As global markets react to central bank rate cuts and economic data surprises, the Hong Kong market has faced its own challenges with the Hang Seng Index experiencing a recent decline. Amidst this backdrop, growth companies with high insider ownership can offer unique insights into potential earnings momentum and strategic alignment. In this article, we explore three such stocks on the SEHK that insiders are backing, highlighting their potential for up to 53% earnings growth.
Top 10 Growth Companies With High Insider Ownership In Hong Kong
Overview: AAC Technologies Holdings Inc. is an investment holding company that offers solutions for smart devices across various regions including Mainland China, Hong Kong, Taiwan, other Asian countries, the United States, and Europe with a market cap of HK$40.03 billion.
Operations: The company's revenue primarily comes from its Electromagnetic Drives and Precision Mechanics segment at CN￥8.28 billion, followed by Acoustics Products at CN￥7.64 billion, Optics Products at CN￥4.07 billion, and Sensor and Semiconductor Products at CN￥920.28 million.
Insider Ownership: 36.7%
Earnings Growth Forecast: 21% p.a.
AAC Technologies Holdings shows strong growth potential with earnings rising by 81.3% over the past year and forecasted to grow at 21% annually, outpacing the Hong Kong market. The company's revenue for H1 2024 was CNY 11.25 billion, up from CNY 9.22 billion a year ago, reflecting solid performance. Despite no recent insider trading activity, its stock trades slightly below estimated fair value, indicating potential investment appeal for those seeking growth in Hong Kong's tech sector.
Overview: Bairong Inc. is a cloud-based AI turnkey services provider in China with a market cap of approximately HK$4.60 billion.
Operations: The company generates revenue from its data processing segment, amounting to CN￥2.76 billion.
Insider Ownership: 19.5%
Earnings Growth Forecast: 28.1% p.a.
Bairong Inc. demonstrates growth potential with projected earnings growth of 28.1% annually, surpassing the Hong Kong market's average. Despite a decline in net income to CNY 139.96 million for H1 2024, sales increased to CNY 1.32 billion from CNY 1.24 billion a year prior. The stock trades at a significant discount to fair value, suggesting possible investment appeal, though profit margins have decreased from last year and return on equity remains modestly forecasted at 10.3%.
Overview: Akeso, Inc. is a biopharmaceutical company that focuses on researching, developing, manufacturing, and commercializing antibody drugs with a market cap of HK$59.92 billion.
Operations: The company's revenue from the research, development, production, and sale of biopharmaceutical products amounts to CN￥1.87 billion.
Insider Ownership: 20.5%
Earnings Growth Forecast: 53.1% p.a.
Akeso is forecast to achieve profitability within three years, with revenue growth projected at 33.5% annually, significantly outpacing the Hong Kong market. Despite recent shareholder dilution, Akeso's stock trades below estimated fair value. The company announced promising clinical trial results for its cancer treatments, notably cadonilimab and ivonescimab, enhancing its commercialization potential. However, a follow-on equity offering of HK$1.94 billion suggests ongoing capital needs as it continues expanding its innovative drug portfolio.
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.The analysis only considers stock directly held by insiders. It does not include indirectly owned stock through other vehicles such as corporate and/or trust entities. All forecast revenue and earnings growth rates quoted are in terms of annualised (per annum) growth rates over 1-3 years.
Companies discussed in this article include SEHK:2018 SEHK:6608 and SEHK:9926.
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