Merchant House International Limited (MHI) AI Stock Analysis

• Market Cap: AU$14.14M
• Dividend Yield: N/A
• Average Volume (3M): 0.00
• Price to Earnings (P/E): ―
• Beta (1Y): -4.12
• Revenue Growth: -71.66%
• EPS Growth: 61.38%
• Country: AU
• Employees: 1,004
• Sector: Consumer Cyclical
• Sector Strength: 54
• Industry: Apparel - Footwear & Accessories
• EPS (TTM): -0.12
• Shares Outstanding: 94,266,495
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 0
• PEG Ratio: -0.19
• Price to Book (P/B): 0.16
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -0.78
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 37 Underperform
• Price Target: ―

The overall score reflects the significant financial challenges faced by Merchant House International Limited, including declining revenues and negative profitability. The technical analysis shows no significant momentum, and the valuation metrics highlight ongoing losses. These factors combined contribute to a low overall score, indicating a risk-laden investment.

Merchant House International Limited Business Overview & Revenue Model

Company Description

Merchant House International Limited designs, manufactures, and markets home textiles, seasonal and decorative products, and leather shoes in the United States and internationally. It operates through Home Textile, Footwear Trading, and Footwear Manufacturing segments. The company offers kitchen items, tabletops, decorative pillows, seasonal decorations, and kitchen rugs; and footwear products, such as work, safety toe, security, motorcycle, hunting, farm and ranch, and western boots, as well as loggers and waterproof footwear for men. It also engages in the export trading of work boots and safety shoes. The company was founded in 1978 and is headquartered in Chai Wan, Hong Kong.

How the Company Makes Money

Merchant House International Limited makes money primarily through the sale of its manufactured products. The company's revenue streams include the production and distribution of home textiles, footwear, and seasonal decorations. MHI supplies these products to large retailers and wholesalers, particularly in the North American and European markets. Key factors contributing to its earnings include longstanding relationships with major retail clients, a strong manufacturing base in China that enables cost-effective production, and a diversified product range that meets varying consumer demands. Partnerships with retail giants and a focus on quality and innovation also play a significant role in driving sales and maintaining a steady revenue flow.

Merchant House International Limited Financial Statement Overview

Summary

Merchant House International Limited is experiencing significant financial struggles, with declining revenues, negative margins, and cash flow challenges. Despite a strong equity position, the persistent negative profitability and cash flow issues are critical areas of concern. The company needs to address its cost structure and operational efficiency to improve its financial standing.

Income Statement

The company has faced significant declines in revenue and profitability over the last few years. The gross profit margin has been negative, indicating that cost of goods sold exceeds revenue, contributing to negative EBIT and EBITDA margins. Additionally, the net profit margin has been consistently negative, with a declining revenue trend, which is a major concern for the company's financial health.

Balance Sheet

The company maintains a strong equity position relative to its total assets, with an equity ratio of over 84%. However, the return on equity is negative due to substantial net losses. The debt-to-equity ratio is low, indicating limited leverage, which is a positive aspect but also reflects the company's inability to generate profits.

Cash Flow

The company is struggling with negative operating and free cash flows, indicating operational challenges. The free cash flow to net income ratio is unfavorable, and the operating cash flow has been consistently negative, highlighting cash management issues and raising concerns about sustainability.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	3.25M	5.63M	19.46M	22.91M	40.71M	21.88M
Gross Profit	-2.70M	1.42M	-3.78M	-1.76M	19.62M	-7.97M
EBITDA	-1.88M	-3.73M	-8.84M	-5.91M	-6.15M	-13.57M
Net Income	4.52M	-7.39M	-8.03M	13.51M	-8.80M	-12.82M
Balance Sheet
Total Assets	33.50M	33.55M	41.01M	46.45M	45.02M	69.15M
Cash, Cash Equivalents and Short-Term Investments	2.33M	6.61M	7.49M	11.18M	645.00K	5.29M
Total Debt	35.00K	80.00K	391.00K	2.51M	7.76M	19.36M
Total Liabilities	2.24M	5.24M	6.23M	7.35M	18.81M	26.81M
Stockholders Equity	31.25M	28.32M	34.77M	39.10M	26.21M	42.34M
Cash Flow
Free Cash Flow	-5.90M	-5.52M	-7.29M	-7.04M	-5.60M	-2.52M
Operating Cash Flow	-5.90M	-5.48M	-7.15M	-6.55M	-5.28M	832.00K
Investing Cash Flow	5.04M	5.09M	4.82M	21.87M	5.18M	-4.52M
Financing Cash Flow	-117.00K	-255.00K	-2.68M	-6.47M	-2.40M	2.53M

Merchant House International Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HVN	73 Outperform	$6.57B	15.20	9.58%	4.55%	1.77%	15.57%
LOV	69 Neutral	AU$3.42B	39.61	82.71%	3.24%	11.86%	14.62%
Sector *	66 Neutral	£1.81B	11.44	6.20%	3.00%	0.63%	-17.57%
BBN	62 Neutral	AU$240.16M	82.79	2.78%	1.03%	-2.62%	-70.47%
MYR	53 Neutral	€1.04B	21.51	8.55%	16.53%	-2.43%	-49.64%
MHI	37 Underperform	AU$14.14M	―	-8.07%	―	-71.66%	61.38%

Merchant House International Limited Corporate Events

Merchant House International Finalizes Asset Sales Amidst Operational Wind-Down

Merchant House International Limited has completed the sale of its 33.79% interest in Tianjin Tianxing Kesheng Leather Products Company Limited, finalizing the transaction with proceeds released from escrow. The company has also ceased operations of its American Merchant, Inc. division, selling its equipment for US$4 million and is in advanced discussions regarding the sale of its land and buildings. The company remains solvent with plans to divest remaining assets, distribute funds to shareholders, and potentially delist from the ASX due to inadequate operations.

Merchant House Completes AMI Equipment Sale

Merchant House International Limited announced the successful receipt of the final payment from the sale of equipment at its AMI factory in the USA. The transaction, which involved a total of US$4 million, was structured with an initial payment and a promissory note. The completion of this transaction provides the company with additional liquidity, potentially impacting its operational capabilities and financial strategy.

Merchant House International Receives First Tranche of Promissory Note

Merchant House International Limited has announced the successful receipt of the first tranche of a promissory note related to the sale of equipment at its AMI factory in the USA. The company had previously agreed to a payment structure totaling US$4 million, with US$1 million received upfront and the remaining US$3 million to be paid in installments. This development marks a significant step in the company’s financial transactions, potentially impacting its cash flow and operational strategy.

Merchant House International Faces Suspension from ASX

Merchant House International Limited (MHI) has been suspended from quotation on the ASX due to non-compliance with Australian corporate governance regulations and inadequate operations. The suspension will remain until MHI appoints the required number of Australian resident directors and demonstrates operational adequacy to meet ASX listing rules.

Merchant House International Sells AMI Textile Equipment at a Loss

Merchant House International Limited has finalized the sale of equipment from its American Merchant Inc textile factory to United Textile Machinery Corp and Gibbs International Inc for US$4 million. The transaction involves an immediate payment of US$1 million and a promissory note for the remaining amount, resulting in a substantial loss due to the lower sale price compared to the book value of the assets. The company continues to seek buyers for the remaining land and buildings of the AMI facility.

Merchant House International Faces Trading Suspension Amid Leadership Transition

Merchant House International Limited, an entity listed on the Australian Securities Exchange, announced a suspension of trading in its shares due to the resignation of its sole Australian director, Ian Burton, with no immediate replacement. The suspension, requested by the company, is anticipated to last until 28 February 2025, pending the appointment of a new Australian director, highlighting a temporary leadership gap within the company.

Merchant House International Announces Director Change

Merchant House International Limited has announced a change in its board of directors with Ian Burton ceasing to be a director as of February 5, 2025. This change is documented in the final director’s interest notice, which lists Ian Burton’s holdings of 305,500 fully paid ordinary shares, indicating a significant stake in the company. The notice adheres to the ASX’s listing rules, ensuring transparency in corporate governance and potential implications for stakeholders.