Top Undervalued Small Caps With Insider Action In Hong Kong For September 2024

As global markets grapple with economic uncertainties, the Hong Kong market has seen its share of volatility, with the Hang Seng Index recently declining by 3.03%. Amid this backdrop, small-cap stocks often present unique opportunities for investors willing to navigate their inherent risks. In such a fluctuating environment, identifying undervalued small-cap stocks with insider action can be particularly compelling.

Top 10 Undervalued Small Caps With Insider Buying In Hong Kong

Name	PE	PS	Discount to Fair Value	Value Rating
Shenzhen International Holdings	5.9x	0.7x	23.93%	★★★★★★
Shanghai Chicmax Cosmetic	17.4x	2.2x	0.24%	★★★★★☆
IGG	5.2x	0.7x	12.93%	★★★★★☆
Lion Rock Group	5.7x	0.4x	48.11%	★★★★☆☆
K. Wah International Holdings	11.6x	1.3x	30.33%	★★★★☆☆
Giordano International	9.2x	0.7x	26.99%	★★★☆☆☆
Skyworth Group	5.0x	0.1x	-154.72%	★★★☆☆☆
Lee & Man Paper Manufacturing	6.1x	0.4x	-24.08%	★★★☆☆☆
CN Logistics International Holdings	20.1x	0.5x	23.23%	★★★☆☆☆
Comba Telecom Systems Holdings	NA	0.6x	36.79%	★★★☆☆☆

Click here to see the full list of 14 stocks from our Undervalued SEHK Small Caps With Insider Buying screener.

We'll examine a selection from our screener results.

K. Wah International Holdings (SEHK:173)

Simply Wall St Value Rating: ★★★★☆☆

Overview: K. Wah International Holdings focuses on property development and investment in Hong Kong and Mainland China, with a market cap of approximately HK$9.25 billion.

Operations: The company generates revenue primarily from property development in Mainland China and Hong Kong, along with property investment. For the period ending September 30, 2023, it reported a gross profit margin of 32.25%.

PE: 11.6x

K. Wah International Holdings, a small cap in Hong Kong, has seen insider confidence with share purchases over the past year. Recently, they reported a significant drop in sales to HK$1.21 billion for the first half of 2024 from HK$3.10 billion last year, and net income fell to HK$153.79 million from HK$481.91 million. Despite this, earnings are forecasted to grow by 43% annually, suggesting potential for future value growth amidst current undervaluation concerns.

• Get an in-depth perspective on K. Wah International Holdings' performance by reading our valuation report here.

• Learn about K. Wah International Holdings' historical performance.

Comba Telecom Systems Holdings (SEHK:2342)

Simply Wall St Value Rating: ★★★☆☆☆

Overview: Comba Telecom Systems Holdings specializes in providing wireless telecommunications network system equipment and services, as well as operator telecommunication services, with a market cap of HK$1.78 billion.

Operations: The company primarily generates revenue from Wireless Telecommunications Network System Equipment and Services, with a smaller contribution from Operator Telecommunication Services. For the period ending 2023-06-30, it reported a gross profit margin of 28.63% on revenue of HK$6.55 billion.

PE: -11.9x

Comba Telecom Systems Holdings, a small-cap telecom firm in Hong Kong, has seen earnings decline by 1.7% annually over the past five years. The company's funding is entirely reliant on external borrowing, adding financial risk. Recently, they decided not to declare an interim dividend for H1 2024 due to expected losses of up to HK$160 million, driven by delayed network projects and lower income from equity investments. Notably, insider confidence was evident with significant share purchases in June 2024.

• Navigate through the intricacies of Comba Telecom Systems Holdings with our comprehensive valuation report here.

• Evaluate Comba Telecom Systems Holdings' historical performance by accessing our past performance report.

IGG (SEHK:799)

Simply Wall St Value Rating: ★★★★★☆

Overview: IGG is a company focused on the development and operation of online games with a market cap of approximately HK$8.50 billion.

Operations: The company's primary revenue stream is from the development and operation of online games, with a gross profit margin reaching 77.58% in the latest period. Operating expenses include significant allocations to sales and marketing, research and development, and general administrative costs.

PE: 5.2x

IGG reported a significant turnaround in H1 2024, with net income of HK$330.95 million compared to a net loss of HK$359.8 million the previous year. Sales increased to HK$2.74 billion from HK$2.50 billion, reflecting strong operational performance. Insider confidence is evident as key figures made substantial share purchases between March and June 2024, signaling belief in future growth prospects. An interim dividend of HK$0.085 per share will be paid on September 27, 2024.

• Dive into the specifics of IGG here with our thorough valuation report.

• Understand IGG's track record by examining our Past report.

Seize The Opportunity

• Dive into all 14 of the Undervalued SEHK Small Caps With Insider Buying we have identified here.
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Contemplating Other Strategies?

• 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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