Undervalued Asian Small Caps with Insider Buying: A Contrarian Play for 2025

The Asian small-cap space has long been a fertile ground for contrarian investors, where macroeconomic headwinds and underfollowed markets often mask compelling opportunities. Today, three companies—Shougang Fushan Resources Group Limited (SEHK:639), China Lesso Group Holdings (SEHK:2128), and Bloomberry Resorts (PSE:BLOOM)—stand out as prime examples of undervalued stocks with insider buying activity, signaling potential asymmetric returns. These companies exhibit strong fundamentals, P/E discounts, and recent executive share purchases that suggest confidence in their growth trajectories. Let's explore why these names deserve attention.

Why Insider Buying Matters in Underfollowed Markets

In regions like Asia, where institutional coverage is thin and sentiment-driven trading is common, insider buying acts as a contrarian beacon. Executives and board members are privy to operational details and strategic shifts that outsiders may miss. Their willingness to buy shares at depressed prices often precedes market recognition of undervaluation or upcoming catalysts.

This is particularly true in small-cap markets, where macro fears—such as China's slowing growth or Southeast Asia's debt concerns—can overshadow company-specific strengths. The three companies profiled here exemplify this dynamic, combining insider confidence with sector-specific tailwinds.

1. Shougang Fushan Resources Group: A Mining Play with Executive Backing

Key Metrics:
- P/E Ratio: 11.2x (vs. industry average of 14.5x)
- Dividend Yield: 11.2%
- Fair Value Discount: 50% below estimates

Shougang Fushan, a leading iron ore and steel producer, has seen significant insider buying in early 2025. Chen Zhaoqiang (Executive Director) and Wang Dongming (Executive Director) collectively purchased over 375,000 shares in April 2025 at prices between HK$0.29–0.31, signaling confidence in the stock's valuation. These purchases occurred amid mixed earnings (revenue below expectations but EPS in line with forecasts), suggesting insiders believe the market is undervaluing the company's long-term assets.

Growth Catalyst:
The company's dividend yield of 11.2% and plans to expand its mining operations in Southeast Asia position it to benefit from a potential rebound in global steel demand. The stock's technical sentiment also shows a “Strong Buy” signal, with a 1-month price change of +8.94%.

Investment Takeaway:
While risks like declining earnings forecasts (1.9% annual decline over three years) exist, the dividend yield and insider buying create a compelling risk/reward profile. Investors should consider a position here for exposure to a beaten-down sector with contrarian support.

2. China Lesso Group: Building Materials with Energy Storage Ambitions

Key Metrics:
- P/E Ratio: 7.0x (vs. industry average of 12.0x)
- Forecasted EPS Growth: 12.29% annually
- Insider Buying: HK$26 million over 12 months, led by Founder Luen Wong

China Lesso, a construction materials giant, has seen its shares drop due to a sales decline to CNY 27 billion in 2024. Yet insiders like Luen Wong (Founder & Chairman) have been aggressive buyers, purchasing HK$11 million worth of shares in early 2025. This activity aligns with strategic moves to pivot into new energy storage markets, led by newly appointed executive director Huang Zhanxiong.

Growth Catalyst:
The company's push into energy storage—a sector poised for explosive growth in Asia—could unlock new revenue streams. Its proposed dividend increase to HK$0.21 per share also signals financial stability amid restructuring.

Investment Takeaway:
At 7.0x P/E, China Lesso trades at a deep discount to its peers. While execution risks exist, the insider buying and strategic shift to energy storage suggest a turnaround is underway. This is a stock to accumulate on dips.

3. Bloomberry Resorts: Betting on Philippine Gaming's Digital Future

Key Metrics:
- P/E Ratio: 40.4x (vs. industry average of 32.0x)
- Debt/Equity: 165.7% (high but manageable)
- Insider Activity: Net buyers over the past three months

Bloomberry Resorts, operator of the Solaire Resort & Casino, has faced headwinds from the Philippine government's crackdown on offshore gaming. However, insiders have been net buyers in recent quarters, with executives like Cyrus Sherafat (Head of Gaming) acquiring millions of shares in 2024–2025. While specific June transactions are not detailed, the trend of buying over selling persists.

Growth Catalyst:
The launch of a new electronic gaming platform in early 2025 and expansion of Solaire North aim to offset declining traditional gaming revenue. With the Philippine economy projected to grow at 6–8% annually through 2028, Bloomberry stands to benefit from domestic tourism and tech-driven gaming.

Investment Takeaway:
Despite high debt, Bloomberry's insider buying and strategic pivots to digital gaming make it a speculative contrarian play. Investors should focus on a long-term horizon and monitor execution of its new initiatives.

The Contrarian Case for Asian Small Caps

These three companies exemplify how insider buying can be a leading indicator of undervaluation in overlooked markets. Their low P/E ratios, dividend yields, and strategic pivots suggest they're positioned to outperform as macro fears subside.

Key Risks to Monitor:
- Shougang Fushan: Shareholder dilution from potential new equity issuances.
- China Lesso: Execution of energy storage projects and margin pressures.
- Bloomberry Resorts: Debt management and regulatory risks in gaming.

Investment Strategy:
- Shougang Fushan: Buy on dips below HK$0.30 with a 12-month target of HK$0.50.
- China Lesso: Accumulate below HK$5.00, targeting HK$7.00 within 18 months.
- Bloomberry Resorts: Consider a speculative position at PHP 150–160, with a 2026 target of PHP 200.

In a world of macro uncertainty, these small caps offer a chance to profit from mispriced assets and insider-backed optimism. For contrarian investors, this is where the action is.