Fountain Set (Holdings) Limited (0420) AI Stock Analysis

• Market Cap: €759.52M
• Dividend Yield: 1.87%
• Average Volume (3M): 108.70K
• Price to Earnings (P/E): 53.4
• Beta (1Y): 0.28
• Revenue Growth: -0.31%
• EPS Growth: -72.12%
• Country: HK
• Employees: 5,500
• Sector: Consumer Cyclical
• Sector Strength: 64
• Industry: Apparel - Manufacturers
• EPS (TTM): 0.02
• Shares Outstanding: 1,225,027,000
• 10 Day Avg. Volume: 125,695
• 30 Day Avg. Volume: 108,698
• PEG Ratio: -0.62
• Price to Book (P/B): 0.24
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -6.43
• 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: 57 Neutral
• Price Target: HK$0.50 ▼(-20.63%Downside)

The overall score of 57 is primarily influenced by the company's solid balance sheet and positive short-term price momentum. However, operational challenges and high valuation metrics temper the outlook. The absence of recent earnings call insights limits the evaluation of future prospects.

Fountain Set (Holdings) Limited Business Overview & Revenue Model

Company Description

Fountain Set (Holdings) Limited is a Hong Kong-based textile company primarily engaged in the manufacturing and sale of knitted fabrics and garments. The company operates in the textile industry, providing a wide range of high-quality fabric products to various markets, including fashion, sportswear, and casual wear. Fountain Set is known for its vertically integrated operations, encompassing yarn dyeing, fabric knitting, dyeing, and finishing, which allows it to offer comprehensive textile solutions to its clients.

How the Company Makes Money

Fountain Set (Holdings) Limited generates revenue primarily through the production and sale of knitted fabrics and garments. The company operates a vertically integrated business model, which involves several stages of textile production, including yarn dyeing, fabric knitting, dyeing, and finishing. This integration allows Fountain Set to control the quality and cost at each stage of the production process, enhancing its competitiveness. Additionally, the company collaborates with various global fashion brands and retailers, providing tailor-made fabric solutions to meet specific client needs. These partnerships, along with its extensive distribution network, contribute significantly to its revenue streams. Fountain Set also invests in research and development to innovate and offer sustainable and high-performance textile products, which are increasingly in demand in the marketplace.

Fountain Set (Holdings) Limited Financial Statement Overview

Summary

The company shows strong balance sheet stability with low leverage and high equity, but faces operational challenges reflected in negative EBIT margins and recent cash flow issues. These financial elements highlight the need for improved cash generation to ensure long-term stability.

Income Statement

The company has experienced revenue fluctuations with a decline from 2021 to 2023. The gross profit margin improved to 11.96% in 2024 from 7.25% in 2023, suggesting better cost management. However, the company reported negative EBIT margins in recent years, indicating operational challenges. Despite a positive net income in 2024, the net profit margin remains low at 0.32%.

Balance Sheet

The balance sheet shows a strong equity position with an equity ratio of 70.16% in 2024, indicating financial stability. The debt-to-equity ratio improved to 0.06, reflecting low leverage. The company has consistently maintained a high level of cash and equivalents, enhancing liquidity.

Cash Flow

Cash flow analysis reveals volatility, with zero operating and free cash flows reported in 2024, a stark contrast to previous years. The lack of cash flow in the latest period raises concerns about cash generation and sustainability.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.43B	4.44B	6.05B	6.75B	4.94B
Gross Profit	529.41M	321.99M	577.82M	879.54M	611.13M
EBITDA	252.01M	339.40M	204.77M	549.24M	377.72M
Net Income	14.26M	50.90M	-115.53M	241.33M	85.71M
Balance Sheet
Total Assets	4.61B	4.90B	5.05B	5.75B	5.43B
Cash, Cash Equivalents and Short-Term Investments	1.30B	1.38B	1.39B	824.98M	1.26B
Total Debt	182.67M	325.03M	579.25M	482.31M	414.18M
Total Liabilities	1.16B	1.43B	1.62B	1.99B	1.85B
Stockholders Equity	3.24B	3.27B	3.22B	3.56B	3.39B
Cash Flow
Free Cash Flow	-25.39M	195.00M	741.49M	-372.07M	470.90M
Operating Cash Flow	151.70M	293.76M	905.63M	-210.39M	601.30M
Investing Cash Flow	11.07M	1.86M	-136.63M	-148.77M	-145.24M
Financing Cash Flow	-242.52M	-309.90M	-171.40M	-64.78M	-171.54M

Fountain Set (Holdings) Limited Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 0.63
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0420, the sentiment is Neutral. The current price of 0.63 is below the 20-day moving average (MA) of 0.64, above the 50-day MA of 0.62, and above the 200-day MA of 0.59, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 46.05 is Neutral, neither overbought nor oversold. The STOCH value of 64.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:0420.

Fountain Set (Holdings) Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1425	76 Outperform	HK$887.50M	5.21	21.91%	7.89%	-4.16%	-2.85%
0420	57 Neutral	€759.52M	53.45	0.43%	1.87%	-0.31%	-72.12%
Sector *	57 Neutral	HK$26.40B	4.11	-2.03%	5.49%	-0.23%	-68.02%
0321	54 Neutral	$1.15B	9.76	2.43%	3.61%	7.89%	3176.19%
1382	50 Neutral	$2.06B	12.49	5.75%	7.84%	10.66%	3.88%
3778	45 Neutral	HK$457.11M	―	-1.72%	―	14.05%	56.22%

Fountain Set (Holdings) Limited Corporate Events

Fountain Set Appoints New Independent Director

Fountain Set (Holdings) Limited announced the appointment of Dr. LIN Lin as an independent non-executive Director. The company confirmed her independence, stating she meets all criteria set by the Listing Rules and has no financial interests or connections with the company’s core connected persons. This appointment is expected to strengthen the company’s governance structure.

Fountain Set Announces Board Restructuring

Fountain Set (Holdings) Limited has announced changes to its board of directors, effective from June 7, 2025. The company, incorporated in Hong Kong, has appointed Mr. LIU Xianfu as the Chairman and Chief Executive Officer, along with other executive, non-executive, and independent non-executive directors. The announcement includes the composition of the board committees, which are crucial for the company’s governance structure. These changes are likely to impact the company’s strategic direction and governance, potentially influencing its market position and stakeholder relations.

Fountain Set Announces Forfeiture of Unclaimed 2018 Dividends

Fountain Set (Holdings) Limited has announced the forfeiture of unclaimed final dividends from 2018, as per their Articles of Association. The dividends, initially payable on May 31, 2019, will be forfeited and revert to the company if not claimed by July 5, 2025. Shareholders who have not yet received their dividend payments are advised to contact the company’s share registrar.

Fountain Set (Holdings) Limited Successfully Passes All AGM Resolutions

Fountain Set (Holdings) Limited announced that all proposed resolutions at its Annual General Meeting held on June 6, 2025, were successfully passed by shareholders. Key resolutions included the re-election of directors, approval of dividends, and granting of mandates for share issuance and repurchase. The meeting also saw the reappointment of SHINEWING (HK) CPA Limited as the company’s independent auditor. The resolutions reflect the company’s ongoing strategic initiatives and governance practices, which are likely to impact its operational and financial strategies positively.

Fountain Set Announces Board Reshuffle with New Appointments

Fountain Set (Holdings) Limited has announced significant changes to its board of directors. Mr. William Lam will resign as an independent non-executive director, a member of the Audit Committee, and a member of the Nomination Committee, effective June 7, 2025, to focus on personal engagements. Dr. Lin Lin will join as an independent non-executive director and a member of the Nomination Committee, while Dr. Yen Gordon will become a member of the Audit Committee, both effective the same date. The company expressed gratitude to Mr. Lam for his contributions and highlighted Dr. Lin’s extensive experience in the textile industry, which is expected to bolster the company’s strategic direction.

Fountain Set Announces AGM and Key Resolutions for 2025

Fountain Set (Holdings) Limited has announced its upcoming annual general meeting scheduled for June 6, 2025. Key agenda items include the adoption of financial statements for the year ended December 31, 2024, approval of a final and special dividend, re-election of directors, and authorization of directors’ remuneration. Additionally, the company seeks approval for share buyback and issuance resolutions, which could impact its stock market activities and stakeholder interests.