Yangtzekiang Garment Co. Ltd. (0294) AI Stock Analysis

• Market Cap: HK$177.80M
• Dividend Yield: 2.33%
• Average Volume (3M): 45.07K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.08
• Revenue Growth: -20.43%
• EPS Growth: -24.29%
• Country: HK
• Employees: 247
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Manufacturers
• EPS (TTM): -0.14
• Shares Outstanding: 206,747,680
• 10 Day Avg. Volume: 45,401
• 30 Day Avg. Volume: 45,067
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• 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: HK$1.00
• Price Target Upside: 16.28% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 45 Neutral
• Price Target: HK$1.00 ▲(16.28% Upside)

Yangtzekiang Garment Co. Ltd. has significant financial challenges, with declining revenues and persistent losses impacting profitability. Technical indicators suggest the stock is oversold, but weak momentum and negative valuation metrics indicate limited attractiveness. The strong balance sheet provides some stability, but operational improvements are necessary for a positive outlook.

Yangtzekiang Garment Co. Ltd. Business Overview & Revenue Model

Company Description

Yangtzekiang Garment Limited engages in the manufacture and sale of garment and textile products. It operates through three segments: Manufacture and Sale of Garments and Textiles; Interests in Joint Ventures; and Property Leasing. The company offers men's and ladies' shirts, trousers, shorts, polo shirts, T-shirts, jackets, knitted outerwear, etc. It is also involved in the manufacture and sale of textile yarn products, as well as knitting and dyeing fabrics. In addition, the company provides garment processing services; and leases commercial and industrial premises. It has operations in the United Kingdom, Italy, Spain, Germany, and other European countries; Mainland China; the United States and Canada; and internationally. The company was formerly known as Yangtzekiang Garment Mfg. Co., Ltd. and changed its name to Yangtzekiang Garment Limited in 2005. Yangtzekiang Garment Limited was founded in 1949 and is headquartered in San Po Kong, Hong Kong.

How the Company Makes Money

Yangtzekiang Garment Co. Ltd. generates revenue primarily through the manufacturing and sale of garments to international retailers and brands. The company operates on a business-to-business (B2B) model, where it partners with well-known fashion labels and distributors, supplying them with finished apparel products. Key revenue streams include bulk orders and long-term contracts with major retailers, which provide a steady income flow. Additionally, Yangtzekiang may also earn from custom garment production and private label services, allowing clients to brand the products as their own. The company's commitment to quality, efficient production processes, and strategic partnerships with global fashion brands significantly contribute to its financial performance.

Yangtzekiang Garment Co. Ltd. Financial Statement Overview

Summary

Yangtzekiang Garment Co. Ltd. faces financial challenges with declining revenue, profitability, and cash flow. Despite a strong balance sheet with low debt and high equity, the company struggles with negative cash flows and profitability, indicating operational inefficiencies and market pressures. The financial health is stable due to the low leverage, but strategic improvements are needed to enhance operating performance and financial outcomes.

Income Statement

Yangtzekiang Garment Co. Ltd. experienced a significant decline in revenue and profitability over the last year. The gross profit margin dropped to 18.93% from 19.60% the previous year, and the net profit margin is negative at -20.55%, indicating substantial losses. The revenue growth rate is negative at -35.94%, which raises concerns about declining sales and market share. Additionally, EBIT and EBITDA margins are weak, reflecting operational inefficiencies and high costs relative to revenue.

Balance Sheet

The company maintains a strong balance sheet with a very low debt-to-equity ratio of 0.0002, indicating minimal leverage and financial risk. The equity ratio is high at 93.51%, showcasing robust equity financing. However, the return on equity is negative at -4.71% due to net losses, highlighting challenges in generating shareholder returns despite a solid asset base.

Cash Flow

The cash flow situation shows deterioration, with a negative free cash flow and a significant drop in operating cash flow by -109.43% from the previous year. The operating cash flow to net income ratio is negative, indicating insufficient cash generation from operations to cover net losses. While the company has a positive investing cash flow, primarily from asset sales, it is not enough to offset the negative operating cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	211.45M	186.43M	234.30M	365.76M	390.45M	420.48M
Gross Profit	36.91M	34.41M	44.36M	71.70M	60.63M	71.36M
EBITDA	-15.80M	-62.46M	-8.27M	-15.37M	-4.08M	-19.93M
Net Income	-61.58M	-59.88M	-48.17M	-23.25M	30.66M	-27.82M
Balance Sheet
Total Assets	1.09B	1.02B	1.09B	1.19B	1.30B	1.23B
Cash, Cash Equivalents and Short-Term Investments	313.21M	332.14M	304.50M	306.17M	235.47M	266.08M
Total Debt	118.00K	64.00K	164.00K	74.00K	535.00K	7.10M
Total Liabilities	87.06M	63.99M	71.27M	85.24M	127.32M	113.18M
Stockholders Equity	1.00B	960.28M	1.02B	1.11B	1.17B	1.12B
Cash Flow
Free Cash Flow	-2.31M	1.78M	-6.95M	65.47M	-24.73M	-6.78M
Operating Cash Flow	-2.16M	2.39M	-6.80M	72.15M	-18.31M	-3.74M
Investing Cash Flow	114.34M	-63.21M	24.53M	-121.31M	-8.23M	3.48M
Financing Cash Flow	-5.16M	-4.99M	-5.10M	-5.99M	-4.98M	-7.16M

Yangtzekiang Garment Co. Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.86
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0294, the sentiment is Negative. The current price of 0.86 is below the 20-day moving average (MA) of 0.97, below the 50-day MA of 0.95, and below the 200-day MA of 0.97, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 27.74 is Positive, neither overbought nor oversold. The STOCH value of 9.64 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:0294.

Yangtzekiang Garment Co. Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1433	64 Neutral	HK$176.00M	3.20	23.94%	8.24%	14.30%	125.41%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
0311	51 Neutral	€248.19M	―	-14.53%	―	0.34%	-47.98%
0294	45 Neutral	HK$177.80M	―	-6.04%	2.33%	-20.43%	-24.29%
1388	44 Neutral	HK$166.85M	―	-18.57%	―	-6.47%	-118.56%
3398	40 Underperform	HK$184.78M	―	-25.27%	―	4.98%	-3.47%

Yangtzekiang Garment Co. Ltd. Corporate Events

Yangtzekiang Garment Co. Ltd. Announces Supplemental Information on Connected Transactions

Yangtzekiang Garment Co. Ltd. has issued a supplemental announcement to its Annual Report 2023/24, detailing connected transactions with YGM Trading Group. These transactions include a Garment Master Agreement for selling garment products and a Licence Agreement for leasing warehouse and office space. The company has complied with Chapter 14A of the Listing Rules for these transactions, which are significant due to shared controlling shareholders between Yangtzekiang and YGM Trading.