Far East Consortium International (0035) AI Stock Analysis

• Market Cap: $2.45B
• Dividend Yield: 5%
• Average Volume (3M): 1.08M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.45
• Revenue Growth: -7.62%
• EPS Growth: -328.97%
• Country: HK
• Employees: 4,500
• Sector: Real Estate
• Sector Strength: 57
• Industry: Real Estate - Development
• EPS (TTM): -0.14
• Shares Outstanding: 3,059,040,500
• 10 Day Avg. Volume: 1,141,988
• 30 Day Avg. Volume: 1,081,919
• PEG Ratio: <0.01
• Price to Book (P/B): 0.16
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 4.79
• 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: $1.10
• Price Target Upside: 37.29% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 58 Neutral
• Price Target: ―

Far East Consortium International's overall score is driven by strong revenue growth and improved cash flow management, which are tempered by high leverage and modest profitability margins. The technical analysis shows mixed signals with short-term upward momentum but longer-term downward trends. The valuation presents a high dividend yield but is overshadowed by a negative P/E ratio, indicating profitability concerns. Investors should weigh the high dividend against the risks associated with leverage and profitability.

Positive Factors

Debt Management

Net gearing ratio improved slightly to 67.6%, with continued disposal of non-core assets expected to help reduce its debt load.

Geographical Diversification

Far East Consortium’s core business operations, including property, hotel, and gaming, are geographically diversified, differentiating it from other Hong Kong-based property plays.

Portfolio Expansion

Portfolio expansion to drive long-term hotel earnings growth.

Negative Factors

Currency and Execution Risks

Any adverse foreign currency movements and execution issues at its overseas operations could affect FEC’s earnings and NAV.

Dividend Policy

No final dividend was declared for FY25, which may lead to share price volatility.

Financial Performance

FY25 net loss reached HKD1.3bn due to revaluation loss on investment properties and impairment provisions.

Far East Consortium International Business Overview & Revenue Model

Company Description

Far East Consortium International Limited, an investment holding company, engages in the property development and investment, hotel operations and management, car park operations and facilities management, gaming and related operations, and securities and financial product investments. It develops a portfolio of residential properties; invests in retail and office buildings; and operates hotels. The company also operates third party and self-owned car parks; and owns and operates casinos and gaming facilities, as well as operated bars. In addition, it provides loan financing, sales agency, mortgage, administration and management, treasury management, vault, and hotel management and consultancy services. As of March 31, 2022, the company owned and operated 31 hotels with approximately 8,149 rooms; and managed 424 car parks with approximately 120,200 car parking bays. It has operations in Australia, New Zealand, Hong Kong, Malaysia, the Czech Republic, the People's Republic of China, Singapore, the United Kingdom, and the rest of Europe. The company was incorporated in 1990 and is based in Central, Hong Kong.

How the Company Makes Money

Far East Consortium International Limited generates revenue through several key streams. The primary source of income is its property development and investment division, which involves the acquisition, development, and sale of residential and commercial properties. This segment earns substantial revenue from the sale of real estate projects upon completion. The hospitality segment contributes to earnings through the operation and management of hotels, which generate income from room bookings, food and beverage sales, and other guest services. Additionally, FECIL operates car parks, earning revenue from parking fees and service charges. The company may also engage in strategic partnerships and joint ventures that enhance its development capabilities and expand its market reach, further contributing to its revenue streams.

Far East Consortium International Financial Statement Overview

Summary

Far East Consortium International has demonstrated notable revenue growth and improved cash flow management, which are positive indicators for future performance. However, the company faces challenges in terms of profitability margins and high leverage, which necessitate strategic focus on cost control and debt management. Overall, the financial health of the company is on an upward trajectory, but careful attention to profitability and leverage is crucial.

Income Statement

Far East Consortium International has shown a strong revenue growth of 54.4% from the previous year, indicating a positive trajectory in its income generation. The gross profit margin stands at 33.9% and net profit margin at 2.2%, which are moderate and suggest room for improvement in cost management and net profitability. The EBIT margin is 16.9%, reflecting decent operational efficiency. Overall, the income statement reflects growth but also highlights the need for better profitability enhancement.

Balance Sheet

The company has a high debt-to-equity ratio of 1.93, indicating significant leverage, which could pose risks if not managed properly. The return on equity is moderate at 1.55%, suggesting that shareholders are receiving limited returns on their investments. An equity ratio of 30.8% indicates a balanced capital structure but leans toward higher liabilities. The balance sheet shows stability with a need for careful management of leverage.

Cash Flow

The company witnessed a substantial improvement in free cash flow from a negative figure to a positive one, indicating better cash management. The operating cash flow to net income ratio is a healthy 15.8, showing strong cash generation ability relative to net income. However, the free cash flow to net income ratio of 9.5 also indicates efficient cash usage. Overall, the cash flow statement shows significant improvement in liquidity and cash management.

Breakdown	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	10.20B	6.61B	6.05B	6.00B	7.59B
Gross Profit	3.46B	1.89B	2.16B	1.88B	2.40B
EBITDA	2.23B	1.21B	1.47B	1.48B	1.81B
Net Income	226.10M	172.19M	1.51B	543.19M	365.85M
Balance Sheet
Total Assets	47.26B	53.42B	54.80B	49.90B	41.78B
Cash, Cash Equivalents and Short-Term Investments	3.92B	6.62B	9.58B	7.81B	5.63B
Total Debt	28.13B	35.56B	34.71B	31.19B	26.99B
Total Liabilities	32.39B	40.68B	39.80B	35.73B	30.37B
Stockholders Equity	14.58B	12.36B	14.63B	13.80B	11.12B
Cash Flow
Free Cash Flow	2.16B	-3.09B	-2.42B	519.20M	-2.51B
Operating Cash Flow	3.58B	-2.20B	-1.36B	1.45B	-1.10B
Investing Cash Flow	-1.11B	-1.30B	-68.08M	-2.43B	-3.72B
Financing Cash Flow	-4.04B	1.10B	3.95B	2.27B	5.37B

Far East Consortium International Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0035, the sentiment is Negative. The current price of 0.8 is below the 20-day moving average (MA) of 0.83, below the 50-day MA of 0.89, and below the 200-day MA of 0.93, indicating a bearish trend. The MACD of -0.03 indicates Negative momentum. The RSI at 39.96 is Neutral, neither overbought nor oversold. The STOCH value of 75.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:0035.

Far East Consortium International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	63 Neutral	$6.74B	18.42	-1.93%	7.60%	4.67%	-25.44%
0026	60 Neutral	HK$2.53B	―	-1.88%	17.53%	-1.10%	27.14%
0194	60 Neutral	HK$1.64B	―	-7.58%	10.42%	26.14%	-2.71%
0035	58 Neutral	$2.45B	―	-11.87%	5.00%	-7.62%	-328.97%
AGPYF	―	$298.94M	―	-90.47%	―	―	―
USH	―	€265.17M	―	-10.95%	4.52%	―	―
0088	57 Neutral	HK$2.09B	27.61	1.18%	3.54%	-50.00%	55.44%

Far East Consortium International Corporate Events

Far East Consortium Announces Strategic Share Disposal in BC Investment Group

Far East Consortium International Limited announced a discloseable transaction involving the disposal of shares in BC Investment Group Holdings Limited. The transaction includes a contingent Per Share Earn-Out Payment, which could represent up to 4.7% of the Purchase Price, depending on the performance of the Target Group post-completion. Additionally, the Purchaser will repay an underwriting fee on behalf of the Target Company, fulfilling obligations under a previous agreement. This transaction is expected to potentially enhance the company’s financial position and align with its strategic goals.

Far East Consortium Announces Strategic Share Disposal

Far East Consortium International Limited announced the sale of shares in BC Investment Group Holdings Limited, marking a significant discloseable transaction under Hong Kong’s Listing Rules. The transaction involves the sale of shares by the company’s indirect wholly-owned subsidiary to a purchaser, with a purchase price determined through arm’s length negotiations. This move is expected to impact the company’s financials and market positioning, as it aligns with strategic decisions to optimize asset management and shareholder value.

Far East Consortium Expands UK Portfolio with Major Property Acquisition

Far East Consortium International Limited has announced a significant transaction involving the sale and purchase of shares in a hotel and a town hall property in the United Kingdom. The transaction, valued at approximately £47.2 million, is considered a discloseable transaction under the Hong Kong Stock Exchange Listing Rules, indicating a strategic move to enhance the company’s asset portfolio in the UK market.