Four Seas Mercantile Holdings Limited (0374) AI Stock Analysis

• Market Cap: HK$954.05M
• Dividend Yield: 3.78%
• Average Volume (3M): 1.27K
• Price to Earnings (P/E): 94.7
• Beta (1Y): 0.02
• Revenue Growth: -7.00%
• EPS Growth: -70.95%
• Country: HK
• Employees: 2,700
• Sector: Consumer Defensive
• Sector Strength: 49
• Industry: Food Distribution
• EPS (TTM): -0.03
• Shares Outstanding: 380,099,640
• 10 Day Avg. Volume: 600
• 30 Day Avg. Volume: 1,266
• 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$2.50
• Price Target Upside: -0.40% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 46 Neutral
• Price Target: HK$2.50 ▼(-0.40% Downside)

The overall stock score is primarily impacted by the company's financial challenges, including declining revenues and profitability, increased leverage, and cash flow issues. Technical analysis also indicates a bearish trend with weak market momentum. The high P/E ratio suggests overvaluation, though the dividend yield offers some income potential.

Four Seas Mercantile Holdings Limited Business Overview & Revenue Model

Company Description

Four Seas Mercantile Holdings Limited, an investment holding company, manufactures and trades in snack foods, confectionery, beverages, frozen foods, noodles, and ham and ham-related products in Hong Kong and Mainland China. The company also offers ice creams, eggs, tofu, rice, snacks, milk powder, health foods, plum liqueurs, sauces, cakes, candies, seaweed products, and hams and sausages. In addition, it engages in the food materials trading, e-commerce retailing of confectionery and food products, processing of chestnuts, property holding, and advertising agency businesses; and provides lunch box and tuck shop services, as well as transportation services. The company's retail business covers a specialty store, which includes Okashi Land that offers Japanese gift boxes, snacks, and confectioneries; YOKU MOKU cookie stores; and Japan Ice-cream House. Its catering business includes Kung Tak Lam, Shanghai vegetarian cuisine; Sushiyoshi, a Michelin restaurant; Shiki Etsu, a Japanese restaurant; Panxi Restaurant; QJIKI, a fish-cake brand; and Sushi Oh. The company offers its products through a distribution network that covers department stores, supermarkets, convenience stores, fast food restaurants, retailers, restaurants, bars, hotels, and airlines. Four Seas Mercantile Holdings Limited was founded in 1971 and is based in Kowloon Bay, Hong Kong.

How the Company Makes Money

Four Seas Mercantile Holdings Limited generates revenue through multiple streams that include the direct sale of food and beverage products to retailers and consumers, wholesale distribution to food service operators, and export of goods to international markets. The company benefits from economies of scale in its manufacturing processes, which allows it to maintain competitive pricing. Significant partnerships with major retailers and food distributors enhance its market reach and visibility. Additionally, the logistics services provided by the company enable it to optimize supply chain efficiency, further increasing profitability. Seasonal and promotional sales, along with a focus on product innovation, contribute to its financial performance.

Four Seas Mercantile Holdings Limited Financial Statement Overview

Summary

Four Seas Mercantile Holdings Limited is facing financial challenges, with declining revenues and profitability. The balance sheet shows increased leverage, which could be risky if not managed effectively. Cash flow issues are evident, with negative free cash flow growth and low conversion of earnings to cash. The company needs to address these issues to improve its financial health.

Income Statement

The company has experienced declining revenue over the past few years, with a significant drop in the most recent year. Gross profit margin has been relatively stable, but net profit margin is very low, indicating challenges in converting revenue into profit. EBIT and EBITDA margins are modest, reflecting limited operational efficiency.

Balance Sheet

The debt-to-equity ratio has increased, indicating higher leverage, which could pose a risk if not managed properly. Return on equity is low, suggesting limited profitability from shareholders' investments. The equity ratio is stable, showing a balanced asset structure.

Cash Flow

The company has faced a significant decline in free cash flow, with negative growth in the most recent period. Operating cash flow to net income ratio is low, indicating challenges in converting earnings into cash. Free cash flow to net income ratio is negative, highlighting cash flow issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.66B	3.63B	3.90B	4.15B	4.73B	4.58B
Gross Profit	865.88M	868.28M	912.19M	879.31M	937.56M	878.50M
EBITDA	218.18M	297.95M	297.55M	255.74M	306.07M	310.33M
Net Income	24.85M	10.16M	34.66M	40.73M	12.63M	30.13M
Balance Sheet
Total Assets	2.94B	3.17B	2.93B	3.24B	3.35B	3.56B
Cash, Cash Equivalents and Short-Term Investments	649.24M	715.59M	684.55M	787.24M	658.06M	616.41M
Total Debt	1.19B	1.47B	1.15B	1.36B	1.33B	1.50B
Total Liabilities	1.69B	1.95B	1.68B	1.94B	1.98B	2.18B
Stockholders Equity	1.23B	1.20B	1.22B	1.28B	1.34B	1.38B
Cash Flow
Free Cash Flow	203.05M	-102.20M	283.31M	253.03M	265.95M	120.32M
Operating Cash Flow	256.56M	168.91M	338.07M	299.25M	323.77M	188.80M
Investing Cash Flow	-129.81M	-277.65M	-66.76M	-45.33M	-43.21M	306.28M
Financing Cash Flow	-183.30M	115.11M	-363.76M	-109.78M	-244.97M	-434.56M

Four Seas Mercantile Holdings Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.51
• 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:0374, the sentiment is Negative. The current price of 2.51 is below the 20-day moving average (MA) of 2.58, below the 50-day MA of 2.59, and below the 200-day MA of 2.57, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 9.75 is Positive, neither overbought nor oversold. The STOCH value of 5.00 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:0374.

Four Seas Mercantile Holdings Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1587	71 Outperform	HK$428.40M	9.35	8.56%	3.57%	3.24%	47.81%
1705	64 Neutral	HK$178.00M	10.00	11.39%	12.36%	-3.08%	-47.02%
Sector *	63 Neutral	$20.44B	14.73	-2.94%	3.07%	2.04%	-6.12%
8413	62 Neutral	HK$122.01M	112.22	1.07%	―	3.44%	-43.75%
0677	54 Neutral	HK$611.07M	29.49	-1.12%	6.67%	0.32%	-113.51%
0374	46 Neutral	HK$954.05M	94.72	0.84%	3.78%	-7.00%	-70.95%
8491	40 Neutral	HK$195.32M	―	-14.15%	―	-2.25%	58.33%

Four Seas Mercantile Holdings Limited Corporate Events

Four Seas Mercantile and HK Food Investment Enter New Supply Agreement

Four Seas Mercantile Holdings Limited and Hong Kong Food Investment Holdings Limited have entered into a 2025 Master Supply and Services Agreement, effective from April 1, 2025, to March 31, 2028. This agreement outlines the mutual supply of frozen meat, pre-packed food, and beverage products, alongside food processing services. The transactions are classified as connected transactions due to the substantial shareholding relationships between the companies, but they are exempt from independent shareholders’ approval under the Listing Rules. The pricing for these transactions will be based on market prices or previous procurement averages, ensuring terms are no less favorable than those available from independent third parties.