Global markets have been buoyed by optimism surrounding potential interest rate cuts and advancements in artificial intelligence, with major indices like the Dow Jones, S&P 500, and Nasdaq reaching new record highs. In this context of heightened investor enthusiasm, penny stocks—often smaller or newer companies—remain a compelling area for exploration due to their unique potential for growth. Despite being an older term, penny stocks continue to represent opportunities for investors seeking hidden value in companies with strong financial foundations and promising prospects.
Below we spotlight a couple of our favorites from our exclusive screener.
Simply Wall St Financial Health Rating: ★★★★☆☆
Overview: XJ International Holdings Co., Ltd. is an investment holding company that provides higher education and secondary vocational education services in China and Malaysia, with a market capitalization of approximately HK$1.79 billion.
Operations: XJ International Holdings generates revenue from its Domestic Education segment, amounting to CN¥3.35 billion, and its Global Education segment, contributing CN¥494.83 million.
Market Cap: HK$1.79B
XJ International Holdings has demonstrated significant earnings growth, with a remarkable increase of over 10,000% in the past year, contrasting with its five-year average growth of 5.6% annually. Despite this impressive performance, the company’s short-term assets (CN¥2.6 billion) fall short of covering both its short-term (CN¥8.2 billion) and long-term liabilities (CN¥3 billion). The recent appointment of Ms. Wang Xiu and Mr. Zhang Jin to the Nomination and Remuneration Committee could signal strategic shifts following their withdrawn HKD 205 million equity offering, reflecting ongoing financial restructuring efforts amidst market volatility.
SEHK:1765 Debt to Equity History and Analysis as at Sep 2025
Simply Wall St Financial Health Rating: ★★★★★☆
Overview: Youzan Technology Limited is an investment holding company offering online and offline e-commerce solutions in China, Japan, and Canada, with a market cap of HK$5.07 billion.
Operations: The company’s revenue segments include Japan, contributing CN¥0.61 million, and a segment adjustment of CN¥1.47 billion.
Market Cap: HK$5.07B
Youzan Technology has shown a turnaround to profitability with net income reaching CN¥72.74 million for H1 2025, driven by increased revenue and operational efficiency. The company completed a share buyback, repurchasing 34.2 million shares for HK$3.19 million, indicating confidence in its valuation. Despite being unprofitable historically, Youzan’s short-term assets of CN¥4.7 billion comfortably cover both short- and long-term liabilities, and it maintains more cash than debt. With a seasoned board and management team, the company is positioned for potential growth as earnings are forecasted to rise significantly in the coming years.
SEHK:8083 Revenue & Expenses Breakdown as at Sep 2025
Simply Wall St Financial Health Rating: ★★★★★★
Overview: Yiwu Huading Nylon Co., Ltd. focuses on the research, development, manufacture, and sale of nylon filaments mainly in China, with a market cap of CN¥4.28 billion.
Operations: Yiwu Huading Nylon Co., Ltd. has not reported any specific revenue segments.
Market Cap: CN¥4.28B
Yiwu Huading Nylon Co., Ltd. has demonstrated financial resilience despite a decline in revenue and sales for the first half of 2025 compared to the previous year. The company maintains strong liquidity, with short-term assets of CN¥2.4 billion exceeding both its short- and long-term liabilities, and it holds more cash than total debt. Earnings growth has been robust, increasing by over 100% in the past year, surpassing industry averages. With a stable price-to-earnings ratio of 9.8x below market levels and no significant shareholder dilution recently, Yiwu Huading presents a compelling case for value-oriented investors seeking exposure to this segment.
SHSE:601113 Financial Position Analysis as at Sep 2025
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 SEHK:1765 SEHK:8083 and SHSE:601113.
This article was originally published by Simply Wall St.
