Crocodile Garments Limited (0122) AI Stock Analysis

• Market Cap: HK$152.17M
• Dividend Yield: N/A
• Average Volume (3M): 40.53K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.06
• Revenue Growth: 47.69%
• EPS Growth: -6.36%
• Country: HK
• Employees: 105
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Manufacturers
• EPS (TTM): -0.16
• Shares Outstanding: 103,517,510
• 10 Day Avg. Volume: 21,875
• 30 Day Avg. Volume: 40,534
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.10
• Price to Sales (P/S): 1.02
• P/FCF Ratio: -1.83
• 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: 44 Neutral
• Price Target: HK$1.50 ▼(-22.28% Downside)
• Action: Reiterated Date: 02/24/26
• Date: Action: Reiterated 02/24/26

The score is primarily held back by weak financial performance—ongoing net losses and negative operating/free cash flow in the last two years outweigh strong gross margins and moderate leverage. Technical indicators are broadly neutral with only mild near-term support, while valuation remains unattractive because the company is unprofitable and no dividend yield data is available.

Positive Factors

High gross margins / pricing power

Sustained gross margins near 70–84% indicate durable pricing power and cost structure advantage in apparel manufacturing. This high margin base provides structural cushion versus input cost swings and supports the potential to invest in marketing or quality improvements to rebuild profitable scale.

EBITDA turned positive in 2025

A shift to positive EBITDA demonstrates improving operating performance and that prior restructuring or cost controls are taking effect. If sustained, this operational leverage can convert high gross profit into operating profitability and reduce reliance on external financing over the medium term.

Manageable leverage and stable equity

Moderate debt levels and stable equity provide financial flexibility and lower near-term insolvency risk relative to highly levered peers. This balance sheet profile supports the company's ability to fund working capital or targeted investments while navigating a multi-quarter earnings recovery.

Negative Factors

Persistent net losses & weak cash flow

Two consecutive years of negative operating and free cash flow and recurring net losses weaken internal funding, increase refinancing or dilution risk, and constrain the firm's ability to invest in growth. Continued cash burn would force external capital or asset sales, limiting strategic optionality.

Volatile and declining revenue trend

Material revenue volatility and a ~25% decline in 2025 reduce scale benefits and make fixed-cost absorption harder. Structural top-line weakness undermines margin conversion and means any margin gains are fragile unless revenue growth normalizes sustainably.

Consistently negative ROE; erosion risk

Persistent negative ROE signals that the company is destroying shareholder capital rather than generating returns. Over months, this creates pressure for recapitalization, limits reinvestment capacity, and raises the risk that equity value and reserves are eroded if profitability isn’t restored.

Crocodile Garments Limited Business Overview & Revenue Model

Company Description

Crocodile Garments Limited, together with its subsidiaries, engages in the manufacture, retail, and wholesale of garments and related accessories in Hong Kong and the People's Republic of China. The company operates in three segments: Garment and Related Accessories Business, Property Investment and Letting Business, and securities trading. It offers menswear, ladies wear, children's clothing, including shirts, ties, tees and polos, sweatshirts and knitwear, outerwear, pants, and underwear; and accessories, such as bags and wallets, belts, and umbrellas, as well as distributes LACOSTE branded apparel. As of July 31, 2021, the company operated 11 shops under the Crocodile brand and 5 shops under the Lacoste brand in Hong Kong and Macau, as well as 13 shops, including 7 self-operated and 6 franchisee operated shops in Mainland China. Crocodile Garments Limited also sells its products through CROCODILE online shop and other e-channels. In addition, it is involved in the property investment and letting, and trading of securities. The company was is based in Kwun Tong, Hong Kong. Crocodile Garments Limited operates as a subsidiary of Rich Promise Limited.

How the Company Makes Money

Crocodile Garments Limited generates revenue through the sale of apparel and accessories via its retail outlets and franchise network. The company earns income from direct sales in its branded stores as well as royalty fees from franchisees who operate under the Crocodile brand. Additionally, the company may engage in wholesale operations, distributing their products to other retailers. Key factors contributing to its earnings include strategic location of retail outlets, brand recognition, and a focus on fashion trends that appeal to their target market. Partnerships with suppliers and designers also play a crucial role in maintaining quality and innovation in their product offerings.

Crocodile Garments Limited Financial Statement Overview

Summary

Despite consistently strong gross margins, the company remains loss-making with mostly negative EBIT and weak recent cash generation (negative operating cash flow and free cash flow in 2024–2025). Leverage appears manageable, but persistently negative ROE and uneven cash flows keep overall financial quality low, with only a modest positive sign from EBITDA turning positive in 2025.

Income Statement

Revenue has been volatile and remains below prior peaks, with 2025 down ~25% year over year after a rebound in 2024. Gross margins are consistently strong (roughly 70–84%), suggesting pricing power/brand strength, but operating profitability is weak: EBIT is negative across most periods and net income is loss-making every year shown (with 2025 net margin around -39%, improving from very deep losses in 2020–2023). EBITDA turned positive in 2025 after multiple negative years, but the business still hasn’t translated high gross profit into sustainable bottom-line profitability.

Balance Sheet

Leverage looks manageable for the sector, with debt-to-equity generally around ~0.39–0.57 and equity holding relatively steady over time. However, returns on equity are consistently negative (reflecting persistent losses), which is a key weakness and implies ongoing erosion risk if losses continue. Asset base is stable but slightly drifting down from 2022–2025, pointing to limited balance sheet-driven growth.

Cash Flow

Cash generation is inconsistent and recently weak: operating cash flow is negative in 2025 and 2024, after being positive in 2023 and strong in 2021. Free cash flow is also negative in 2025 and 2024, indicating the business has not been self-funding in the last two years. While free cash flow improved versus the prior year in 2025 (growth positive off a negative base), the pattern of cash burn alongside accounting losses raises funding and durability concerns.

Breakdown	Jun 2025	Jun 2024	Jul 2023	Jul 2022	Jul 2021
Income Statement
Total Revenue	138.32M	95.33M	86.88M	103.29M	112.00M
Gross Profit	100.48M	76.55M	72.83M	74.85M	81.44M
EBITDA	16.72M	-18.86M	-56.52M	-56.96M	21.46M
Net Income	-53.80M	-33.84M	-108.79M	-78.39M	-1.93M
Balance Sheet
Total Assets	2.16B	2.23B	2.34B	2.42B	2.20B
Cash, Cash Equivalents and Short-Term Investments	218.61M	240.08M	351.30M	444.68M	208.62M
Total Debt	691.73M	711.77M	771.18M	857.40M	593.76M
Total Liabilities	746.17M	787.33M	862.29M	921.96M	669.10M
Stockholders Equity	1.42B	1.44B	1.48B	1.49B	1.53B
Cash Flow
Free Cash Flow	-77.44M	-39.09M	864.00K	-27.96M	39.91M
Operating Cash Flow	-74.16M	-36.37M	14.17M	-22.28M	40.95M
Investing Cash Flow	8.28M	6.38M	-4.21M	266.00K	17.52M
Financing Cash Flow	-42.98M	-79.41M	-57.92M	259.39M	-104.88M

Crocodile Garments Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.93
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0122, the sentiment is Positive. The current price of 1.93 is above the 20-day moving average (MA) of 1.46, above the 50-day MA of 1.47, and above the 200-day MA of 1.73, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 51.62 is Neutral, neither overbought nor oversold. The STOCH value of 57.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0122.

Crocodile Garments Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1433	70 Outperform	HK$192.00M	1.58	23.94%	7.89%	14.30%	125.41%
1749	70 Outperform	HK$124.06M	2.47	11.95%	12.12%	-7.88%	-4.49%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
0333	58 Neutral	HK$81.28M	-2.45	-8.92%	―	7.57%	-1383.56%
0294	52 Neutral	HK$163.33M	-0.96	-8.49%	2.08%	-6.96%	-32.24%
0518	46 Neutral	HK$93.82M	-3.11	-0.71%	2.59%	3.84%	83.42%
0122	44 Neutral	HK$152.17M	-3.03	―	―	47.69%	-6.36%

Crocodile Garments Limited Corporate Events

Crocodile Garments Limited Announces Results of Rights Issue

Crocodile Garments Limited announced the results of its rights issue, which offered one rights share for every two existing shares on a non-underwritten basis. The rights issue was under-subscribed, with approximately 91.33% of the total rights shares subscribed, resulting in a shortfall of 3,081,152 shares. The company raised approximately HK$46.98 million in net proceeds, which will be used as outlined in their prospectus.