Computer & Technologies Holdings Ltd. (0046) AI Stock Analysis

• Market Cap: HK$381.01M
• Dividend Yield: 7.24%
• Average Volume (3M): 22.52K
• Price to Earnings (P/E): 12.9
• Beta (1Y): 0.30
• Revenue Growth: -1.26%
• EPS Growth: -10.80%
• Country: HK
• Employees: 337
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): 0.08
• Shares Outstanding: 244,334,380
• 10 Day Avg. Volume: 20,429
• 30 Day Avg. Volume: 22,520
• PEG Ratio: -0.90
• Price to Book (P/B): 0.74
• Price to Sales (P/S): 1.43
• P/FCF Ratio: 9.80
• 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
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: HK$1.50 ▼(-6.83% Downside)

The overall stock score of 70 reflects a balance of strong financial performance and attractive valuation, offset by bearish technical indicators. The company's financial health is robust, with low leverage and efficient cash conversion, but recent declines in revenue and cash flow growth need attention. The stock's valuation is appealing, supported by a reasonable P/E ratio and high dividend yield. However, technical analysis suggests caution due to bearish momentum and oversold conditions.

Positive Factors

Financial Stability

A low debt-to-equity ratio indicates financial stability and low leverage, providing the company with flexibility to invest in growth opportunities without being burdened by high debt levels.

Profit Margins

Strong profit margins suggest efficient cost management and pricing power, which are critical for sustaining profitability and competitive advantage in the long term.

Cash Conversion Efficiency

Efficient cash conversion supports liquidity and the ability to reinvest in the business, pay dividends, or reduce debt, enhancing long-term financial health.

Negative Factors

Revenue Growth Challenges

A decline in revenue growth indicates potential challenges in market expansion or product demand, which could impact future profitability and market position if not addressed.

Cash Flow Decline

Declining cash flow growth can limit the company's ability to fund operations and investments, potentially affecting its capacity to sustain growth and financial commitments.

Earnings Growth Decline

A decline in earnings per share growth reflects challenges in profitability and could signal issues in operational efficiency or market competitiveness, impacting investor confidence.

Computer & Technologies Holdings Ltd. Business Overview & Revenue Model

Company Description

Computer And Technologies Holdings Limited, an investment holding company, provides information technology (IT) solutions for enterprises, multinational corporations, and government organizations in Hong Kong, Mainland China, and internationally. It operates in three segments: Application Services, Solutions and Integration Services, and Investments. The Application Services segment primarily provides enterprise applications software and e-business services for enterprises, including the provision of enterprise application software with implementation and ongoing support services; and government electronic trading services, cloud services, and other related value-added services. Its Solutions and Integration Services segment offers IT solutions implementation and application software development; provision of IT and related operation/infrastructure outsourcing services; business process outsourcing services; and IT systems and network infrastructure with related design, implementation, and ongoing support services. The company's Investments segment engages in various types of investing activities, such property investment for rental income and/or for capital appreciation, and treasury investment in securities. The company also provides system and network integration services; computer support and programming services; products, solutions, and consulting services for cyber intelligence and security; enterprise information management, retail management, and procurement management software products; and human resources management services, as well as sale of computer networks and system platforms, provision of training, and implementation and maintenance of software services. Computer And Technologies Holdings Limited was founded in 1991 and is headquartered in Hong Kong, Hong Kong.

How the Company Makes Money

The company generates revenue through multiple streams, including software licensing fees, system integration services, and ongoing maintenance and support contracts. A significant portion of its income derives from custom software development projects tailored to meet specific client requirements. Additionally, Computer & Technologies Holdings Ltd. may engage in partnerships with other technology firms to enhance its service offerings or expand its market reach, thereby contributing to its overall earnings. The company also benefits from recurring revenue through subscription models for its software products, ensuring a steady cash flow from existing clients.

Computer & Technologies Holdings Ltd. Financial Statement Overview

Summary

Computer & Technologies Holdings Ltd. demonstrates financial stability with strong profitability metrics and low leverage. While revenue growth has recently slowed, the company maintains healthy margins. The balance sheet is robust with low debt levels, and the company efficiently converts its earnings to cash despite recent declines in cash flow growth. Overall, the financial health is strong, but attention to revenue and cash flow growth is necessary.

Income Statement

The income statement shows stable gross and net profit margins with a recent dip in revenue growth. The gross profit margin for 2024 is approximately 54.85%, and the net profit margin is about 11.13%. Revenue saw a slight decline of 2.84% from 2022 to 2023, indicating challenges in maintaining revenue growth. However, EBIT and EBITDA margins are healthy at 17.08% and 14.67%, respectively, reflecting good operational efficiency.

Balance Sheet

The balance sheet is strong with a low debt-to-equity ratio of approximately 0.04, indicating low leverage. The equity ratio is solid at 74.51%, showcasing robust shareholder equity relative to total assets. ROE for 2024 is at 5.80%, which is moderate, but reflects consistent profitability. Overall, the balance sheet reflects financial stability and low risk.

Cash Flow

The cash flow statement indicates solid free cash flow generation with a slight decline in operating cash flow compared to the previous year. The free cash flow to net income ratio is 1.31, demonstrating efficient conversion of earnings to cash. However, free cash flow growth rate is negative at -24.08%, suggesting a need for improvement in cash flow expansion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	253.73M	261.08M	257.50M	268.72M	265.50M	256.26M
Gross Profit	142.38M	143.19M	135.84M	145.00M	152.43M	144.79M
EBITDA	42.45M	63.00M	59.87M	71.38M	71.90M	75.35M
Net Income	29.49M	29.07M	33.35M	47.01M	53.84M	60.13M
Balance Sheet
Total Assets	656.72M	672.61M	654.51M	678.49M	681.30M	667.27M
Cash, Cash Equivalents and Short-Term Investments	329.16M	128.91M	318.35M	313.98M	305.94M	303.01M
Total Debt	17.55M	19.30M	9.16M	12.03M	18.25M	7.04M
Total Liabilities	147.96M	170.35M	148.51M	155.40M	157.67M	151.71M
Stockholders Equity	507.63M	501.09M	504.66M	521.65M	522.14M	513.22M
Cash Flow
Free Cash Flow	46.73M	37.98M	50.02M	59.70M	53.82M	72.72M
Operating Cash Flow	52.75M	44.03M	50.44M	60.64M	56.35M	78.34M
Investing Cash Flow	425.58M	-13.16M	-120.36M	89.71M	-114.01M	37.30M
Financing Cash Flow	-32.01M	-38.99M	-59.90M	-51.88M	-54.97M	-37.57M

Computer & Technologies Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.61
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0046, the sentiment is Positive. The current price of 1.61 is above the 20-day moving average (MA) of 1.56, above the 50-day MA of 1.57, and above the 200-day MA of 1.55, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 51.05 is Neutral, neither overbought nor oversold. The STOCH value of 51.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0046.

Computer & Technologies Holdings Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0046	70 Outperform	HK$381.01M	12.93	5.83%	7.24%	-1.26%	-10.80%
1900	67 Neutral	HK$455.85M	1.00	20.36%	9.12%	27.05%	842.50%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
1460	61 Neutral	HK$263.28M	15.46	2.96%	3.33%	8.45%	-30.47%
1147	55 Neutral	HK$286.29M	23.73	5.44%	1.49%	28.18%	47.50%
1985	55 Neutral	HK$387.00M	-192.54	-0.83%	8.55%	-1.86%	-105.19%
1949	46 Neutral	HK$134.40M	-1.21	-83.97%	―	-78.41%	-3530.77%