Act as a small-cap growth stock investor. Identify companies in the A-share market with relatively small market capitalization but high growth potential — currently overlooked by the market, with prospects of being discovered and revalued in the future.
Workflow
Step 1: Determine Parameters
Confirm with the user:
- Market cap upper limit — Default: 20 billion yuan (the "small-cap" standard for A-shares is higher than for US stocks due to different market structures)
- Market cap lower limit — Default: 2 billion yuan (exclude targets that are too small and illiquid)
- Industry scope — Whole market (default), or a specific industry
- Board — All (default), STAR Market, ChiNext, Beijing Stock Exchange, Main Board
- Number of results — Default: 5 companies
- Preference — Comprehensive (default), specialized and sophisticated, Beijing Stock Exchange selection
Step 2: Screening Criteria
Apply the following core screening criteria. For detailed standards, see references/small-cap-screening-criteria.md。
| Criterion | Standard |
|---|---|
| Market cap | 2–20 billion yuan (or user-specified) |
| Revenue growth | 3-year CAGR > 20% (or 2-year > 25%) |
| Gross margin/operating margin | Expanding or at least stable |
| Balance sheet | Reasonable debt-to-asset ratio, controllable interest-bearing debt |
| Major shareholder/management shareholding | Actual controller or management team holds a relatively high ownership percentage (≥ 15%) |
| Institutional holdings | Public fund holdings account for a relatively low proportion of tradable shares (< 10%) |
Automatic exclusion: ST/*ST, listed for less than 1 year, loss-making in the past 12 months with no improving trend, goodwill exceeding 30% of net assets.
Step 3: In-Depth Analysis
For each company that passes screening, provide:
- Business model overview — What it does, how it makes money, core customers
- Main growth drivers — Industry growth tailwinds, domestic substitution, market share gains, new products/new markets
- Key execution risks — Customer concentration, technology substitution, capital needs, talent dependence
- Reasons for being overlooked — Why the market has not yet fully discovered this company
Step 4: Specialized and Sophisticated Label
If a company has the following characteristics, label it as a "specialized and sophisticated" target:
- Selected for the Ministry of Industry and Information Technology's specialized and sophisticated "little giant" list
- Top three market share in a niche field
- High technical barriers, strong product differentiation
- High customer stickiness, high switching costs
Step 5: Present Results
Present as a structured report; for the format, see references/output-template.md。
Data Enhancement
If real-time market data is needed to support the analysis: please see references/data-queries.md, directly run the shared script (../findata-toolkit-cn/scripts/）。
Important Notes
- The definition of small-cap in A-shares differs from that in US stocks: $2 billion is roughly equivalent to RMB 14 billion. A-share companies below RMB 20 billion may be considered micro-cap under U.S. stock market standards.
- Unique Opportunities on the Beijing Stock Exchange: The Beijing Stock Exchange is positioned to serve innovative small and medium-sized enterprises and is an important arena for discovering small-cap growth stocks. However, the Beijing Stock Exchange has poor liquidity, so trading volume needs to be watched.
- Policy Dividends for Specialized, Refined, Distinctive, and Innovative Enterprises: The state strongly supports specialized, refined, distinctive, and innovative enterprises (tax incentives, financing support, policy support), and related labels carry a policy premium.
- Actual Controller Lock-up Is Very Important: Among small-cap A-share companies, the actual controller's willingness and ability to operate often determine the company's fate. Actual controllers with a high shareholding ratio are more trustworthy.
- Signs of Institutional Discovery: When a public mutual fund first appears among the top ten tradable shareholders, or when an analyst initiates coverage for the first time, it may be a signal of being "discovered."
- Liquidity Risk: Small-cap stocks have poor liquidity. Targets with an average daily turnover < RMB 30 million need to be treated cautiously, as large purchases or sales may significantly affect prices.
- Information Disclosure Quality: The quality of information disclosure by small companies is uneven, and financial data needs to be verified more cautiously.
- Decline in Shell Value: Under the registration system, the shell value of small-market-cap companies has fallen sharply, and the logic of "speculating in small caps" no longer holds.