Sincere Watch (Hong Kong) (0444) AI Stock Analysis

• Market Cap: HK$60.44M
• Dividend Yield: N/A
• Average Volume (3M): 0.00
• Price to Earnings (P/E): ―
• Beta (1Y): 0.90
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: HK
• Employees: 100
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Luxury Goods
• EPS (TTM): N/A
• Shares Outstanding: 6,043,950,000
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 0
• PEG Ratio: -0.11
• Price to Book (P/B): 4.73
• Price to Sales (P/S): 1.20
• P/FCF Ratio: 29.26
• 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: 38 Underperform
• Price Target: ―

Sincere Watch (Hong Kong) is in a precarious financial position with declining revenue, high leverage, and negative profitability. The stock's technical indicators show stability but lack momentum, while valuation metrics reflect significant challenges with a negative P/E ratio. The absence of dividend yield further undermines attractiveness. Strategic changes are necessary to improve the financial outlook.

Positive Factors

Exclusive Distribution Rights

Exclusive distribution rights provide a competitive edge, ensuring access to high-demand products and fostering strong relationships with luxury watchmakers.

Brand Reputation

A strong brand reputation enhances customer trust and loyalty, crucial for sustaining sales in the competitive luxury market.

Operational Control

Improvement in free cash flow indicates better operational control, which is essential for long-term sustainability and financial health.

Negative Factors

Declining Revenue

A declining revenue trend suggests weakening market position and demand, posing risks to future profitability and growth.

High Leverage

High leverage can strain financial resources, limit operational flexibility, and increase vulnerability to economic downturns.

Negative Profitability Margins

Persistent negative profitability margins indicate operational inefficiencies and financial distress, threatening long-term viability.

Sincere Watch (Hong Kong) Business Overview & Revenue Model

Company Description

Sincere Watch (Hong Kong) Limited is a prominent luxury watch retailer and distributor based in Hong Kong. The company specializes in the distribution and retailing of luxury timepieces, offering an extensive range of prestigious watch brands to a discerning clientele. Sincere Watch (Hong Kong) operates through a network of retail outlets and has established a strong presence in the luxury watch market, catering to the tastes and preferences of high-end consumers.

How the Company Makes Money

Sincere Watch (Hong Kong) makes money primarily through the retail and distribution of luxury watches. The company's revenue streams include sales from its network of retail stores, where it sells luxury timepieces directly to consumers. Additionally, Sincere Watch (Hong Kong) generates income from its distribution business, supplying watches to other retailers. Key factors contributing to its earnings include exclusive distribution rights for certain prestigious watch brands, a well-established brand reputation, and strategic partnerships with luxury watch manufacturers. The company's ability to attract affluent customers and maintain strong relationships with watchmakers plays a critical role in its financial success.

Sincere Watch (Hong Kong) Financial Statement Overview

Summary

Sincere Watch (Hong Kong) is facing significant financial challenges. The income statement reflects a significant decline in revenue and negative profitability margins, with a score of 20. The balance sheet reveals high leverage and poor equity returns, scoring 25. Cash flow analysis shows modest improvements but ongoing struggles, scoring 40. Overall, the financial statements indicate financial instability and potential solvency issues.

Income Statement

The company has experienced a significant decline in revenue over the past few years, with a negative revenue growth rate of 19.2% from 2023 to 2024. The gross profit margin is negative, indicating the cost of goods sold exceeds revenues. Net profit margin is also negative at -156.7%, highlighting consistent losses. Both EBIT and EBITDA margins are significantly negative, reflecting operational inefficiencies and financial distress.

Balance Sheet

The balance sheet reveals high leverage with a debt-to-equity ratio of 11.31, indicating significant reliance on debt financing. Stockholders' equity has decreased dramatically, compromising the equity ratio to 5.7%. Return on Equity is highly negative at -616.9%, reflecting poor returns for shareholders due to ongoing losses. Overall, the balance sheet indicates financial instability and potential solvency issues.

Cash Flow

Cash flow analysis shows a modest improvement in free cash flow from negative to positive, indicating some operational control. However, the free cash flow growth rate is 159.0%, and the operating cash flow to net income ratio of -0.04 indicates ongoing struggles in turning revenue into cash flow. The free cash flow to net income ratio is 0.03, suggesting limited capacity to cover net losses with free cash flow.

Breakdown	TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement
Total Revenue	71.13M	125.65M	98.21M	148.72M	136.36M	261.77M
Gross Profit	-12.97M	-19.03M	18.43M	56.84M	21.16M	92.58M
EBITDA	-133.42M	-166.56M	-228.63M	-102.80M	-155.55M	-83.54M
Net Income	-216.72M	-196.90M	-184.42M	-156.82M	-210.30M	-142.31M
Balance Sheet
Total Assets	812.56M	555.88M	840.64M	1.02B	1.17B	1.24B
Cash, Cash Equivalents and Short-Term Investments	25.19M	41.03M	52.77M	72.67M	95.06M	87.73M
Total Debt	368.10M	361.00M	371.20M	367.23M	347.08M	251.49M
Total Liabilities	851.85M	523.13M	509.11M	471.33M	440.38M	380.82M
Stockholders Equity	-40.20M	31.92M	331.92M	546.88M	725.64M	857.61M
Cash Flow
Free Cash Flow	17.71M	5.16M	-8.75M	6.69M	-70.03M	-63.00M
Operating Cash Flow	12.56M	8.12M	11.01M	14.59M	-51.97M	-57.02M
Investing Cash Flow	-19.43M	-8.48M	-7.30M	-3.35M	-35.57M	54.20M
Financing Cash Flow	-51.98M	-17.94M	-35.15M	-29.98M	120.76M	-31.71M

Sincere Watch (Hong Kong) Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.01
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Neutral
• RSI: Negative
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0444, the sentiment is Negative. The current price of 0.01 is below the 20-day moving average (MA) of 0.01, below the 50-day MA of 0.01, and below the 200-day MA of 0.01, indicating a bearish trend. The MACD of >-0.01 indicates Neutral momentum. The RSI at 100.00 is Negative, neither overbought nor oversold. The STOCH value of 0.00 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:0444.

Sincere Watch (Hong Kong) Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0280	73 Outperform	HK$472.84M	5.36	11.34%	5.88%	14.52%	15.74%
0398	70 Outperform	$1.69B	9.27	10.00%	10.26%	-9.00%	-21.55%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
3389	55 Neutral	$550.50M	―	-1.15%	―	-41.44%	-209.76%
0084	46 Neutral	HK$75.22M	-0.70	-10.19%	―	-13.06%	-120.76%
1856	45 Neutral	HK$655.67M	-10.19	-51.81%	―	-20.65%	-616.18%
0444	38 Underperform	HK$60.44M	―	―	―	―	―