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Yau Lee Holdings Limited (HK:0406)
:0406
Hong Kong Market
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Yau Lee Holdings Limited (0406) AI Stock Analysis

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HK:0406

Yau Lee Holdings Limited

(0406)

Rating:49Neutral
Price Target:
HK$0.50
▼(-34.21% Downside)
Yau Lee Holdings Limited's overall stock score reflects significant financial challenges, including high leverage and strained cash flow management. The technical analysis indicates a bearish trend, and while the valuation shows a high dividend yield, the negative P/E ratio highlights earnings concerns. These factors collectively suggest caution for potential investors.

Yau Lee Holdings Limited (0406) vs. iShares MSCI Hong Kong ETF (EWH)

Yau Lee Holdings Limited Business Overview & Revenue Model

Company DescriptionYau Lee Holdings Limited (0406) is a leading construction and engineering company based in Hong Kong, specializing in building construction, civil engineering, and property development. The company operates across various sectors, including commercial, residential, and institutional projects. Yau Lee is also involved in project management and consultancy services, providing a comprehensive suite of construction-related services to meet the diverse needs of its clients.
How the Company Makes MoneyYau Lee Holdings generates revenue primarily through its construction contracts, which include building construction and civil engineering projects. The company's revenue model is based on a combination of fixed-price contracts, unit-price contracts, and cost-plus contracts, allowing for flexibility in pricing depending on the project requirements. Key revenue streams include income from completed projects, ongoing contracts, and consultancy services. Additionally, Yau Lee has established strategic partnerships with various governmental and private entities, which help secure contracts and expand its market presence. The company's focus on sustainable construction practices and innovation also plays a crucial role in attracting clients and enhancing its competitive edge, further contributing to its earnings.

Yau Lee Holdings Limited Financial Statement Overview

Summary
Yau Lee Holdings Limited faces financial challenges across all major financial statements. Despite revenue growth, profitability and cash flow metrics are under pressure, and the company is highly leveraged. The balance sheet shows a high debt burden, and cash flow management is strained, indicating potential financial instability.
Income Statement
45
Neutral
The income statement reveals a challenging financial period for Yau Lee Holdings Limited. Despite a revenue growth rate of 10.35% in the most recent year, the company experienced a significant decline in profitability, with a negative net profit margin of -1.03% and a gross profit margin of only 1.40%. The EBIT and EBITDA margins also decreased, indicating pressure on operational efficiency. These factors suggest difficulties in maintaining profitability amidst revenue growth.
Balance Sheet
50
Neutral
The balance sheet shows a high debt-to-equity ratio of 2.03, indicating significant leverage and potential financial risk. Return on equity is negative at -7.19%, reflecting the company's struggle to generate returns for shareholders. However, the equity ratio stands at 20.93%, suggesting a moderate level of equity financing relative to total assets. The high leverage poses a risk, but the equity ratio provides some stability.
Cash Flow
40
Negative
Cash flow analysis indicates negative operating and free cash flows, with a free cash flow growth rate of -4.69%. The operating cash flow to net income ratio is negative, highlighting cash flow challenges. However, the free cash flow to net income ratio is 1.61, suggesting some ability to cover net losses with free cash flow. Overall, cash flow management appears strained, with significant room for improvement.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue8.72B9.62B7.81B6.69B6.73B6.79B
Gross Profit699.97M134.94M682.48M552.31M659.23M575.68M
EBITDA223.04M150.21M226.98M193.36M211.00M288.80M
Net Income53.45M-98.88M67.09M49.64M68.19M150.43M
Balance Sheet
Total Assets6.26B6.57B5.73B4.85B4.74B5.11B
Cash, Cash Equivalents and Short-Term Investments808.09M718.65M905.59M742.58M934.31M650.75M
Total Debt2.44B2.79B2.31B1.38B1.35B1.76B
Total Liabilities4.72B5.20B4.22B3.35B3.20B3.63B
Stockholders Equity1.54B1.38B1.51B1.51B1.54B1.48B
Cash Flow
Free Cash Flow-472.85M-450.67M-623.19M-285.56M750.49M656.70M
Operating Cash Flow-246.00M-280.08M-463.32M-237.30M813.44M677.19M
Investing Cash Flow-198.34M-133.15M-148.43M-26.21M-20.28M15.52M
Financing Cash Flow1.40B270.77M791.25M25.95M-517.72M-627.56M

Yau Lee Holdings Limited Technical Analysis

Technical Analysis Sentiment
Negative
Last Price0.76
Price Trends
50DMA
0.78
Negative
100DMA
0.86
Negative
200DMA
0.92
Negative
Market Momentum
MACD
-0.02
Positive
RSI
34.40
Neutral
STOCH
16.67
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0406, the sentiment is Negative. The current price of 0.76 is below the 20-day moving average (MA) of 0.76, below the 50-day MA of 0.78, and below the 200-day MA of 0.92, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 34.40 is Neutral, neither overbought nor oversold. The STOCH value of 16.67 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:0406.

Yau Lee Holdings Limited Peers Comparison

Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
HK$537.90M6.4357.03%6.84%48.34%40.71%
59
Neutral
HK$320.00M94.121.59%39.98%
58
Neutral
HK$14.01B4.01-3.70%5.60%2.26%-61.32%
50
Neutral
HK$346.50M-8.56%-0.84%72.06%
49
Neutral
HK$315.40M6.72-6.86%6.94%23.19%-247.32%
45
Neutral
HK$330.00M103.132.51%7.08%-5.88%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:0406
Yau Lee Holdings Limited
0.76
-0.36
-32.14%
HK:8305
Tong Kee (Holding) Ltd.
0.28
0.23
460.00%
HK:8188
GME Group Holdings Ltd
1.05
0.74
238.71%
HK:6063
Lotus Horizon Holdings Limited
0.16
-0.06
-27.27%
HK:0924
Khoon Group Limited
0.32
-0.17
-34.69%

Yau Lee Holdings Limited Corporate Events

Yau Lee Holdings Schedules AGM with Key Resolutions
Jul 21, 2025

Yau Lee Holdings Limited has announced its upcoming annual general meeting to be held on September 3, 2025. The meeting will address several key resolutions, including the re-election of directors, the re-appointment of the independent auditor, and the authorization for the board to manage share allotments and repurchases. These resolutions aim to strengthen the company’s governance and financial strategies, potentially impacting its market operations and shareholder value.

Yau Lee Holdings Reports Revenue Growth Amidst Financial Challenges
Jun 25, 2025

Yau Lee Holdings Limited reported a significant increase in revenue for the year ended 31 March 2025, reaching HK$9.62 billion compared to HK$7.81 billion in the previous year. However, the company faced a challenging year with a gross profit decline to HK$134.94 million from HK$682.48 million and a net loss of HK$101.18 million, contrasting with a profit of HK$65.80 million in 2024. This financial downturn reflects increased costs and reduced profitability, impacting the company’s market position and shareholder value.

Yau Lee Holdings Updates on Insurance Agreements
Jun 20, 2025

Yau Lee Holdings Limited has announced a supplemental update regarding its insurance agreements. The company determined the annual premiums for these agreements by evaluating market rates and obtaining multiple quotations, ultimately selecting Asia Insurance based on favorable pricing, policy coverage, and reputation. The board considers these transactions to be fair, reasonable, and in the best interest of the company and its shareholders.

Yau Lee Holdings Issues Profit Warning Amid Market Challenges
Jun 10, 2025

Yau Lee Holdings Limited has issued a profit warning, anticipating a net loss between HK$100 million and HK$130 million for the fiscal year ending March 2025, compared to a net profit of HK$66 million the previous year. This downturn is attributed to negative contract price fluctuations in government housing projects, unrealized revaluation losses in commercial investment properties, and reduced profit margins in the fitting-out business. Despite these challenges, the company experienced some offsetting gains from in-kind compensation related to a relocation agreement.

Yau Lee Holdings to Announce Year-End Financial Results
Jun 3, 2025

Yau Lee Holdings Limited has scheduled a board meeting on June 25, 2025, to approve and publish the final results for the fiscal year ending March 31, 2025, and to consider recommending a final dividend. This meeting is crucial for stakeholders as it will provide insights into the company’s financial performance and potential returns on investment.

Yau Lee Holdings Enters Connected Transaction for Medical Insurance
Jun 2, 2025

Yau Lee Holdings Limited, through its subsidiary REC Engineering Company Limited, has entered into Medical Insurance Agreements with Asia Insurance to provide group medical insurance from June 2025 to May 2026. This transaction is classified as a connected transaction under Hong Kong’s Listing Rules, requiring reporting and announcement due to the involvement of a connected person, but it is exempt from circular and independent shareholders’ approval.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 23, 2025