Discovering Synopex And 2 Other Promising South Korean Small Caps

The South Korea stock market recently ended a two-day winning streak, with the KOSPI index dropping 27.34 points to finish at 2,738.19 amid losses in the energy and industrial sectors. As global forecasts remain mixed and technology shares face pressure, small-cap stocks present unique opportunities for investors seeking growth potential in a volatile environment. In this context, discovering promising small-cap stocks like Synopex can be particularly rewarding due to their potential for significant upside despite broader market challenges.

Top 10 Undiscovered Gems With Strong Fundamentals In South Korea

Name	Debt To Equity	Revenue Growth	Earnings Growth	Health Rating
CYMECHS	10.99%	11.45%	3.52%	★★★★★★
Korea Ratings	NA	1.74%	0.87%	★★★★★★
Miwon Chemicals	0.16%	12.04%	14.03%	★★★★★★
NOROO PAINT & COATINGS	17.16%	5.11%	6.31%	★★★★★★
Woori Technology Investment	NA	22.60%	-1.67%	★★★★★★
BIO-FD&CLtd	2.01%	8.27%	22.82%	★★★★★★
SELVAS Healthcare	13.58%	10.16%	77.14%	★★★★★★
Daewon Cable	24.70%	8.50%	62.14%	★★★★★☆
Ubiquoss Holdings	2.69%	9.93%	14.22%	★★★★★☆
EASY BIOInc	188.46%	15.71%	55.75%	★★★★☆☆

Click here to see the full list of 209 stocks from our KRX Undiscovered Gems With Strong Fundamentals screener.

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

Synopex (KOSDAQ:A025320)

Simply Wall St Value Rating: ★★★★★★

Overview: Synopex Inc. manufactures and sells FPCB products and electronic components in South Korea and internationally, with a market cap of ₩959.94 billion.

Operations: Synopex generates revenue primarily from its FPCB Business Division, which accounts for ₩316.11 billion, and the Filter Business Division, contributing ₩36.25 billion.

Synopex has shown significant financial improvements, with earnings growth of 96% over the past year and a debt-to-equity ratio reduction from 88% to 19.9% in five years. The company is profitable and free cash flow positive, indicating robust financial health. Additionally, its EBIT covers interest payments 16.4 times over, suggesting strong operational efficiency. Despite a volatile share price recently, Synopex's revenue is projected to grow by nearly 29% annually, highlighting promising future prospects.

• Click to explore a detailed breakdown of our findings in Synopex's health report.

• Gain insights into Synopex's past trends and performance with our Past report.

Daewoong (KOSE:A003090)

Simply Wall St Value Rating: ★★★★★★

Overview: Daewoong Co., Ltd., together with its subsidiaries, engages in the manufacture and sale of pharmaceuticals in South Korea, with a market cap of ₩893.46 billion.

Operations: Daewoong primarily generates revenue from pharmaceutical manufacturing and sales, amounting to ₩1.98 trillion, with additional income from service provision (₩120.70 billion) and real estate rental (₩11.88 billion).

Daewoong's net debt to equity ratio stands at a satisfactory 14.4%, having improved from 39.7% over the past five years. Despite earnings growth of 15.1% last year, it lagged behind the Pharmaceuticals industry average of 18.9%. The company's interest payments are well covered by EBIT with a coverage ratio of 43.4x, and it trades at an attractive valuation, being priced at 78.5% below its estimated fair value.

• Take a closer look at Daewoong's potential here in our health report.

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

Dongwon Systems (KOSE:A014820)

Simply Wall St Value Rating: ★★★★★☆

Overview: Dongwon Systems Corporation is a packaging company that manufactures and markets packaging materials in South Korea, with a market cap of ₩1.27 trillion.

Operations: Revenue from Dongwon Systems' packaging business stands at ₩1.26 billion.

Dongwon Systems, a notable player in South Korea's packaging industry, reported Q1 2024 earnings with net income of KRW 15.48 million, up from KRW 12.89 million the previous year. Basic earnings per share rose to KRW 529 from KRW 441. Despite having high debt levels and a net debt to equity ratio of 49%, the company's interest payments are well covered by EBIT at a ratio of 4.9x. Earnings are projected to grow annually by approximately 15%.

• Get an in-depth perspective on Dongwon Systems' performance by reading our health report here.

• Understand Dongwon Systems' track record by examining our Past report.

Taking Advantage

• Unlock more gems! Our KRX Undiscovered Gems With Strong Fundamentals screener has unearthed 206 more companies for you to explore.Click here to unveil our expertly curated list of 209 KRX Undiscovered Gems With Strong Fundamentals.
• Are any of these part of your asset mix? Tap into the analytical power of Simply Wall St's portfolio to get a 360-degree view on how they're shaping up.
• Maximize your investment potential with Simply Wall St, the comprehensive app that offers global market insights for free.

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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