Stock Analysis

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

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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

NamePEPSDiscount to Fair ValueValue Rating
Shenzhen International Holdings5.9x0.7x23.93%★★★★★★
Shanghai Chicmax Cosmetic17.4x2.2x0.24%★★★★★☆
IGG5.2x0.7x12.93%★★★★★☆
Lion Rock Group5.7x0.4x48.11%★★★★☆☆
K. Wah International Holdings11.6x1.3x30.33%★★★★☆☆
Giordano International9.2x0.7x26.99%★★★☆☆☆
Skyworth Group5.0x0.1x-154.72%★★★☆☆☆
Lee & Man Paper Manufacturing6.1x0.4x-24.08%★★★☆☆☆
CN Logistics International Holdings20.1x0.5x23.23%★★★☆☆☆
Comba Telecom Systems HoldingsNA0.6x36.79%★★★☆☆☆

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.

SEHK:173 Share price vs Value as at Sep 2024

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.

SEHK:2342 Share price vs Value as at Sep 2024

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.

SEHK:799 Share price vs Value as at Sep 2024

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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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