Undiscovered Gems in Hong Kong Stocks To Watch This August 2024

As global markets navigate a period of economic uncertainty, the Hong Kong market has shown resilience despite broader concerns. With the Hang Seng Index experiencing modest declines, investors are increasingly looking toward small-cap stocks that may offer hidden value and growth potential. In this environment, identifying promising stocks involves focusing on companies with strong fundamentals and unique market positions. Here are three undiscovered gems in Hong Kong to watch this August 2024.

Top 10 Undiscovered Gems With Strong Fundamentals In Hong Kong

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
E-Commodities Holdings	23.22%	6.87%	31.81%	★★★★★★
S.A.S. Dragon Holdings	37.35%	4.13%	12.06%	★★★★★★
PW Medtech Group	NA	17.93%	-2.70%	★★★★★★
Tianyun International Holdings	10.09%	-5.59%	-9.92%	★★★★★★
JiaXing Gas Group	17.72%	26.04%	22.07%	★★★★★☆
Xin Point Holdings	2.03%	9.80%	15.04%	★★★★★☆
Changjiu Holdings	14.09%	12.87%	-4.74%	★★★★★☆
Mulsanne Group Holding	186.88%	-12.02%	-43.54%	★★★★☆☆
Time Interconnect Technology	212.50%	27.21%	15.01%	★★★★☆☆
Pizu Group Holdings	48.34%	-4.53%	-19.78%	★★★★☆☆

Click here to see the full list of 174 stocks from our SEHK Undiscovered Gems With Strong Fundamentals screener.

Underneath we present a selection of stocks filtered out by our screen.

Kinetic Development Group (SEHK:1277)

Simply Wall St Value Rating: ★★★★★☆

Overview: Kinetic Development Group Limited (SEHK:1277) is an investment holding company involved in the extraction and sale of coal products in the People’s Republic of China, with a market cap of HK$9.53 billion.

Operations: Kinetic Development Group Limited generates revenue primarily through the extraction and sale of coal products in the People’s Republic of China. The company has a market cap of HK$9.53 billion.

Kinetic Development Group, trading 25.7% below its estimated fair value, has seen a net debt to equity ratio drop from 26.6% to 17.6% over five years. Despite a negative earnings growth of -22%, the company remains profitable with well-covered interest payments (55.7x EBIT coverage). Recent amendments to its memorandum and articles of association were approved at the May AGM, alongside a final dividend declaration of HKD 0.05 per share for FY2023.

• Click here to discover the nuances of Kinetic Development Group with our detailed analytical health report.

• Examine Kinetic Development Group's past performance report to understand how it has performed in the past.

Scholar Education Group (SEHK:1769)

Simply Wall St Value Rating: ★★★★★★

Overview: Scholar Education Group, an investment holding company, provides K-12 after-school education services in the People’s Republic of China with a market cap of HK$2.76 billion.

Operations: Revenue for Scholar Education Group primarily comes from private education services, amounting to CN¥570.61 million.

Scholar Education Group, a notable player in Hong Kong's education sector, has shown impressive earnings growth of 58% over the past year. The company is debt-free now, a significant improvement from five years ago when its debt to equity ratio was 37.1%. Revenue is projected to grow by 35.23% annually, although earnings have seen an annual decline of 8.5% over the last five years. Trading at 73.1% below estimated fair value suggests potential upside for investors seeking undervalued stocks in this space.

• Unlock comprehensive insights into our analysis of Scholar Education Group stock in this health report.

• Evaluate Scholar Education Group's historical performance by accessing our past performance 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$9.15 billion.

Operations: The company's primary revenue stream is from retail sales through grocery stores, amounting to CN¥6.09 billion.

Guoquan Food (Shanghai) has demonstrated solid financial health, with earnings growth of 4.2% over the past year, surpassing the Consumer Retailing industry average of 1.6%. The company recently approved a final cash dividend of RMB 0.0521 per share for 2023, indicating shareholder value focus. Levered free cash flow turned positive in recent years, reaching RMB 543 million as of August 2024, suggesting improved operational efficiency and financial management.

• Click to explore a detailed breakdown of our findings in Guoquan Food (Shanghai)'s health report.

• Understand Guoquan Food (Shanghai)'s track record by examining our Past report.

Where To Now?

• Discover the full array of 174 SEHK Undiscovered Gems With Strong Fundamentals right 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.
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Ready For A Different Approach?

• 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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