South China Holdings Company Limited (0413) AI Stock Analysis

• Market Cap: HK$467.38M
• Dividend Yield: N/A
• Average Volume (3M): 1.56M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.13
• Revenue Growth: 1.26%
• EPS Growth: 64.00%
• Country: HK
• Employees: 8,502
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Leisure
• EPS (TTM): >-0.01
• Shares Outstanding: 13,221,302,000
• 10 Day Avg. Volume: 865,451
• 30 Day Avg. Volume: 1,556,186
• PEG Ratio: -6.89
• Price to Book (P/B): 0.09
• Price to Sales (P/S): 0.15
• P/FCF Ratio: 1.22
• 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: 53 Neutral
• Price Target: HK$0.04 ▲(23.33% Upside)

The score is driven primarily by moderately improving fundamentals (better cash flow and a return to profitability) but constrained by a long-term revenue decline and relatively high debt. Technicals are neutral-to-mildly supportive, while valuation is a notable drag due to a negative P/E and no dividend yield data.

Positive Factors

Improved cash generation

The company moved operating cash flow from negative to positive and materially improved free cash flow, with net income returning to positive in 2024. Sustained cash generation strengthens reinvestment capacity, supports working capital and allows debt reduction over the medium term.

Diversified business model

Multiple revenue streams—development, leasing, trading and financial investments—reduce single-market exposure and smooth cash flows across cycles. Structural diversification supports resilience in a 2–6 month horizon and provides optionality for reallocating capital to higher-return areas.

Stable gross margins

Consistent gross margins near mid-teens suggest persistent pricing power or cost control at the core operations. Margin stability provides a foundation for operating leverage as revenues recover and helps preserve cash conversion even while top-line growth lags.

Negative Factors

Long-term revenue decline

A material revenue decline over several years reduces scale, erodes market position and limits the ability to absorb fixed costs. Without a clear, sustained top-line recovery, margin improvements and cash generation gains may be harder to maintain beyond the short term.

Relatively high leverage

Persistently elevated debt levels constrain financial flexibility, increasing vulnerability to rate rises or revenue shocks. Even with slight improvement, leverage limits capital allocation choices and forces prioritization of interest and principal over growth investments in the coming months.

Weak return on equity and shrinking asset base

Low ROE signals poor capital efficiency, while asset base contraction—potentially from divestments or impairments—reduces future earning capacity. Together these structural issues constrain sustainable profitability and investor returns over a multi-month horizon.

South China Holdings Company Limited Business Overview & Revenue Model

Company Description

South China Holdings Company Limited, an investment holding company, engages in the manufacture and trading of toys, property investment and development, and agriculture and forestry businesses. The company operates through Trading and Manufacturing, Property Investment and Development, and Agriculture and Forestry segments. The Trading and Manufacturing segment is involved in the manufacturing and trading of merchandises, including toys, footwear, and leather products. The Property Investment and Development segment engages in the property investment and development activities. This segment has a property portfolio with gross floor area of approximately 690,000 square meters in Mainland China; and 26,000 square meters in Hong Kong. The Agriculture and Forestry segment is involved in the cultivation of fruit trees and crops; rearing of livestock and aquatic products; and forestation and sale of relevant agricultural produce. The company also manufactures and trades in electronic products; and manufactures and sells leather chemical and sports products. In addition, it invests in, develops, and manages properties. Further, the company is involved in the woods and crops plantation business. It operates in the People's Republic of China, the United States, Europe, Japan, and internationally. The company was formerly known as South China (China) Limited and changed its name to South China Holdings Company Limited in June 2015. South China Holdings Company Limited was founded in 1976 and is headquartered in Central, Hong Kong.

How the Company Makes Money

South China Holdings Company Limited generates revenue through multiple streams, primarily from its real estate development projects, which include both residential and commercial properties. The sale and leasing of these properties provide significant income. Additionally, the company engages in trading activities, which contribute to its revenue through the sale of goods. The firm also earns income from its investments in financial services, capitalizing on market opportunities and partnerships that enhance its profitability. Strategic collaborations with other businesses and entities in the real estate and trading sectors further bolster its revenue potential, allowing the company to leverage market trends and consumer demands.

South China Holdings Company Limited Financial Statement Overview

Summary

The company is showing signs of recovery with improved cash flow and a return to profitability in 2024. However, declining revenue and high debt levels pose significant risks. Continued focus on revenue growth and debt management is crucial for sustainable recovery.

Income Statement

The company shows a declining revenue trend over the recent years, with a significant drop from 2019 to 2024. Gross profit margin was stable around 14-16%, but net profit margin has been inconsistent, fluctuating from a high of 13.5% in 2019 to recent losses. The EBIT and EBITDA margins have been relatively stable but are not strong enough to offset the revenue decline. Recent years show a turnaround with a positive net income in 2024, indicating a potential recovery.

Balance Sheet

The balance sheet indicates a relatively high level of debt, with a debt-to-equity ratio that has improved slightly over the years. The equity ratio has remained stable, suggesting a balanced approach to asset funding. However, the return on equity is weak, showing limited profitability relative to shareholder equity. The company’s asset base has decreased, which could indicate divestments or impairments.

Cash Flow

The company has demonstrated improved operating cash flow over recent periods, moving from negative to positive figures. Free cash flow has also improved significantly from 2020 onwards, indicating better cash management and potential for reinvestment or debt reduction. The operating cash flow to net income ratio suggests efficient cash generation from operations despite previous losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.95B	3.23B	2.89B	3.81B	4.72B	4.09B
Gross Profit	386.38M	475.84M	479.36M	586.37M	525.85M	526.15M
EBITDA	267.14M	398.07M	342.41M	426.94M	391.52M	445.89M
Net Income	-11.93M	696.00K	-31.85M	74.73M	30.85M	69.78M
Balance Sheet
Total Assets	13.03B	12.97B	13.26B	13.54B	15.61B	14.86B
Cash, Cash Equivalents and Short-Term Investments	396.70M	628.16M	544.32M	450.63M	629.04M	597.21M
Total Debt	4.37B	4.00B	4.75B	4.54B	5.60B	5.24B
Total Liabilities	6.81B	6.85B	6.97B	7.05B	8.72B	8.18B
Stockholders Equity	5.90B	5.83B	6.00B	6.16B	6.55B	6.36B
Cash Flow
Free Cash Flow	346.20M	409.93M	105.55M	488.41M	-163.73M	-115.37M
Operating Cash Flow	388.74M	442.44M	124.53M	528.80M	-115.79M	-76.97M
Investing Cash Flow	-37.70M	-17.35M	57.55M	274.80M	-49.12M	-48.51M
Financing Cash Flow	-375.20M	-345.94M	-79.09M	-1.12B	58.19M	-335.31M

South China Holdings Company Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.03
• 50DMA: Positive
• 100DMA: Positive
• 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:0413, the sentiment is Positive. The current price of 0.03 is below the 20-day moving average (MA) of 0.03, below the 50-day MA of 0.03, and below the 200-day MA of 0.03, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 53.95 is Neutral, neither overbought nor oversold. The STOCH value of 36.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0413.

South China Holdings Company Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0114	66 Neutral	HK$362.69M	7.26	8.24%	8.96%	5.72%	986.84%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
0413	53 Neutral	HK$467.38M	-40.00	-0.20%	―	1.26%	64.00%
0361	51 Neutral	HK$497.36M	-26.45	-7.42%	―	-5.36%	-63.16%
1005	50 Neutral	HK$325.17M	-1.33	-37.46%	4.17%	-13.08%	-21.27%
0381	44 Neutral	HK$200.79M	-0.76	-41.64%	―	19.25%	-263.84%
0180	41 Neutral	HK$180.61M	-0.89	-10.53%	―	-7.61%	-37.66%

South China Holdings Company Limited Corporate Events

South China Holdings Wins Unanimous Independent Shareholder Backing for Supplemental Agreement

Independent shareholders of South China Holdings Company Limited have overwhelmingly approved, by poll, a supplemental agreement dated 6 November 2025 and the transactions contemplated under it at an extraordinary general meeting held on 12 January 2026. The ordinary resolution received 100% of the votes cast by eligible independent shareholders, with over 957.5 million shares voting in favour and none against, while major shareholder-related interests abstained in line with Hong Kong listing rules. The decisive endorsement clears the way for the company to proceed with the contemplated transactions, signalling strong minority shareholder support and removing a key procedural hurdle for the group’s planned arrangements.

The most recent analyst rating on (HK:0413) stock is a Hold with a HK$0.04 price target. To see the full list of analyst forecasts on South China Holdings Company Limited stock, see the HK:0413 Stock Forecast page.

South China Holdings Details Valuation Basis and Corrects Purchaser Ownership in RMB290 Million Asset Disposal

South China Holdings Company Limited has issued a supplemental announcement regarding its previously disclosed major transaction to dispose of certain land use rights and a plant building in the PRC for RMB290 million (approximately HK$318.7 million). The company clarified that the consideration was set after arm’s length negotiations with reference to an independent preliminary valuation of about RMB280 million, conducted using the market approach and based on standard assumptions about title, regulatory compliance and the absence of forced-sale conditions. Management reviewed and accepted the valuation methodology as consistent with common PRC market practice, and the board believes the sale price, which exceeds the preliminary value, is fair, reasonable and on normal commercial terms, enabling the group to unlock value from assets that are no longer profitable due to high operating and labour costs and reduced orders from a key US customer, thereby improving working capital. The company also corrected the ownership structure of the purchaser, stating that 80% of its registered capital is ultimately owned by Hu Wenwu and 20% by Xu Hongyan, revising an earlier disclosure while confirming that all other details of the original announcement remain unchanged.

The most recent analyst rating on (HK:0413) stock is a Hold with a HK$0.03 price target. To see the full list of analyst forecasts on South China Holdings Company Limited stock, see the HK:0413 Stock Forecast page.

South China Holdings Sells Dongguan Land and Plant in RMB290 Million Deal

South China Holdings Company Limited has agreed to dispose of a land use right and an associated plant building in Dongguan, held through its indirect wholly owned subsidiary Everwin Toys (Dongguan) Company Limited, for RMB290 million (approximately HK$318.7 million), compared with an unaudited carrying value of about HK$57.8 million as at 30 November 2025. The transaction, classified as a major transaction under Hong Kong listing rules, has already received written approval from the company’s controlling shareholder and his associates, who together hold about 61.23% of the company’s share capital, allowing the deal to proceed without convening a general meeting and signaling a significant asset realignment that may strengthen the company’s financial position and streamline its mainland manufacturing footprint.

The most recent analyst rating on (HK:0413) stock is a Hold with a HK$0.03 price target. To see the full list of analyst forecasts on South China Holdings Company Limited stock, see the HK:0413 Stock Forecast page.

South China Holdings to Discuss Key Financial Agreement Amendments

South China Holdings Company Limited has announced an extraordinary general meeting to discuss and potentially approve a supplemental agreement involving Thousand China Investments Limited and South China Financial Holdings Limited. The agreement seeks to extend the maturity date of convertible bonds by three years, alter the interest rate, and adjust the conversion price, which could significantly impact the company’s financial strategy and stakeholder interests.

The most recent analyst rating on (HK:0413) stock is a Hold with a HK$0.03 price target. To see the full list of analyst forecasts on South China Holdings Company Limited stock, see the HK:0413 Stock Forecast page.

South China Holdings Delays Circular Dispatch for Convertible Bonds Alterations

South China Holdings Company Limited has announced a delay in the dispatch of a circular related to proposed alterations of HK$89,840,000 convertible bonds. The company requires additional time to finalize the information to be included in the circular, which is now expected to be dispatched on or before December 4, 2025. This delay may impact stakeholders who are awaiting further details on the supplemental agreement and the proposed alterations.

The most recent analyst rating on (HK:0413) stock is a Hold with a HK$0.03 price target. To see the full list of analyst forecasts on South China Holdings Company Limited stock, see the HK:0413 Stock Forecast page.

South China Holdings Proposes Bond Term Alterations Amid Financial Challenges

South China Holdings Company Limited announced proposed alterations to the terms of its bonds, which are considered a discloseable transaction under the Listing Rules due to the applicable percentage ratios. The company’s financial performance has shown significant losses, with net assets decreasing from HK$221,459,000 in 2023 to HK$33,392,000 by mid-2025. This announcement may impact stakeholders’ perceptions and the company’s market position, given its current financial challenges.

South China Holdings Proposes Bond Term Alterations

South China Holdings Company Limited has announced proposed alterations to the terms of its bonds, which include extending the maturity date by three years to January 2029, increasing the interest rate from 1% to 2% per annum after the third anniversary, and reducing the conversion price from HK$0.32 to HK$0.28 per share. These changes are classified as connected transactions due to the significant shareholding of Mr. Ng, the company’s executive director and chairman, and require approval from independent shareholders. An extraordinary general meeting (EGM) will be held to seek this approval, with a circular providing further details expected to be dispatched by November 27, 2025.