The Hong Kong market has recently experienced a downturn, with the Hang Seng Index retreating by 2.28% amid broader concerns about China's economic outlook and policy measures. Despite these challenges, opportunities remain for discerning investors, particularly in growth companies with high insider ownership. In this article, we will explore three such companies listed on the SEHK that exhibit strong growth potential and significant insider ownership—a combination that can often signal confidence in long-term prospects despite current market volatility.
Top 10 Growth Companies With High Insider Ownership In Hong Kong
Overview: Meitu, Inc. is an investment holding company that develops products for image, video, and design production to enhance industry digitalization with beauty-related solutions in China and internationally, with a market cap of HK$11.47 billion.
Operations: The company's revenue segments include an Internet Business generating CN￥2.70 billion.
Insider Ownership: 36.6%
Earnings Growth Forecast: 26.4% p.a.
Meitu, Inc. is trading significantly below its estimated fair value and has seen substantial insider buying over the past three months. The company expects annual profit growth of 26.4% and revenue growth of 17.8%, both outpacing the Hong Kong market averages. Recent earnings guidance suggests a net profit increase of at least 30% for H1 2024 compared to last year, highlighting strong financial performance despite some high-quality earnings impacted by one-off items.
Overview: Alibaba Health Information Technology Limited operates in pharmaceutical direct sales, pharmaceutical e-commerce platforms, and healthcare and digital services in Mainland China and Hong Kong, with a market cap of HK$53.23 billion.
Operations: The company generates CN￥27.03 billion from the distribution and development of its pharmaceutical and healthcare business.
Insider Ownership: 24.2%
Earnings Growth Forecast: 23.7% p.a.
Alibaba Health Information Technology reported strong financial performance, with net income rising to CNY 883.48 million for the year ended March 31, 2024. Earnings are forecast to grow at 23.72% per year, outpacing the Hong Kong market average of 11.3%. Despite trading at a significant discount to its estimated fair value and having more insider buying than selling recently, shareholders experienced dilution over the past year. Revenue growth is projected at a slower rate of 10.9% annually.
Overview: Techtronic Industries Company Limited designs, manufactures, and markets power tools, outdoor power equipment, and floorcare and cleaning products across North America, Europe, and internationally with a market cap of HK$183.43 billion.
Operations: The company's revenue segments include $12.79 billion from Power Equipment and $974.75 million from Floorcare & Cleaning products.
Insider Ownership: 25.4%
Earnings Growth Forecast: 14.9% p.a.
Techtronic Industries is experiencing steady growth, with earnings forecasted to increase by 14.93% annually, outpacing the Hong Kong market's average of 11.3%. Recent insider transactions show more buying than selling, indicating confidence in the company's future. The recent CEO transition and share buyback program aimed at enhancing net asset value per share are significant developments. Despite slower revenue growth projections (8.1% annually), Techtronic remains a solid performer with high insider ownership and robust return on equity forecasts (20.4%).
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:1357 SEHK:241 and SEHK:669.
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