Undervalued Asian Penny Stocks with High Growth Catalysts in October 2025

The geopolitical and economic landscape in Asia has become a fertile ground for identifying undervalued penny stocks poised to capitalize on shifting trade dynamics, supply chain realignments, and regional policy shifts. As U.S.-China tensions escalate and China deepens its economic integration with Southeast Asia, certain small-cap companies are uniquely positioned to benefit from these tailwinds. Below, we analyze three Asian penny stocks-Dawnrays Pharmaceutical (SEHK:2348), China ITS Holdings (SEHK:1900), and Sing Investments & Finance (SGX:S35)-and their alignment with these transformative forces.

1. Dawnrays Pharmaceutical: Navigating U.S. Tariffs and the Southeast Asia Pivot

Dawnrays Pharmaceutical, a Hong Kong-listed firm specializing in non-patented medicines, operates in a sector directly impacted by the Trump administration's 2025 pharmaceutical tariffs, which imposed rates as high as 245% on Chinese imports, according to a PharmaSource guide. While these tariffs initially pressured Asian drugmakers, they also accelerated a strategic shift: Chinese pharmaceutical companies are now pivoting to Southeast Asia, where China is the largest supplier of active pharmaceutical ingredients (APIs) to countries like Indonesia and Thailand, as noted in a Carnegie report.

Dawnrays, with its vertically integrated production and focus on cardiovascular and anti-hypertensive drugs, is well-positioned to leverage this trend. Its geographic concentration in Mainland China (nearly all sales are domestic) means it can pivot to supply regional partners in Southeast Asia, where demand for affordable biopharmaceuticals is surging, per a Mordor Intelligence report. Additionally, China's public health collaborations-such as vaccine production partnerships with Indonesia-create indirect growth opportunities for firms like Dawnrays, which can supply intermediates or bulk medicines to these projects, according to the Carnegie report.

However, the company's resilience is not without risks. The U.S. Biosecure Act and Trump's reshoring incentives (e.g., Pfizer's $70 billion R&D investment) could further erode export opportunities. Yet, Dawnrays' strong liquidity and reduced debt-to-equity ratio, noted in the PharmaSource guide, suggest it has the flexibility to adapt, whether through joint ventures or regional expansion.

2. China ITS Holdings: Capitalizing on Southeast Asia's Supply Chain Reconfiguration

China ITS Holdings (SEHK:1900) has emerged as a standout in October 2025, with 865.9% earnings growth year-on-year and a net profit margin of 41.7%, according to Simply Wall St. Its success is tied to China's strategic repositioning of Southeast Asia as a global distribution hub amid U.S. tariff pressures. For instance, China's exports to ASEAN surged 14.7% year-on-year in the first eight months of 2025, while exports to the U.S. fell 15.5%, as reported in The Diplomat.

China ITS, which operates in logistics and infrastructure, benefits from this shift. As Chinese automakers like BYD establish assembly lines in Thailand and Indonesia to meet U.S.-ASEAN "rules of origin" requirements (reported in The Diplomat), the company's expertise in supply chain management becomes critical. Its robust balance sheet-short-term assets exceed liabilities, per Simply Wall St-enables it to finance or facilitate these regional production networks.

The U.S. escalation of tariffs on Southeast Asian exports (e.g., Vietnam's 20% tariff rate in exchange for supply chain transparency measures, per The Diplomat) further underscores the need for firms like China ITS to navigate complex trade agreements. While this introduces regulatory risks, it also creates a niche for companies with deep regional expertise to act as intermediaries, ensuring compliance and optimizing costs.

Historical backtesting of China ITS Holdings' performance following earnings beats reveals two key events (FY-2022 and FY-2023) where the stock outperformed a flat benchmark by ~10.7% over a 30-day post-event window, according to Simply Wall St. While the small sample size limits statistical significance, the improving win rate over longer holding periods suggests that a buy-and-hold strategy could capture sustained value from the company's operational momentum and regional supply chain expertise.

3. Sing Investments & Finance: Benefiting from Singapore's Monetary Easing and Regional FDI Surge

Sing Investments & Finance (SGX:S35), a Singapore-based diversified financial services firm, is another candidate with strong growth catalysts. Singapore's Monetary Authority (MAS) has maintained a steady policy band in October 2025, signaling readiness to ease further if economic headwinds intensify, according to MUFG Research. This environment, coupled with Singapore's role as a regional financial hub, positions Sing Investments to capitalize on inflows from Southeast Asia's resilient foreign direct investment (FDI) market.

Southeast Asia's FDI inflows averaged $220 billion annually between 2021 and 2023, according to UNCTAD, driven by its young population and expanding middle class. Sing Investments, with its focus on regional operations, can benefit from this trend through increased lending to SMEs and infrastructure projects. Additionally, Singapore's monetary easing-such as rate cuts in early 2025-lowers borrowing costs, enhancing the firm's profitability in asset management and credit services, per MUFG Research.

However, the company's low return on equity, noted by Simply Wall St, suggests operational inefficiencies. Its growth will depend on its ability to leverage Singapore's policy support while navigating U.S. tariff-related uncertainties, particularly in sectors like pharmaceuticals, which account for 11% of Singapore's non-oil exports, as MUFG Research highlights.

Geopolitical and Economic Tailwinds: A Double-Edged Sword

While these stocks are positioned to benefit from regional dynamics, investors must remain cautious. The U.S. Biopharma Coalition and Biosecure Act aim to limit Chinese integration into global supply chains, according to the Carnegie report, while Southeast Asian nations are caught in a balancing act between U.S. market access and China's economic influence, as reported in The Diplomat. For example, Vietnam's supply chain transparency deal with the U.S. risks long-term friction with China, The Diplomat observes.

Nevertheless, the interplay of these forces creates opportunities for nimble players. Dawnrays and China ITS can pivot to Southeast Asia's growing demand, while Sing Investments can leverage Singapore's policy flexibility. The key is to monitor how these companies adapt their strategies to shifting trade rules and geopolitical pressures.

Conclusion

The October 2025 landscape for Asian penny stocks is defined by volatility and opportunity. Dawnrays Pharmaceutical, China ITS Holdings, and Sing Investments & Finance each offer unique exposure to the region's geopolitical and economic shifts. While risks abound-ranging from U.S. tariffs to regulatory uncertainties-their strategic alignment with Southeast Asia's growth trajectory and China's regional pivot makes them compelling candidates for investors willing to navigate the complexities of emerging markets.