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

• Market Cap: HK$8.39B
• Dividend Yield: 6.47%
• Average Volume (3M): 695.08K
• Price to Earnings (P/E): 7.1
• Beta (1Y): 0.59
• Revenue Growth: 28.71%
• EPS Growth: N/A
• Country: HK
• Employees: 978
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 0.47
• Shares Outstanding: 1,964,958,500
• 10 Day Avg. Volume: 654,167
• 30 Day Avg. Volume: 695,082
• PEG Ratio: -0.08
• Price to Book (P/B): 0.25
• Price to Sales (P/S): 2.30
• P/FCF Ratio: 2.86
• 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: 71 Outperform
• Price Target: HK$4.50 ▲(13.92% Upside)

The score is driven primarily by attractive valuation (low P/E and high dividend yield) and solid technical positioning (price above key moving averages with positive MACD). Financial performance is improving (return to profitability and strong cash generation) but is tempered by a sharp revenue decline and multi-year volatility.

Positive Factors

Cash Generation

Strong cash generation indicates robust earnings quality and provides the company with flexibility to invest in growth opportunities or return capital to shareholders.

Leverage Management

Improved leverage ratios enhance financial stability, reduce risk, and increase the company's ability to withstand economic downturns.

Strategic Investments

Strategic investments in large-scale asset management deals can drive long-term growth and diversification, enhancing the company's competitive position.

Negative Factors

Revenue Volatility

Significant revenue volatility undermines predictability and can hinder strategic planning, impacting long-term growth and stability.

Low Return on Equity

Low returns on equity indicate inefficient use of capital, which can limit growth potential and shareholder value creation over time.

Free Cash Flow Decline

A decline in free cash flow suggests potential challenges in maintaining operational efficiency and funding future investments without increasing debt.

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

Company Description

Sun 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 Money

Sun 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

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

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

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.90B	2.32B	2.20B	2.34B	6.98B	6.68B
Gross Profit	2.90B	2.32B	1.76B	1.86B	6.57B	6.34B
EBITDA	2.65B	0.00	1.42B	169.20M	4.71B	4.19B
Net Income	1.19B	377.70M	-471.40M	-1.53B	2.81B	2.55B
Balance Sheet
Total Assets	37.65B	37.30B	40.87B	42.91B	48.79B	44.08B
Cash, Cash Equivalents and Short-Term Investments	3.50B	4.33B	6.46B	5.73B	5.86B	7.25B
Total Debt	11.21B	11.84B	15.18B	15.98B	18.64B	16.93B
Total Liabilities	12.59B	13.05B	16.47B	17.36B	20.25B	18.13B
Stockholders Equity	22.00B	21.15B	21.27B	22.36B	25.08B	22.63B
Cash Flow
Free Cash Flow	405.50M	1.86B	1.59B	3.92B	-1.53B	1.60B
Operating Cash Flow	421.70M	1.88B	1.65B	3.99B	-1.47B	1.73B
Investing Cash Flow	681.00M	209.60M	871.10M	-121.20M	-596.60M	979.70M
Financing Cash Flow	-3.75B	-4.17B	-1.75B	-3.78B	596.70M	-1.23B

Sun Hung Kai & Co. Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3.95
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0086, the sentiment is Positive. The current price of 3.95 is below the 20-day moving average (MA) of 3.98, above the 50-day MA of 3.89, and above the 200-day MA of 3.51, indicating a bullish trend. The MACD of 0.09 indicates Negative momentum. The RSI at 77.08 is Negative, neither overbought nor oversold. The STOCH value of 95.24 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0086.

Sun Hung Kai & Co. Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0086	71 Outperform	HK$8.39B	7.07	5.71%	6.47%	28.71%	―
0900	71 Outperform	HK$3.04B	6.35	10.90%	6.92%	4.78%	24.02%
1905	71 Outperform	HK$6.42B	4.29	7.87%	11.28%	0.59%	-5.95%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
1601	64 Neutral	HK$1.39B	3.83	9.89%	7.43%	1.11%	3.98%
2003	58 Neutral	HK$1.26B	2.04	12.71%	9.77%	16.56%	110.71%

Sun Hung Kai & Co. Limited Corporate Events

Sun Hung Kai & Co. Adopts Alternative Public Float Threshold to Enhance Capital Management Flexibility

Sun Hung Kai & Co. Limited has elected to switch from relying on the Initial Prescribed Threshold to the Alternative Threshold under the amended Listing Rules governing minimum public float requirements, which take effect on 1 January 2026. The board believes this move will provide greater flexibility for capital management activities such as share repurchases, while the company currently exceeds the Alternative Threshold with a public float market value of about HK$1.91 billion and a public float percentage of approximately 25.06%, and it will continue to monitor and disclose its public float levels in its monthly returns and annual reports.

The most recent analyst rating on (HK:0086) stock is a Buy with a HK$4.50 price target. To see the full list of analyst forecasts on Sun Hung Kai & Co. Limited stock, see the HK:0086 Stock Forecast page.

Sun Hung Kai & Co. Commits Up to US$100 Million to Trian Partners Co-Investment Fund for Janus Henderson Deal

Sun Hung Kai & Co. Limited has committed up to US$100 million (about HK$778 million) via an indirect wholly owned subsidiary to a new co-investment fund managed by U.S. activist investor Trian Partners, which is being formed to participate in the acquisition of Janus Henderson Group, a New York-listed global asset manager with US$484 billion in assets under management. The investment, funded from SHK Group’s internal resources, constitutes a discloseable transaction for both SHK and its indirect parent Allied Group Limited under Hong Kong listing rules, triggering reporting and announcement requirements but not shareholder approval, and underlines SHK’s strategy of using structured co-investments to access large-scale international asset management deals while staying within mid-sized transaction thresholds.

Sun Hung Kai & Co. Signs New Three-Year Connected Property Lease Frameworks with Allied Group and Art View

Sun Hung Kai & Co. Limited has entered into two new master lease agreements with its controlling shareholder Allied Group Limited (AGL) and AGL-associated entity Art View, allowing group members to enter into, renew or amend tenancies, sub-tenancies, leases, sub-leases and licences for properties owned by these related parties from 1 January 2026 to 31 December 2028, subject to predetermined annual caps. As AGL owns approximately 73.51% of the company and indirectly holds 50% of Art View, both agreements are classified as continuing connected transactions under Hong Kong’s Listing Rules; the aggregated leasing arrangements will be subject to announcement, annual reporting and review requirements, but will be exempt from circular, independent financial advice and shareholders’ approval, signalling an ongoing, regulated property usage framework within the group that formalises intra-group leasing while limiting additional compliance burdens.

Sun Hung Kai & Co. Renews Management Services Sharing Agreement With Majority Shareholder AGL

Sun Hung Kai & Co. Limited has renewed its sharing of management services arrangement with its majority shareholder, Allied Group Limited, by entering into a new agreement covering the period from 1 January 2026 to 31 December 2028. Under this agreement, the company will reimburse AGL on a cost basis for a portion of the remuneration of designated management staff who devote time to Sun Hung Kai & Co.’s affairs, with chargeable percentages generally ranging from 15% to 30% according to estimated time allocation. The transaction is classified as a continuing connected transaction under Hong Kong listing rules due to AGL’s 73.51% indirect holding, triggering reporting, announcement and annual review requirements while remaining exempt from independent shareholders’ approval, thereby formalising ongoing intra-group service sharing while maintaining regulatory compliance.