Hong Kong-based Bonso Electronics (NASDAQ:BNSO) had been flying quietly under the radar -- until today. Up almost 35% after the opening, the stock is the biggest percentage gainer on the Nasdaq, rocketing to $7 and change. That's less than the firm's 52-week high of $9.71, but much more than the 52-week low of $2.50.

What sent the stock up was a dream year-end report. Revenue was up 61%. Net income soared 236%. And then there's this dream of a CEO quote from the release: "We delivered record revenue, earnings, and free cash flow, strengthened our balance sheet, lowered our interest costs, and increased investment in the future growth of our businesses." Pinch me!

Consider just how low Bonso is flying on Wall Street. Only one analyst follows it. That person expected the company to earn $0.37 this fiscal year, and Bonso exceeded that by two cents. This analyst is projecting $0.43 a share next year.

One of Bonso's markets is telecommunications. And, yes, its profit margins at 3% are similar to those at Lucent (NYSE:LU) and less than those at Nortel (NYSE:NT). But, the company has $1.82 a share in cash. Even at this morning's price of $7.68 a share, that is a lot of cash.

In the electronic scales and weight instrument market, competitors Fisher Scientific (NYSE:FSH) and Mettler-Toledo (NYSE:MTD) have much better margins but also carry heavier debt loads.

Bonso manufactures its products in China, but its customers are primarily in North America and Europe. That combination allows the company to compete on price and, longer term, should allow margins to improve along with volume. The company is trading at 18 times forward earnings, but, with this year's growth and earnings breakout, current earnings estimates may be significantly understated.

What probably has investors going gonzo this morning is Bonso's small capitalization of $39 million. Given the markets the company is in, its growth potential is fantastic. But think back to the CEO's comments about a strengthening balance sheet and free cash flow. Here is a micro-cap investment with the right management focus. This tiny company bears watching.

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Fool contributor W.D. Crotty does not own stock in any of the companies mentioned.