Hing Lee (HK) Holdings Limited (0396) AI Stock Analysis

• Market Cap: HK$91.31M
• Dividend Yield: 8.93%
• Average Volume (3M): 51.33K
• Price to Earnings (P/E): 5.4
• Beta (1Y): -0.15
• Revenue Growth: -13.44%
• EPS Growth: N/A
• Country: HK
• Employees: 125
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Furnishings, Fixtures & Appliances
• EPS (TTM): <0.01
• Shares Outstanding: 808,096,000
• 10 Day Avg. Volume: 35,800
• 30 Day Avg. Volume: 51,333
• PEG Ratio: -0.02
• Price to Book (P/B): 1.38
• Price to Sales (P/S): 0.63
• P/FCF Ratio: 10.76
• 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: 52 Neutral
• Price Target: HK$0.11 ▼(-12.50% Downside)

The score is held back mainly by weak financial quality—especially the lack of operating/free cash flow and an uneven revenue/margin history—despite a relatively strong balance sheet and a return to profitability. Valuation is a key support (low P/E and high yield), while technicals remain soft with the price below key moving averages and slightly negative momentum.

Positive Factors

Strong balance sheet / low leverage

Low leverage and a solid equity ratio give the company durable financial flexibility. This reduces default risk, supports operations during revenue volatility, and provides capacity to fund targeted investment or working-capital needs without immediate external financing.

Return to profitability and improving gross margin

Re-establishing net income alongside rising gross margins indicates improving cost control and core profitability. Sustained margin recovery can rebuild retained earnings, improve cash flow conversion potential over time, and support reinvestment or shareholder distributions.

Revenue growth resumed in 2024

A reversal from prior declines to year-over-year revenue growth suggests restoring demand or better execution. If sustained, growing top-line helps absorb fixed costs, supports margin expansion, and provides a firmer base for long-term cash generation and strategic initiatives.

Negative Factors

Zero operating and free cash flow in 2024

Lack of operating and free cash flow is a structural weakness: it limits the company's ability to self-fund capex, pay dividends, or buffer shocks. Persistent cash-flow deficits force reliance on balance-sheet reserves or external funding, raising execution and solvency risk.

Multi-year revenue decline and margin volatility

A prolonged revenue downtrend and unstable margins indicate structural demand or competitive issues. This pattern makes long-term planning and reinvestment harder, raises the probability of future earnings disappointments, and undermines sustainable profit generation.

Significant decrease in total assets 2023-2024

A material drop in total assets can signal reduced capacity, asset sales, or underinvestment. That erosion may constrain production, limit scaling of revenue, and reduce collateral for financing, weakening the company’s ability to execute growth strategies over the medium term.

Hing Lee (HK) Holdings Limited Business Overview & Revenue Model

Company Description

Hing Lee (HK) Holdings Limited (0396) is a Hong Kong-based investment holding company primarily engaged in the manufacturing and distribution of a wide range of plastic products. The company operates in sectors such as consumer goods, packaging, and industrial products. Its core offerings include plastic household items, containers, and other related products, catering to both local and international markets.

How the Company Makes Money

Hing Lee generates revenue primarily through the sale of its plastic products to various sectors, including retail, hospitality, and industrial clients. The company operates on a business-to-business (B2B) model, supplying large quantities of products to distributors and retailers. Key revenue streams include direct sales of manufactured goods, as well as potential partnerships with other firms for co-branding or distribution agreements. Additionally, Hing Lee may benefit from economies of scale in production, enabling competitive pricing that attracts a broader customer base, thus enhancing their overall earnings potential.

Hing Lee (HK) Holdings Limited Financial Statement Overview

Summary

Recovery is underway with a return to positive net income in 2024 and improved gross margin, and the balance sheet shows low leverage and solid equity. However, cash generation is a major weakness (zero operating and free cash flow in 2024), and the multi-year revenue decline and historical margin volatility increase stability risk.

Income Statement

The company has shown improvement in recent years with a return to positive net income in 2024, after significant losses in the previous years. Gross profit margin has improved from 2023 to 2024, indicating better cost management. However, the overall revenue trend has been declining from 2019 to 2023. The revenue growth from 2023 to 2024 is a positive sign, but historical volatility in EBIT and net income margins suggests potential instability.

Balance Sheet

The company's balance sheet shows a strong equity position with a low debt-to-equity ratio, decreasing from 2023 to 2024. This indicates a relatively low leverage. The equity ratio is solid, showing a strong asset backing. However, the significant decrease in total assets from 2023 to 2024 might be a concern for future growth capabilities.

Cash Flow

Cash flow management appears to be a challenge, with zero operating and free cash flows in 2024. The lack of positive free cash flow and a fluctuating cash flow history may indicate issues with cash generation and sustainability of operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	102.78M	113.87M	94.21M	100.39M	175.01M	203.47M
Gross Profit	11.95M	15.70M	22.41M	24.30M	24.08M	18.82M
EBITDA	5.74M	5.80M	-100.00K	-12.91M	10.72M	-39.58M
Net Income	16.86M	15.32M	-11.46M	-26.73M	-5.52M	-59.20M
Balance Sheet
Total Assets	66.56M	66.32M	182.27M	222.16M	288.35M	294.35M
Cash, Cash Equivalents and Short-Term Investments	31.78M	26.95M	33.51M	38.05M	45.97M	70.42M
Total Debt	202.00K	2.25M	60.10M	80.88M	94.33M	85.34M
Total Liabilities	11.72M	14.32M	75.10M	103.43M	140.94M	141.37M
Stockholders Equity	54.84M	52.00M	107.17M	118.73M	147.41M	152.98M
Cash Flow
Free Cash Flow	7.14M	6.68M	15.61M	195.00K	-30.64M	-20.45M
Operating Cash Flow	7.16M	6.70M	15.87M	199.00K	-30.59M	3.12M
Investing Cash Flow	51.22M	51.22M	-223.00K	88.00K	-113.00K	-21.40M
Financing Cash Flow	-65.34M	-64.20M	-20.13M	-7.44M	5.65M	27.49M

Hing Lee (HK) Holdings Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.12
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0396, the sentiment is Positive. The current price of 0.12 is above the 20-day moving average (MA) of 0.11, above the 50-day MA of 0.11, and above the 200-day MA of 0.10, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 51.51 is Neutral, neither overbought nor oversold. The STOCH value of 47.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0396.

Hing Lee (HK) Holdings Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0837	78 Outperform	HK$1.93B	9.69	21.21%	4.75%	4.50%	4.18%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
0396	52 Neutral	HK$91.31M	5.41	20.69%	8.93%	-13.44%	―
1715	44 Neutral	HK$165.95M	-2.42	-39.50%	―	-32.54%	71.35%
8547	42 Neutral	HK$45.52M	128.33	―	―	-21.85%	-98.18%
2127	41 Neutral	HK$76.58M	-0.04	―	―	-72.73%	-764.81%
1198	39 Underperform	HK$356.00M	-0.69	-36.67%	―	―	―