How to Find Net-Net Stocks in Japan and Hong Kong

Step 1: get the list of listed companies

Japan: the Japan Exchange Group publishes a List of TSE-listed Issues as a spreadsheet, with each company's code, name, market segment and industry. It covers the Prime, Standard and Growth markets.

Hong Kong: HKEX publishes securities lists for its markets. For net-nets you want ordinary shares on the Main Board and GEM, and you can drop funds, warrants and other products.

Step 2: get the balance sheets

Japan: annual securities reports (yuho) are filed on EDINET, the Financial Services Agency's disclosure system, and earnings releases (kessan tanshin) appear first on TDnet, the exchange's timely disclosure service. Earnings releases come out sooner, so they are the usual source for the latest balance sheet. Most Japanese companies have a March year end. Many filings are in Japanese only, though more large companies now publish English versions.

Hong Kong: annual and interim reports are on HKEXnews. Main Board companies must publish preliminary annual results within three months of the year end and interim results within two months of the half-year end. Many companies report in Hong Kong dollars, and many with mainland China operations report in renminbi.

Step 3: calculate NCAV and compare it with market cap

NCAV is total current assets minus total liabilities. EveryNetNet also subtracts minority interest and preferred equity, which makes the test slightly stricter.

On a Japanese consolidated balance sheet, the lines are 流動資産合計 (total current assets), 負債合計 (total liabilities) and 非支配株主持分 (non-controlling interests). Hong Kong statements use "total current assets", "total liabilities" and "non-controlling interests", and many also show a "net current assets" line, which is current assets minus current liabilities only. Don't use that line on its own: NCAV subtracts all liabilities, including long-term debt and lease liabilities.

For market cap, use shares outstanding net of treasury shares. Japanese companies often hold large amounts of their own stock, and counting those shares overstates market cap. Then divide market cap by NCAV. Below 1.0 is a net-net. Below 0.67 meets Graham's original two-thirds line.

Step 4: checks for Japanese net-nets

• What the current assets are made of. Cash and short-term securities are worth more in a liquidation than inventory and receivables.
• Long-term investment securities. Many Japanese companies hold shares in customers and partners. These count for nothing in NCAV, so they can be hidden extra value.
• Shareholder returns. Since March 2023 the Tokyo Stock Exchange has asked companies trading below book value to publish plans to improve. Check whether the company has one and whether it is raising dividends or buying back shares.
• Japan's net-nets are less deep than most. In the October 2026 count their median P/NCAV was 0.85, against 0.68 for the whole list.

Step 5: checks for Hong Kong net-nets

• Who controls the company. Many small Hong Kong companies have a controlling shareholder, so minority investors have little say over how cash is used.
• Where the cash is. Check whether it sits in Hong Kong or with mainland China subsidiaries, and whether the company has a record of paying it out.
• Related-party transactions and the auditor's report. Read both before trusting a cheap headline ratio.
• Liquidity. Many Hong Kong net-nets trade very little, so check daily volume against the position you want.

Or let a screener do steps 1 to 3

Doing this by hand is fine for a handful of companies, but both markets list thousands. EveryNetNet runs steps 1 to 3 every day for Japan, Hong Kong and 50+ other countries. Filter the Pro list by country to see the current net-nets in either market, then spend your time on steps 4 and 5.

Frequently asked questions