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Sun Hung Kai & Co. Limited (HK:0086)
:0086

Sun Hung Kai & Co. Limited (0086) AI Stock Analysis

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HK

Sun Hung Kai & Co. Limited

(Stuttgart:0086)

Rating:67Neutral
Price Target:
Sun Hung Kai & Co. Limited has a stable financial foundation with strong cash flow and a solid balance sheet. Despite a recent decline in revenue, profitability metrics have improved, which is a positive sign. Technically, the stock shows mild bearish signals, but valuation metrics like the attractive dividend yield provide a buffer. The combined factors result in a moderate overall score, indicating a balanced risk-reward profile.

Sun Hung Kai & Co. Limited (0086) vs. iShares MSCI Hong Kong ETF (EWH)

Sun Hung Kai & Co. Limited Business Overview & Revenue Model

Company DescriptionSun Hung Kai & Co. Limited, an investment holding company, provides financial services in Hong Kong and the People's Republic of China. The company operates through Consumer Finance, Private Credit, Mortgage Loans, Investment Management, and Group Management and Support segments. It offers unsecured loan to individuals and businesses through branches and online platforms; funding solutions to corporates, investment funds, and high net worth individuals; and first mortgage and second mortgage loans to property owners, as well as customized financing solutions to property investors. The company also engages in the public markets, alternative, and real estate investment activities. In addition, it offers secretarial, financial consultancy, nominee, loan guarantee, money lending, asset management, property investment, securities trading, and fund management services. The company was incorporated in 1969 and is headquartered in Causeway Bay, Hong Kong. Sun Hung Kai & Co. Limited is a subsidiary of AP Emerald Limited.
How the Company Makes MoneySun Hung Kai & Co. Limited generates revenue through several key streams. Primarily, the company earns money from its investment management services, where it charges management and performance fees on assets under management. Additionally, the company engages in proprietary trading and principal investments, seeking capital appreciation and returns on its own investment portfolio. The consumer finance segment also contributes significantly to the company's earnings through interest income from personal loans and other credit products. Strategic partnerships and joint ventures further enhance its revenue-generating capabilities by expanding its market reach and product offerings.

Sun Hung Kai & Co. Limited Financial Statement Overview

Summary
Sun Hung Kai & Co. Limited exhibits a mixed financial performance. While revenue has declined recently, profitability metrics have improved. The company's balance sheet reflects financial stability with low leverage and a strong equity foundation. Cash flow performance is particularly strong, demonstrating effective cash management and strong free cash flow generation. However, the decline in revenue poses a potential risk that should be monitored.
Income Statement
65
Positive
The company has shown volatile revenue trends, with recent declines in total revenue from 2023 to 2024. Gross profit margin remains strong at 100%, indicating effective cost management. However, the net profit margin improved to a positive 19% in 2024 after a loss in 2023, but the revenue growth rate is negative, showing a decrease in revenue by 9.8%. The EBIT margin stands at a solid 37.8%, reflecting operational efficiency.
Balance Sheet
70
Positive
The debt-to-equity ratio is 0.23, suggesting a conservative leverage approach. The equity ratio is strong at 56.7%, indicating a solid equity base relative to total assets. Return on equity (ROE) is moderate at 1.8% for 2024, showing modest profitability on equity.
Cash Flow
78
Positive
The company demonstrates strong cash flow management, with a free cash flow growth rate of 17.1% from 2023 to 2024. The operating cash flow to net income ratio is robust at 4.97, highlighting efficient conversion of earnings to cash. Additionally, the free cash flow to net income ratio is high at 4.92, indicating strong cash flow relative to net income.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
2.32B2.20B705.70M5.49B4.78B
Gross Profit
2.32B1.76B224.90M5.07B4.44B
EBIT
861.30M936.60M-368.60M3.29B2.82B
EBITDA
0.001.42B0.004.71B4.19B
Net Income Common Stockholders
377.70M-471.40M-1.18B2.81B2.55B
Balance SheetCash, Cash Equivalents and Short-Term Investments
4.33B6.46B5.73B5.86B7.25B
Total Assets
37.30B40.87B42.91B48.79B44.08B
Total Debt
4.88B15.18B15.98B18.64B16.93B
Net Debt
549.60M-6.46B10.25B12.78B9.68B
Total Liabilities
13.05B16.47B17.36B20.25B18.13B
Stockholders Equity
21.15B21.27B22.36B25.08B22.63B
Cash FlowFree Cash Flow
1.86B1.59B3.92B-1.53B1.60B
Operating Cash Flow
1.88B1.65B3.99B-1.47B1.73B
Investing Cash Flow
209.60M682.70M-121.20M-596.60M979.70M
Financing Cash Flow
-4.17B-1.75B-3.78B596.70M-1.23B

Sun Hung Kai & Co. Limited Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price3.08
Price Trends
50DMA
2.96
Positive
100DMA
2.84
Positive
200DMA
2.70
Positive
Market Momentum
MACD
0.02
Positive
RSI
43.73
Neutral
STOCH
24.07
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0086, the sentiment is Neutral. The current price of 3.08 is above the 20-day moving average (MA) of 3.06, above the 50-day MA of 2.96, and above the 200-day MA of 2.70, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 43.73 is Neutral, neither overbought nor oversold. The STOCH value of 24.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:0086.

Sun Hung Kai & Co. Limited Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
82
Outperform
£153.10B10.2810.86%3.37%-3.40%-7.51%
67
Neutral
€5.97B15.811.76%9.18%20.63%
64
Neutral
$12.77B9.787.84%78.83%12.06%-7.99%
$91.95B14.2216.75%3.83%
$47.48B9.4011.58%3.35%
$27.48B12.7811.23%4.36%
$10.74B22.211.64%6.22%
* Financial Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:0086
Sun Hung Kai & Co. Limited
3.00
0.77
34.71%
GB:HSBA
HSBC Holdings
866.90
243.86
39.14%
AAIGF
AIA Group
8.79
1.83
26.29%
BNKHF
BOC Hong Kong (Holdings)
4.36
1.44
49.32%
HSNGF
Hang Seng Bank
15.28
3.00
24.43%
SWRAF
Swire Pacific
8.70
0.46
5.58%

Sun Hung Kai & Co. Limited Corporate Events

Sun Hung Kai & Co. Limited Announces 2025 Annual General Meeting
Apr 10, 2025

Sun Hung Kai & Co. Limited has announced its Annual General Meeting to be held on May 27, 2025, in Hong Kong. The meeting will cover the adoption of financial statements, re-election of directors, re-appointment of auditors, and resolutions regarding the issuance of additional shares. These actions indicate the company’s ongoing commitment to maintaining robust governance and strategic growth, potentially impacting its market position and shareholder value.

Sun Hung Kai & Co. Announces Key Leadership Appointments
Mar 20, 2025

Sun Hung Kai & Co. Limited has announced key leadership changes effective from March 21, 2025. Antony James Edwards has been appointed as an Executive Director, bringing extensive experience in investment management and business development. William Thomas Royan joins as an Independent Non-Executive Director, while Wayne Robert Porritt takes over as chairman of the ESG Committee. These appointments are expected to strengthen the company’s governance and strategic direction, potentially enhancing its market positioning and stakeholder confidence.

Sun Hung Kai & Co. Limited Announces Board Composition and Committee Roles
Mar 20, 2025

Sun Hung Kai & Co. Limited has announced the composition of its Board of Directors, which includes a mix of executive, non-executive, and independent non-executive directors. The company has also detailed the membership of its six Board committees, highlighting the roles of each director within these committees. This announcement underscores the company’s commitment to robust governance and strategic oversight, which may enhance its industry positioning and provide clarity for stakeholders regarding leadership responsibilities.

Sun Hung Kai & Co. Limited Reports Robust 2024 Financial Performance Amid Strategic Growth
Mar 20, 2025

Sun Hung Kai & Co. Limited reported strong financial performance in 2024, driven by its strategic business transformation and growth in its Funds Management platform, Sun Hung Kai Capital Partners, which saw assets under management double to US$2.0 billion. The company’s disciplined approach in investment management and credit business solidified its market position, with notable gains in hedge funds and consumer finance, and a significant reduction in Medium-Term Note exposure, enhancing capital efficiency and strategic derisking.

Sun Hung Kai & Co. Limited Declares Second Interim Dividend
Mar 20, 2025

Sun Hung Kai & Co. Limited announced a second interim ordinary dividend of HKD 0.14 per share for the financial year ending December 31, 2024. The dividend will be paid on May 23, 2025, with a record date of May 9, 2025. This announcement reflects the company’s ongoing commitment to providing shareholder value and may enhance its attractiveness to investors.

Sun Hung Kai & Co. Limited Announces Positive Profit Turnaround for 2024
Mar 13, 2025

Sun Hung Kai & Co. Limited has announced a positive profit alert, indicating a significant turnaround in its financial performance for the year ended December 31, 2024. The company expects to report a consolidated profit of up to HK$400 million, contrasting with a loss of HK$471.4 million in 2023. This improvement is primarily due to net gains in financial instruments within its investment management business, although partially offset by reduced profits in its credit business due to a weak local economy and high interest rates.

Sun Hung Kai & Co. Limited Schedules Board Meeting for Financial Results and Dividend Decision
Mar 10, 2025

Sun Hung Kai & Co. Limited has announced that its board of directors will convene on March 20, 2025, to approve the company’s final results for the fiscal year ending December 31, 2024. The meeting will also consider the potential declaration of a dividend, which could impact shareholders and market positioning.

Sun Hung Kai & Co. Announces Change of Share Registrar
Mar 10, 2025

Sun Hung Kai & Co. Limited has announced a change in its share registrar, effective from March 14, 2025. The new registrar will be Tricor Investor Services Limited, located in Hong Kong. This change requires that applications for registration of transfer of shares be lodged with the new registrar from the effective date. The announcement indicates a procedural update for stakeholders, ensuring a smooth transition in share registration processes.

Sun Hung Kai & Co. Limited Subscribes to Pantheon Resources Bonds
Feb 21, 2025

Sun Hung Kai & Co. Limited has announced its decision to subscribe to US$30 million of senior convertible bonds issued by Pantheon Resources PLC, set to mature in March 2028. This transaction, classified as a discloseable transaction under the Hong Kong Stock Exchange Listing Rules, highlights the company’s strategic investment approach and may influence its financial position with a potential conversion into Pantheon shares.

Glossary
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.