To The Moon

Forget the index juggernauts for a moment. In the ever-volatile world of Hong Kong equities, it’s often the lesser-known names that offer the most intriguing value—and I’ve found two. Tucked away from the market spotlight are Xin Point Holdings and Billion Industrial Holdings, two small-caps from vastly different sectors that are delivering results worth watching. Both have solid fundamentals, sector-specific catalysts, and just enough market neglect to make them compelling. If you’re after diversification with serious upside potential, it might be time to start digging where others aren’t looking.

Where the market doesn’t look, value quietly compels

Xin Point: A Spark in the Auto Parts Slow Lane

At first glance, betting on a company tied to auto components might seem like parking your money in reverse. The industry has suffered a decline of over 16% in the past year—but $XIN POINT HOLD(01571)$ clearly didn’t get the memo. With earnings up 27.4% and a 1-year return of 44.7%, it’s one of the few names in the space swimming against the current. It’s also incredibly cheap. The trailing P/E sits at just 6.1, while the stock trades at a price-to-book ratio of 0.99 and an enterprise value-to-EBITDA multiple of 2.92. In other words, investors are paying a bargain price for a business with healthy margins and cash flow to back it up.

Return on equity is a respectable 16.1%, and the operating margin of 19.1% suggests that management is extracting serious value from its production lines. The company is sitting on HK$780 million in cash and has kept total debt to a mere 3.5% of equity, which positions it well to navigate any bumps in the macroeconomic road. Dividend hunters might raise an eyebrow too: Xin Point offers a juicy forward yield of 13%, supported by a 74% payout ratio. That’s more generous than most high-yield REITs—and comes with the added benefit of capital upside.

But here’s what many investors may have missed: Xin Point’s product mix—focused on decorative components for EV interiors—positions it nicely for the electrification wave. These aren’t just metal parts; they’re electroplated aesthetic trims increasingly used in EV dashboards, centre consoles, and interiors. As the EV market shifts towards premiumisation and user experience, Xin Point becomes more of a design enabler than a basic parts supplier. It's a subtle but strategic edge.

Xin Point’s technicals reveal a quiet strength hiding in plain sight

Technicals tighten as momentum builds behind the scenes

Billion Industrial: A Luxury Underdog That’s Just Getting Started

If Xin Point plays in industrial elegance, $BILLION IND(02299)$ brings scale to style. This low-profile player in the luxury packaging sector is quietly transforming its balance sheet and income statement. Earnings jumped 180% over the past year, with net margins expanding from razor-thin to something far more substantial. Return on equity has climbed to over 7%, and the company has done the near-unthinkable for a former heavy borrower: reduced its debt-to-equity ratio from 28% to just over 7%.

Billion’s fundamentals are already catching up—will price action follow?

Early signs suggest this phoenix is preparing for flight

Despite its 20 billion yuan revenue base, the company trades at only 0.42 times sales and under 0.8 times book value—meaning the market is pricing it like a utility, not a luxury-facing supplier. Yet this is a business selling high-margin packaging solutions to premium brands, likely benefiting from China’s steady, if unremarkable, consumer recovery. While the Hang Seng is up 38% year-over-year, Billion Industrial has posted a relatively modest gain of 5.4%. That kind of underperformance, paired with surging fundamentals, smells like a mispricing to me.

One underrated angle: Billion’s customer concentration in high-end fragrance and cosmetics. These are segments where packaging is the product. With rising demand for bespoke presentation and sustainable materials, Billion is positioned not just as a cost supplier, but as a value-added branding partner. That’s a higher-margin proposition—and one that hasn’t yet been reflected in its trading multiples.

Two Small Caps, One Big Opportunity

Together, Xin Point and Billion Industrial offer a powerful one-two punch for anyone looking to diversify beyond the familiar names on the Hang Seng. Xin gives exposure to industrial production, EV adoption, and income yield—all in one neat, low-volatility package. Billion adds a discretionary growth kicker, tapping into China's middle-class resurgence and luxury rebound without the volatility of retail-facing names.

What I also find attractive is their small float and minimal institutional ownership—just 4.9% for Xin Point and essentially zero for Billion. Insider ownership is high in both cases, signalling strong alignment with shareholders. These aren’t momentum chasers or meme stocks. They’re old-fashioned businesses executing quietly while nobody’s watching.

One shared trait: underrated strength beneath the surface

Time to Get Ahead of the Curve

For all the glamour of Hong Kong’s blue chips and tech rebound stories, I’ve always believed that the real alpha hides where few care to look. $XIN POINT HOLD(01571)$ and $BILLION IND(02299)$ are exactly that—under-analysed, undervalued, and fundamentally improving. They won’t make headlines tomorrow, but they might make a portfolio shine over the next two years.

So yes, I’m turning to small-cap resilience. Because sometimes the biggest gains come from the quietest performers.

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