Highway Holdings (HIHO) AI Stock Analysis

• Market Cap: $3.78M
• Dividend Yield: 14.63%
• Average Volume (3M): 134.98K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.27
• Revenue Growth: -19.68%
• EPS Growth: -2.61%
• Country: US
• Employees: 374
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Metal Fabrication
• EPS (TTM): -0.08
• Shares Outstanding: 4,601,825
• 10 Day Avg. Volume: 5,856
• 30 Day Avg. Volume: 134,976
• PEG Ratio: -0.69
• Price to Book (P/B): 1.30
• Price to Sales (P/S): 1.10
• P/FCF Ratio: -17.66
• Enterprise Value/Market Cap: 0.67
• Enterprise Value/Revenue: 0.36
• Enterprise Value/Gross Profit: 1.08
• Enterprise Value/Ebitda: 50.52
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 53 Neutral
• Price Target: $0.88 ▲(2.09% Upside)

Highway Holdings' stock score is primarily impacted by its weak financial performance and bearish technical indicators. The company's declining revenues and negative cash flow are significant concerns. While the high dividend yield is a positive factor, the negative P/E ratio suggests underlying profitability issues. The absence of positive market momentum further weighs on the stock's attractiveness.

Positive Factors

Improved Financial Leverage

The reduction in debt-to-equity ratio indicates improved financial leverage, enhancing the company's ability to manage its obligations and invest in growth opportunities.

New OEM Customer Approval

Securing a new OEM customer for mass production can help offset revenue losses from previous customer shifts, indicating potential for revenue stabilization and growth.

Operational Efficiency

Slight improvement in gross profit margin reflects stable operational efficiency, which can support profitability even amidst revenue challenges.

Negative Factors

Declining Revenue

The significant decline in revenue over five years indicates a negative growth trajectory, challenging the company's ability to sustain its market position.

Negative Cash Flow

Negative operating cash flow suggests cash management challenges, which could impact the company's ability to fund operations and invest in future growth.

OEM Business Shift

The shift of OEM business to a customer's own manufacturing facilities reduces Highway Holdings' revenue base, posing a risk to its long-term revenue stability.

Highway Holdings Business Overview & Revenue Model

Company Description

Highway Holdings Limited (HIHO) is a Hong Kong-based company that specializes in the design, manufacture, and distribution of a variety of high-quality products, primarily in the gift and premium sectors. The company operates through its subsidiaries in China, where it produces a range of items including custom-designed metal and plastic products, promotional products, and other consumer goods. Highway Holdings serves a diverse customer base, including retailers, wholesalers, and corporate clients, catering to their needs for customized merchandise and promotional items.

How the Company Makes Money

Highway Holdings generates revenue primarily through the sale of its manufactured products, which include a wide array of promotional and gift items. The company's revenue model is largely built on bulk orders from clients looking for custom-designed products. Key revenue streams include direct sales to retailers and wholesalers, as well as partnerships with promotional companies that require unique merchandise for their clients. The company may also benefit from long-term contracts with major clients, which provide a steady stream of income. Additionally, Highway Holdings capitalizes on its manufacturing capabilities in China to keep production costs low, thus enhancing its competitive edge in pricing and profitability.

Highway Holdings Financial Statement Overview

Summary

Highway Holdings faces significant challenges with declining revenues and fluctuating profitability. Despite operational improvements in profit margins and a healthier balance sheet, cash flow management remains a critical area of concern. The company needs to address its revenue and cash generation strategies to enhance financial stability.

Income Statement

Highway Holdings has experienced a decline in revenue from $12.56M in 2020 to $7.41M in 2025, reflecting a negative growth trajectory. The gross profit margin improved from 33.1% in 2020 to 33.3% in 2025, indicating stable operational efficiency. However, the net profit margin improved only slightly from a negative position of -3.6% in 2020 to 1.4% in 2025. The repeated negative EBIT and EBITDA margins highlight ongoing operational challenges.

Balance Sheet

The company's debt-to-equity ratio decreased from 0.26 in 2020 to 0.13 in 2025, showcasing improved financial leverage. The equity ratio remained stable, indicating a solid capital structure with stockholders' equity consistently covering a significant portion of total assets. Return on equity improved from -6.3% in 2020 to 1.7% in 2025, reflecting recovering profitability.

Cash Flow

Operating cash flow turned negative in 2025 at -$0.36M, a concerning trend from the positive $0.44M in 2020. Free cash flow also deteriorated, indicating potential cash management challenges. The free cash flow to net income ratio reflects volatility, pointing towards inconsistencies in cash generation relative to earnings.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	7.08M	7.41M	6.32M	10.24M	12.37M	9.17M
Gross Profit	2.34M	2.47M	1.71M	3.14M	3.77M	2.71M
EBITDA	50.00K	756.00K	-381.00K	828.00K	1.67M	400.00K
Net Income	69.00K	106.00K	-959.00K	-294.00K	443.00K	-461.00K
Balance Sheet
Total Assets	9.12M	9.55M	11.32M	13.88M	14.86M	15.49M
Cash, Cash Equivalents and Short-Term Investments	5.82M	6.18M	6.60M	7.01M	7.38M	7.76M
Total Debt	652.00K	810.00K	1.39M	2.06M	1.20M	1.96M
Total Liabilities	2.76M	3.29M	4.68M	5.67M	5.59M	5.71M
Stockholders Equity	6.37M	6.27M	6.64M	8.20M	9.27M	9.76M
Cash Flow
Free Cash Flow	0.00	-461.00K	297.00K	717.00K	-298.00K	-192.00K
Operating Cash Flow	0.00	-360.00K	415.00K	809.00K	-164.00K	-104.00K
Investing Cash Flow	0.00	232.00K	-102.00K	991.00K	-1.20M	-78.00K
Financing Cash Flow	0.00	-492.00K	-557.00K	-920.00K	-549.00K	-902.00K

Highway Holdings Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.86
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HIHO, the sentiment is Positive. The current price of 0.86 is below the 20-day moving average (MA) of 1.12, below the 50-day MA of 1.34, and below the 200-day MA of 1.61, indicating a neutral trend. The MACD of -0.10 indicates Positive momentum. The RSI at 55.22 is Neutral, neither overbought nor oversold. The STOCH value of 15.48 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HIHO.

Highway Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
AP	54 Neutral	$83.13M	-15.29	-8.73%	―	0.20%	88.39%
HIHO	53 Neutral	$3.78M	-7.03	-8.38%	14.63%	-19.68%	-2.61%
MTEN	44 Neutral	$3.65M	-5.41	-81.84%	―	―	―
TPCS	41 Neutral	$46.06M	-88.80	-5.10%	―	1.15%	94.58%
SGBX	40 Underperform	$14.73M	>-0.01	-228.41%	―	-43.44%	85.17%

Highway Holdings Corporate Events

Highway Holdings Reports Q2 Loss Amid OEM Business Shift

Highway Holdings Limited reported a significant decline in net sales and a net loss for the second quarter of fiscal year 2026, compared to the same period in the previous year. The company faced challenges due to a reorganization by a major customer, which reduced its OEM motor business. However, a new OEM customer has approved mass production of its motor product, which is expected to eventually offset this loss. Additionally, Highway Holdings received a substantial order from a gaming industry customer, indicating a potential recovery in that sector. The company is exploring mergers and acquisitions and new business opportunities, including entering the Chinese market and providing services for the elderly population, to diversify its revenue streams and reduce dependency on existing customers.

Highway Holdings Announces Board Changes with New Director Appointment

Highway Holdings Limited announced changes in its Board of Directors on October 25, 2025. Tiko Aharonov retired from the Board, and Doron Aharonov was appointed as a Class III director to fill the vacancy. Doron Aharonov brings experience from his career as a real estate broker in New York and Israel. The transition is not due to any disagreements within the company, and the Board expressed gratitude for Tiko Aharonov’s contributions.