Cosmos Machinery Enterprises Limited (0118) AI Stock Analysis

• Market Cap: HK$161.18M
• Dividend Yield: N/A
• Average Volume (3M): 18.67K
• Price to Earnings (P/E): 17.3
• Beta (1Y): <0.01
• Revenue Growth: -9.32%
• EPS Growth: N/A
• Country: HK
• Employees: 1,743
• Sector: Industrials
• Sector Strength: 72
• Industry: Conglomerates
• EPS (TTM): <0.01
• Shares Outstanding: 861,930,660
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 18,666
• PEG Ratio: -0.19
• Price to Book (P/B): 0.13
• Price to Sales (P/S): 0.09
• P/FCF Ratio: -3.05
• 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: 50 Neutral
• Price Target: HK$0.19 ▼(-22.08% Downside)

The score is held back primarily by weakening operating performance and a 2024 swing to negative operating/free cash flow, despite an improving, low-leverage balance sheet. Technical indicators are broadly neutral, and valuation (P/E ~21.9) looks only fair given thin margins and no provided dividend yield support.

Positive Factors

Conservative Leverage

The steady decline in leverage to roughly 0.10 provides durable balance-sheet flexibility. Low net debt reduces refinancing and solvency risk across cycles, enabling the company to absorb demand volatility, fund working capital or opportunistic investments without compromising solvency.

Improving Gross Margin

An improvement in gross margin indicates stronger pricing power or better cost control at the core operating level. If sustained, this raises the structural floor for profitability, aiding margin recovery even if revenue stabilizes rather than grows, and supports longer-term earnings quality.

Historical Cash Generation Ability

Prior multi-year strong cash generation demonstrates the business can convert earnings into cash under normal conditions. That historical track record implies operational levers exist to restore cash conversion, supporting medium-term liquidity planning and potential reinvestment when operating trends improve.

Negative Factors

Sustained Revenue Decline

Multi-year top-line contraction undermines scale economics and competitive positioning. Persistent revenue declines reduce operating leverage, make fixed costs harder to absorb, and constrain the company’s ability to invest in product or market initiatives, limiting recovery prospects over the medium term.

Very Thin Profitability

Extremely low net margins and near-zero ROE signal the company struggles to earn adequate returns on capital. This restricts internal reinvestment, reduces resilience to cost shocks, and makes it difficult to fund growth or reward shareholders sustainably without meaningful operational improvement.

Negative Operating & Free Cash Flow

A swing to negative operating and free cash flow raises medium-term funding and working-capital risk despite low leverage. Persistent cash outflow could force external financing, asset sales, or cutbacks in investment, constraining strategic flexibility and increasing vulnerability if earnings do not recover.

Cosmos Machinery Enterprises Limited Business Overview & Revenue Model

Company Description

Cosmos Machinery Enterprises Limited, an investment holding company, manufactures and sells machineries in Hong Kong, Mainland China, other Asia-Pacific countries, North America, and Europe. The company operates through four segments: Trading of Industrial Consumables, Processing and Manufacturing of Plastic Products, Manufacturing of Machinery, and Processing and Trading of Printed Circuit Boards. Its machinery products include two-platen injection molding, servo-driven injection molding, all-electric high precision injection molding, special purpose injection molding, multi-material injection molding, rubber injection, extrusion line, hydraulic press, CNC turret punching, CNC brake press, and CNC shearing machines. The company's plastic processing products comprise aseptic food packaging products and tableware, IML products, plastic cutlery and containers, plastic mannequins, plastic spare parts for washing machines and automobiles, high precision figurines, and various other plastic spare parts. It also trades in spring steel wires and special alloy materials, screws and fasteners, abrasive products, electric and pneumatic tools, production facility accessories, hydraulic motors and pumps, stepping motors, servo motors, cooling fans, 3 phase induction motors, frequency inverters, vision inspection and illumination systems, hydraulic and power presses, CNC machines and machining centers, and CNC wire-cut EDM and EDM machines. In addition, the company provides printed circuit boards, CNC electrical discharged machines, CNC brass and molybdenum wire-cut machines, EDM, and drill EDM machines. Further, it offers various services comprising consultation and implementation of ERP and CRM systems, system integration, information technology training, maintenance of small computers, development of software and Websites, and information technology contract services. Cosmos Machinery Enterprises Limited was founded in 1958 and is headquartered in Cheung Sha Wan, Hong Kong.

How the Company Makes Money

Cosmos Machinery Enterprises Limited generates revenue through multiple streams, primarily by selling its machinery and equipment to various industries. The company's core revenue comes from the direct sale of machinery, including injection and blow molding machines, to manufacturers in sectors like plastics and packaging. Additionally, Cosmos earns income through after-sales services, which include maintenance, repair, and spare parts supply, ensuring ongoing customer relationships and recurring revenue. The company also capitalizes on strategic partnerships with global suppliers and distributors, enhancing its market reach and product offerings. These collaborations allow Cosmos to provide integrated solutions, which can command higher pricing and foster customer loyalty, ultimately contributing to its financial performance.

Cosmos Machinery Enterprises Limited Financial Statement Overview

Summary

Mixed fundamentals: a strong point is the conservative, improving leverage profile (debt-to-equity ~0.10) supporting balance-sheet flexibility. However, multi-year revenue declines, very thin profitability (~0.4% net margin in 2024), and a sharp swing to negative operating and free cash flow in 2024 weaken overall financial performance.

Income Statement

Revenue has been shrinking for several years (down 8.9% in 2024 after declines in 2023 and 2022), pointing to a weaker top-line trajectory. Profitability has also compressed meaningfully versus 2020–2021: 2024 net margin was very thin (~0.4%) and operating profitability remained low despite a return to a small profit after a loss in 2023. A positive is that gross margin improved in 2024 versus 2023, suggesting some pricing/cost discipline, but overall earnings quality and growth remain challenged.

Balance Sheet

Leverage looks conservative and improving: debt-to-equity has fallen steadily to ~0.10 in 2024 from ~0.36 in 2019, providing balance-sheet flexibility. Equity remains substantial relative to the asset base, which helps resilience in a cyclical environment. The main weakness is low shareholder returns, with return on equity near breakeven in 2024 (~0.6%) and negative in 2023, indicating the company is not currently generating strong profits from its capital base.

Cash Flow

Cash generation weakened materially in 2024, with negative operating cash flow and negative free cash flow, a sharp reversal from strong positive levels in 2022–2023. This raises near-term funding/working-capital risk, especially alongside already thin profitability. Positively, the company has demonstrated an ability to produce strong cash flow in prior years, but the latest year shows elevated volatility and a clear deterioration in cash conversion.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.86B	1.87B	2.18B	2.34B	3.08B	2.43B
Gross Profit	358.72M	344.92M	369.67M	372.30M	544.49M	407.98M
EBITDA	79.33M	73.07M	37.64M	118.28M	203.12M	130.85M
Net Income	9.31M	7.90M	-43.80M	24.41M	89.73M	19.58M
Balance Sheet
Total Assets	2.31B	2.17B	2.46B	2.63B	2.97B	2.83B
Cash, Cash Equivalents and Short-Term Investments	470.52M	519.03M	666.10M	570.16M	451.41M	493.73M
Total Debt	151.91M	126.96M	243.52M	268.30M	352.64M	378.18M
Total Liabilities	982.11M	861.67M	1.03B	1.09B	1.33B	1.33B
Stockholders Equity	1.26B	1.24B	1.27B	1.32B	1.41B	1.27B
Cash Flow
Free Cash Flow	-89.45M	-52.25M	93.94M	221.75M	-3.10M	230.15M
Operating Cash Flow	-56.09M	-15.81M	164.77M	254.29M	36.66M	256.50M
Investing Cash Flow	-40.27M	57.36M	-15.85M	3.92M	-80.88M	-19.27M
Financing Cash Flow	22.46M	-187.06M	-23.53M	-98.43M	-57.83M	-78.35M

Cosmos Machinery Enterprises Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.24
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Positive
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0118, the sentiment is Negative. The current price of 0.24 is above the 20-day moving average (MA) of 0.20, above the 50-day MA of 0.22, and above the 200-day MA of 0.22, indicating a bearish trend. The MACD of -0.01 indicates Negative momentum. The RSI at 26.86 is Positive, neither overbought nor oversold. The STOCH value of 41.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:0118.

Cosmos Machinery Enterprises Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
0118	50 Neutral	HK$161.18M	17.31	0.53%	―	-9.32%	―
0474	50 Neutral	HK$885.81M	-2.21	-63.64%	―	-64.04%	1.66%
0862	48 Neutral	HK$317.86M	-5.59	-33.36%	―	-25.59%	0.69%
8269	46 Neutral	HK$405.28M	-119.74	-41.21%	―	8.75%	87.90%
1063	45 Neutral	HK$152.32M	10.42	7.00%	―	9.69%	-33.79%