The score is weighed down primarily by poor financial performance (sharp revenue decline, substantial losses, and weak cash flow), only partially offset by low leverage on the balance sheet. Technicals are constructive with price above key moving averages and a positive MACD, but overbought RSI/Stoch readings reduce the technical score. Valuation is also pressured by the negative P/E and lack of dividend yield data.
Positive Factors
Low leverage and high equity ratio
Very low leverage (debt/equity 0.036) and a 92.87% equity ratio provide structural financial flexibility. This reduces default risk in cyclical hospitality/real-estate services, gives capacity to absorb multi-quarter losses and supports investment or restructuring without immediate external financing.
Positive free cash flow relative to losses
A free cash flow to net income ratio of 1.14 shows the company can convert operations into cash despite accounting losses. That cash conversion provides a practical buffer to cover operating needs, preserve liquidity for essential maintenance, and sustain strategic adjustments over several quarters.
Lower systematic volatility (beta)
A beta around 0.55 indicates lower sensitivity to market swings, which supports longer-term planning and reduces pressure from market-driven funding events. Lower volatility can help secure patient capital and permit multi-quarter restructuring or recovery without abrupt financing stress.
Negative Factors
Sharp revenue decline and deep losses
A ~21.6% revenue decline combined with net margin of -190.76% and EBIT margin of -151.64% indicate severe and structural profitability issues. Persistent deep losses erode equity, limit reinvestment, and raise the likelihood of needing asset sales or external capital to sustain core operations over the medium term.
Negative operating and free cash flow trends
Negative operating and free cash flow, with FCF shrinking at -11.27%, undermine the company's ability to maintain properties, fund capex, and meet obligations from operations. Declining cash generation increases reliance on financing or asset disposals and raises structural liquidity risk if revenue recovery lags.
Negative return on equity
A negative ROE of -11.79% shows shareholder capital is generating losses rather than returns. Even with low leverage, persistent negative ROE signals inefficient asset use or weak demand in core operations, making it hard to justify new equity investment and creating long-term pressure on strategic viability.
Far East Hotels & Entertainment Ltd. (0037) vs. iShares MSCI Hong Kong ETF (EWH)
Market Cap
HK$406.37M
Dividend YieldN/A
Average Volume (3M)219.07K
Price to Earnings (P/E)―
Beta (1Y)0.56
Revenue Growth-32.80%
EPS Growth57.37%
CountryHK
Employees60
SectorReal Estate
Sector Strength53
IndustryReal Estate - Services
Share Statistics
EPS (TTM)-0.01
Shares Outstanding752,529,800
10 Day Avg. Volume417,400
30 Day Avg. Volume219,066
Financial Highlights & Ratios
PEG Ratio-1.28
Price to Book (P/B)1.07
Price to Sales (P/S)17.25
P/FCF Ratio-28.81
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Far East Hotels & Entertainment Ltd. Business Overview & Revenue Model
Company DescriptionFar East Hotels and Entertainment Limited, an investment holding company, engages in the hotel operation, property investment and letting, and securities investment and trading business in Hong Kong and Mainland China. It operates and manages the Cheung Chau Warwick Hotel in Cheung Chau, Hong Kong. The company was incorporated in 1978 and is based in Wan Chai, Hong Kong.
How the Company Makes Moneynull
Far East Hotels & Entertainment Ltd. Financial Statement Overview
Summary
Financial results are weak: revenue declined (-21.57%) and profitability is deeply negative (net margin -190.76%, EBIT margin -151.64%). The balance sheet has low leverage (debt-to-equity 0.036) and a high equity ratio (92.87%), but negative ROE (-11.79%) and negative operating/free cash flow signal ongoing operational strain.
Income Statement
30
Negative
Far East Hotels & Entertainment Ltd. has experienced a significant decline in revenue, with a negative revenue growth rate of -21.57% in the most recent year. The company is facing substantial losses, as indicated by the negative net profit margin of -190.76% and negative EBIT margin of -151.64%. The gross profit margin has decreased compared to previous years, reflecting challenges in maintaining profitability.
Balance Sheet
40
Negative
The company's balance sheet shows a low debt-to-equity ratio of 0.036, indicating low leverage and potential stability. However, the return on equity is negative at -11.79%, suggesting inefficiencies in generating returns for shareholders. The equity ratio stands at 92.87%, which is relatively strong, but overall financial health is weakened by persistent losses.
Cash Flow
35
Negative
Cash flow analysis reveals negative operating cash flow and free cash flow, with a free cash flow growth rate of -11.27%. The operating cash flow to net income ratio is negative, indicating cash flow challenges. Despite these issues, the free cash flow to net income ratio is positive at 1.14, suggesting some ability to cover net losses with free cash flow.
Breakdown
TTM
Mar 2024
Mar 2023
Mar 2022
Mar 2021
Mar 2020
Income Statement
Total Revenue
15.88M
18.54M
29.64M
37.17M
51.07M
49.69M
Gross Profit
7.04M
4.24M
5.26M
5.91M
24.67M
26.55M
EBITDA
-8.42M
-23.95M
-28.51M
-3.40M
57.83M
11.05M
Net Income
-20.49M
-35.36M
-33.02M
-7.95M
53.98M
7.89M
Balance Sheet
Total Assets
315.60M
323.01M
364.30M
407.68M
433.36M
389.11M
Cash, Cash Equivalents and Short-Term Investments
28.88M
21.68M
38.38M
53.16M
56.45M
76.59M
Total Debt
10.08M
10.70M
13.25M
21.08M
32.32M
43.66M
Total Liabilities
22.83M
23.00M
26.79M
36.22M
50.53M
63.75M
Stockholders Equity
292.77M
300.00M
337.51M
371.46M
382.83M
325.36M
Cash Flow
Free Cash Flow
-10.95M
-11.10M
-19.06M
-12.96M
3.47M
16.94M
Operating Cash Flow
-6.46M
-9.72M
-17.31M
-10.36M
4.32M
19.94M
Investing Cash Flow
-1.68M
4.70M
19.74M
26.03M
4.97M
-13.00M
Financing Cash Flow
-702.53K
-2.59M
-9.64M
-9.12M
-12.27M
5.15M
Far East Hotels & Entertainment Ltd. Technical Analysis
Technical Analysis Sentiment
Neutral
Last Price0.46
Price Trends
50DMA
0.52
Positive
100DMA
0.48
Positive
200DMA
0.48
Positive
Market Momentum
MACD
<0.01
Positive
RSI
45.34
Neutral
STOCH
16.24
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0037, the sentiment is Neutral. The current price of 0.46 is below the 20-day moving average (MA) of 0.56, below the 50-day MA of 0.52, and below the 200-day MA of 0.48, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 45.34 is Neutral, neither overbought nor oversold. The STOCH value of 16.24 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:0037.
Far East Hotels & Entertainment Ltd. Peers Comparison
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Feb 28, 2026