As global markets respond to the recent Fed rate cut, Chinese equities have shown resilience, with key indices such as the Shanghai Composite and CSI 300 posting gains. This positive momentum in China’s market presents a unique opportunity to explore lesser-known small-cap stocks that may offer significant growth potential. In this article, we will discuss Zhejiang Zhongxin Environmental Protection Technology Group and two other hidden small-cap treasures that exemplify strong fundamentals and promising prospects in today’s dynamic economic landscape.
Top 10 Undiscovered Gems With Strong Fundamentals In China
Name | Debt To Equity | Revenue Growth | Earnings Growth | Health Rating |
|---|---|---|---|---|
Shandong Link Science and TechnologyLtd | 2.65% | 15.68% | 10.94% | ★★★★★★ |
Beijing Foyou PharmaLTD | 1.91% | 1.16% | 18.67% | ★★★★★★ |
Jiangyin Haida Rubber And Plastic | 16.00% | 5.87% | -14.07% | ★★★★★★ |
Ningbo Sinyuan Zm Technology | NA | 15.67% | 9.90% | ★★★★★★ |
Hunan Hansen Pharmaceutical | 4.36% | 2.88% | 6.53% | ★★★★★★ |
Center International GroupLtd | 28.69% | 3.14% | -40.36% | ★★★★★★ |
Zhejiang Chinastars New Materials Group | 43.19% | -3.60% | 2.29% | ★★★★★☆ |
Shanghai YongLi Belting | 12.97% | -12.15% | 18.03% | ★★★★★☆ |
Haimo Technologies Group | 39.19% | 2.21% | 24.33% | ★★★★★☆ |
Huaiji Dengyun Auto-parts (Holding)Ltd | 67.58% | 11.72% | -34.21% | ★★★★☆☆ |
Let’s dive into some prime choices out of from the screener.
Simply Wall St Value Rating: ★★★★★☆
Overview: Zhejiang Zhongxin Environmental Protection Technology Group Co., Ltd. (SHSE:603091) specializes in environmental protection technology and services, with a market cap of CNÂ¥3.85 billion.
Operations: Zhejiang Zhongxin Environmental Protection Technology Group generates revenue primarily from its environmental protection technology and services. The company has a market cap of CNÂ¥3.85 billion.
Zhejiang Zhongxin Environmental Protection Technology Group recently completed an IPO raising Â¥677.33M, offering 25.56M shares at Â¥26.5 each. The company’s net debt to equity ratio is a satisfactory 7.3%, and its price-to-earnings ratio of 16.7x suggests good value compared to the CN market’s 27.5x average. Earnings grew by 21.5% over the past year, outpacing the packaging industry’s growth rate of 5.5%. Interest payments are well-covered by EBIT with a coverage ratio of 208x, indicating strong financial health and robust profitability.
Simply Wall St Value Rating: ★★★★★★
Overview: IntSig Information Co., Ltd. offers optical character recognition solutions to corporate clients and individuals worldwide, with a market cap of CNÂ¥11.36 billion.
Operations: IntSig Information Co., Ltd. generates revenue primarily from its optical character recognition solutions offered to both corporate clients and individuals. The company reported a gross profit margin of 58.25% in the most recent period, reflecting its cost efficiency in operations.
Intsig Information, a promising player in the software industry, recently completed an IPO raising CNY 1.38 billion. The company reported half-year sales of CNY 688.18 million and net income of CNY 220.75 million, showing solid growth from last year’s figures. With a price-to-earnings ratio of 31.8x, it is attractively valued compared to the industry average of 61.3x. Notably, Intsig has no debt and boasts high-quality earnings with a robust annual growth rate of 17.7%.
Simply Wall St Value Rating: ★★★★★★
Overview: Shenzhen Farben Information Technology Co., Ltd. (SZSE:300925) operates in the technology sector with a market cap of CNÂ¥7.28 billion.
Operations: Farben generates revenue through various segments, with the primary streams and cost breakdowns not specified. The company’s net profit margin stands at 15.32%.
Shenzhen Farben Information Technology Ltd. has demonstrated solid performance with a 4.9% earnings growth over the past year, outpacing the IT industry’s -11.5%. The company’s net income for the first half of 2024 was CNY 73.96 million, up from CNY 61.17 million a year ago, reflecting strong operational efficiency. Additionally, its debt to equity ratio improved significantly from 12.7% to 6.8% over five years, and it recently completed a share buyback worth CNY 27.19 million for approximately 3.60 million shares in early July.
Taking Advantage
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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.
Companies discussed in this article include SHSE:603091 SHSE:688615 and SZSE:300925.
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