Four Seas Mercantile Holdings Limited (0374) AI Stock Analysis

• Market Cap: HK$988.32M
• Dividend Yield: 4.62%
• Average Volume (3M): 0.00
• Price to Earnings (P/E): 40.2
• Beta (1Y): >-0.01
• Revenue Growth: -8.35%
• EPS Growth: 96.66%
• Country: HK
• Employees: 2,700
• Sector: Consumer Cyclical
• Sector Strength: 57
• Industry: Food Distribution
• EPS (TTM): 0.05
• Shares Outstanding: 380,123,630
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 0
• PEG Ratio: 0.11
• Price to Book (P/B): 0.80
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 4.04
• 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

• Rating: 64 Neutral
• Price Target: ―

Four Seas Mercantile Holdings Limited demonstrates strong financial stability with solid cash flow and a robust balance sheet, which helps mitigate the risk of declining revenue. While technical indicators show positive price momentum, the absence of detailed trend indicators limits the clarity of this assessment. Valuation metrics indicate a high P/E ratio, suggesting the stock may be overvalued, although its dividend yield provides some compensation. Overall, the stock is stable but not without risks, particularly concerning revenue trends.

Four Seas Mercantile Holdings Limited Business Overview & Revenue Model

Company Description

Four Seas Mercantile Holdings Limited (0374) is a Hong Kong-based company engaged in the import, marketing, and distribution of a wide range of food products. The company primarily operates in the food distribution and retail sectors, offering an extensive portfolio that includes snacks, beverages, dairy products, and frozen foods. Four Seas Mercantile is known for its diverse product offerings and has established a significant presence in Hong Kong's food industry.

How the Company Makes Money

Four Seas Mercantile Holdings Limited generates revenue through the import and distribution of food products. The company's key revenue streams include wholesale distribution to supermarkets, convenience stores, and other retail outlets. They also earn income from their own retail operations, which involve direct sales to consumers. Significant partnerships with international food brands allow them to offer exclusive and diverse product lines, enhancing their market presence. The company's earnings are influenced by factors such as consumer preferences, brand partnerships, and the efficiency of their supply chain operations.

Four Seas Mercantile Holdings Limited Financial Statement Overview

Summary

Four Seas Mercantile Holdings Limited shows a well-rounded financial profile with solid cash flow and a strong balance sheet, offsetting the concerns of declining revenue. The company's operational efficiency is improving, as evidenced by the rising EBIT and EBITDA margins. While revenue contraction is a risk, effective cost management and cash flow generation provide stability and potential for future growth.

Income Statement

The company's income statement shows mixed results. Gross profit margin is stable, but revenue has been declining annually, with a decrease from 4,729,976,000 HKD in 2022 to 3,898,222,000 HKD in 2024. Net profit margin has slightly improved to 0.89% in 2024. Despite decreasing revenue, EBIT and EBITDA margins improved, indicating better operational efficiency. However, the overall revenue decline poses a concern for growth.

Balance Sheet

The balance sheet reveals a strong equity position, with an equity ratio of 41.79% in 2024, indicating a well-capitalized structure. The debt-to-equity ratio is at 0.94, showing a manageable level of leverage. Return on equity has shown improvement but remains modest at 2.83%. The company maintains a solid cash position, supporting its financial stability, although the decrease in total assets is noteworthy.

Cash Flow

Cash flow metrics are robust, with a strong free cash flow growth rate of 11.99% in 2024. The operating cash flow to net income ratio is high at 9.75, reflecting efficient cash conversion. Free cash flow to net income ratio is also favorable at 8.17, indicating healthy cash flow relative to profits. The company demonstrates strong cash generation capabilities, enhancing its financial flexibility.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
3.66B	3.90B	4.15B	4.73B	4.58B	2.93B
	Gross Profit
865.88M	912.19M	879.31M	937.56M	878.50M	852.59M
	EBIT
91.62M	95.86M	35.92M	38.99M	36.29M	8.10M
	EBITDA
218.18M	297.55M	255.74M	306.07M	310.33M	225.27M
	Net Income Common Stockholders
24.85M	34.66M	40.73M	12.63M	30.13M	-19.81M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
649.24M	684.55M	787.24M	658.06M	616.41M	548.34M
	Total Assets
2.94B	2.93B	3.24B	3.35B	3.56B	2.89B
	Total Debt
1.19B	1.15B	1.36B	1.33B	1.50B	1.19B
	Net Debt
619.04M	528.40M	624.61M	717.26M	921.82M	687.58M
	Total Liabilities
1.69B	1.68B	1.94B	1.98B	2.18B	1.55B
	Stockholders Equity
1.23B	1.22B	1.28B	1.34B	1.38B	1.31B
Cash Flow		Free Cash Flow
203.05M	283.31M	253.03M	265.95M	120.32M	169.28M
	Operating Cash Flow
256.56M	338.07M	299.25M	323.77M	188.80M	213.00M
	Investing Cash Flow
-125.86M	-66.76M	-45.33M	-43.21M	306.28M	-157.40M
	Financing Cash Flow
-204.22M	-363.76M	-109.78M	-244.97M	-434.56M	-130.52M

Four Seas Mercantile Holdings Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.60
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0374, the sentiment is Positive. The current price of 2.6 is below the 20-day moving average (MA) of 2.60, below the 50-day MA of 2.60, and above the 200-day MA of 2.54, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 73.78 is Negative, neither overbought nor oversold. The STOCH value of 33.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
1475	71 Outperform	HK$7.19B	37.24	5.15%	2.31%	3.95%	-42.81%
0374	64 Neutral	HK$988.32M	40.19	2.03%	4.62%	-8.35%	96.66%
Sector *	62 Neutral	$6.76B	11.06	2.80%	6.66%	2.68%	-24.89%
1000	51 Neutral	€144.04M	―	-0.32%	―	2.71%	86.82%
1239	24 Underperform	HK$74.97M	―		―	-27.38%	-3.55%

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.