Get an in-depth perspective on Poly Property Group's performance by reading our health report here.

• Assess Poly Property Group's past performance with our detailed historical performance reports.

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$8.13 billion.

Operations: Guoquan Food (Shanghai) Co., Ltd. generates revenue primarily from retail sales in grocery stores, amounting to CN¥5.998 billion. The company's financial performance is influenced by its cost structure and profit margins, with a notable focus on the net profit margin trend over recent periods.

Guoquan Food (Shanghai) recently reported half-year sales of CNY 2.67 billion, down from CNY 2.76 billion last year, with net income at CNY 85.98 million compared to CNY 107.7 million previously. Basic earnings per share fell to CNY 0.0313 from CNY 0.0403 a year ago, reflecting some challenges in the market environment. Despite these figures, the company trades at a significant discount of around 61% below its estimated fair value and has high-quality past earnings and positive free cash flow.

• Take a closer look at Guoquan Food (Shanghai)'s potential here in our health report.

• Gain insights into Guoquan Food (Shanghai)'s historical performance by reviewing our past performance report.

Shanghai Industrial Holdings (SEHK:363)

Simply Wall St Value Rating: ★★★★☆☆

Overview: Shanghai Industrial Holdings Limited, with a market cap of HK$12.72 billion, operates in infrastructure and environmental protection, real estate, consumer products, and comprehensive healthcare across Hong Kong, China, the rest of Asia, and internationally.

Operations: Shanghai Industrial Holdings generates revenue primarily from real estate (HK$17.26 billion), infrastructure and environmental protection (HK$9.42 billion), and consumer products (HK$3.59 billion).

Shanghai Industrial Holdings, a notable player in Hong Kong's market, reported earnings growth of 25.6% over the past year, outpacing the Industrials industry average of 4.1%. The company has a high net debt to equity ratio at 43.3%, though its interest payments are well covered by EBIT at 6.3x coverage. Recently, it announced interim results with sales of HK$10.37 billion and net income of HK$1.20 billion for H1 2024, reflecting solid performance despite challenging conditions.

• Click to explore a detailed breakdown of our findings in Shanghai Industrial Holdings' health report.

• Examine Shanghai Industrial Holdings' past performance report to understand how it has performed in the past.

Make It Happen

• Unlock more gems! Our SEHK Undiscovered Gems With Strong Fundamentals screener has unearthed 166 more companies for you to explore.Click here to unveil our expertly curated list of 169 SEHK Undiscovered Gems With Strong Fundamentals.
• 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.

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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