China Foods Limited (0506) AI Stock Analysis

• Market Cap: HK$9.01B
• Dividend Yield: 5.16%
• Average Volume (3M): 1.44M
• Price to Earnings (P/E): 9.7
• Beta (1Y): 0.33
• Revenue Growth: -2.10%
• EPS Growth: 0.33%
• Country: HK
• Employees: 17,533
• Sector: Consumer Defensive
• Sector Strength: 55
• Industry: Beverages - Non-Alcoholic
• EPS (TTM): 0.33
• Shares Outstanding: 2,797,223,400
• 10 Day Avg. Volume: 1,881,848
• 30 Day Avg. Volume: 1,442,121
• PEG Ratio: 0.81
• Price to Book (P/B): 1.16
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 5.63
• 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: 78 Outperform
• Price Target: HK$3.50 ▲(7.69%Upside)

China Foods Limited is a fundamentally sound company with strong financial performance and an attractive valuation. The technical analysis suggests bullish momentum, though caution is advised due to potential overbought conditions. The absence of operating cash flow is a significant risk that tempers the overall score.

China Foods Limited Business Overview & Revenue Model

Company Description

China Foods Limited (0506) is a prominent player in the food and beverage industry, primarily operating within the sectors of wine, beverage, and confectionery in China. As a subsidiary of COFCO Corporation, one of China's largest state-owned enterprises, China Foods Limited leverages its extensive distribution network to market and sell a wide range of products, including wines, spirits, soft drinks, and chocolates. The company is dedicated to delivering high-quality, trusted brands to consumers across the region, with a focus on expanding its market presence and enhancing brand recognition.

How the Company Makes Money

China Foods Limited generates revenue through the sale of its diverse product portfolio, which includes alcoholic beverages such as wine and spirits, as well as non-alcoholic beverages and confectionery items. The company's key revenue streams are derived from its well-established brands and its strategic partnerships with international and domestic suppliers. China Foods Limited benefits from its robust distribution network, which ensures efficient product delivery across the vast Chinese market. Additionally, the company's affiliation with COFCO Corporation provides significant leverage in terms of resources and market insights, aiding in the effective execution of its sales and marketing strategies, thereby driving revenue growth.

China Foods Limited Financial Statement Overview

Summary

China Foods Limited exhibits strong financial health with solid profitability and a stable balance sheet. The income statement highlights consistent profitability, while the balance sheet shows low leverage risks. However, the recent decline in operating cash flow is a concern that needs addressing to maintain financial stability.

Income Statement

China Foods Limited has demonstrated consistent revenue growth over the years with a healthy gross profit margin of 37.8% and a net profit margin of 4.0% for 2024. The EBIT margin stands at 8.7%, and EBITDA margin at 12.2%, indicating operational efficiency. However, the revenue growth rate from 2023 to 2024 is modest at 0.2%, suggesting potential challenges in accelerating top-line growth.

Balance Sheet

The company maintains a strong balance sheet with a low debt-to-equity ratio of 0.01, reflecting minimal leverage risk. The equity ratio is a solid 36.7%, indicating a strong equity base relative to total assets. Return on Equity (ROE) is robust at 13.3%, showcasing effective utilization of shareholder funds.

Cash Flow

Cash flow analysis shows some concerns, as operating cash flow has dropped to zero in 2024. Historical free cash flow was positive, but the absence of current data prevents a complete assessment. The company should focus on restoring operating cash flow to sustain its financial health.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	21.49B	21.45B	20.97B	19.78B	17.25B
Gross Profit	8.12B	7.54B	7.50B	7.06B	6.83B
EBITDA	2.61B	2.52B	2.19B	1.89B	1.81B
Net Income	860.53M	832.58M	659.84M	572.41M	498.73M
Balance Sheet
Total Assets	17.60B	16.23B	15.06B	15.17B	15.11B
Cash, Cash Equivalents and Short-Term Investments	4.02B	2.55B	1.11B	1.68B	1.90B
Total Debt	85.58M	79.38M	0.00	0.00	20.00M
Total Liabilities	7.40B	6.54B	6.20B	6.78B	7.03B
Stockholders Equity	6.46B	6.02B	5.52B	5.16B	4.95B
Cash Flow
Free Cash Flow	2.07B	1.80B	259.17M	360.41M	1.65B
Operating Cash Flow	2.85B	2.43B	1.14B	1.07B	2.21B
Investing Cash Flow	-560.83M	-564.43M	-851.23M	-846.64M	-374.88M
Financing Cash Flow	-564.93M	-609.65M	-844.13M	-496.06M	-813.82M

China Foods Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3.25
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0506, the sentiment is Positive. The current price of 3.25 is above the 20-day moving average (MA) of 2.99, above the 50-day MA of 2.98, and above the 200-day MA of 2.62, indicating a bullish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 78.01 is Negative, neither overbought nor oversold. The STOCH value of 91.47 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0506.

China Foods Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0506	78 Outperform	HK$9.01B	9.65	13.82%	5.16%	-2.10%	0.33%
9633	76 Outperform	HK$451.55B	34.35	39.94%	2.07%	-1.32%	-1.49%
0220	75 Outperform	HK$40.73B	20.31	13.80%	4.95%	3.98%	8.64%
1475	71 Outperform	HK$7.18B	37.19	5.15%	1.40%	3.95%	-42.81%
0345	66 Neutral	$9.97B	42.37	7.71%	1.73%	2.95%	86.94%
Sector *	60 Neutral	HK$17.56B	11.08	0.20%	5.34%	2.68%	-48.29%
1117	44 Neutral	HK$8.13B	―	-13.67%	1.27%	-3.39%	-868.11%

China Foods Limited Corporate Events

China Foods Limited Updates Nomination Committee

China Foods Limited has announced a change in the composition of its nomination committee to align with the revised Corporate Governance Code effective from July 2025. Ms. Leung Ka Lai, Ada, an independent non-executive director, has been appointed to the committee, bringing her extensive experience and professionalism to enhance the Board’s diversity.

The most recent analyst rating on (HK:0506) stock is a Hold with a HK$3.40 price target. To see the full list of analyst forecasts on China Foods Limited stock, see the HK:0506 Stock Forecast page.

China Foods Limited Announces Board Composition and Governance Structure

China Foods Limited has announced the composition of its board of directors, which includes a mix of executive, non-executive, and independent non-executive directors. The board is structured with various committees such as Audit, Remuneration, Nomination, Environmental, Social and Governance, and Executive Committees, each with designated chairpersons and members. This announcement reflects the company’s commitment to maintaining a robust governance structure, which is crucial for its strategic direction and operational oversight. The diverse roles and functions of the board members are expected to enhance decision-making processes and ensure adherence to corporate governance standards.

The most recent analyst rating on (HK:0506) stock is a Hold with a HK$3.40 price target. To see the full list of analyst forecasts on China Foods Limited stock, see the HK:0506 Stock Forecast page.

China Foods Limited Updates Nomination Committee Terms

China Foods Limited has updated the terms of reference for its Nomination Committee, a key governance body within the company. This update, the first since 2012, outlines the committee’s constitution, objectives, membership, and procedures, reflecting a commitment to enhanced corporate governance. The changes are expected to streamline the committee’s operations and improve decision-making processes, potentially impacting the company’s strategic direction and stakeholder engagement.

The most recent analyst rating on (HK:0506) stock is a Hold with a HK$3.40 price target. To see the full list of analyst forecasts on China Foods Limited stock, see the HK:0506 Stock Forecast page.

China Foods Limited Declares Final Dividend for 2024

China Foods Limited has announced a final cash dividend of RMB 0.153 per share for the financial year ending December 31, 2024, with the payment to be made in Hong Kong dollars at an exchange rate of RMB 1 to HKD 1.0859. The dividend will be paid on July 9, 2025, following shareholder approval on June 11, 2025, and is subject to a 10% withholding tax for non-resident enterprises.

The most recent analyst rating on (HK:0506) stock is a Hold with a HK$3.40 price target. To see the full list of analyst forecasts on China Foods Limited stock, see the HK:0506 Stock Forecast page.

China Foods Limited AGM Resolutions Approved by Shareholders

China Foods Limited announced that all resolutions proposed at its Annual General Meeting on June 11, 2025, were approved by shareholders. These resolutions included the adoption of financial statements, the declaration of a final dividend, the election of a new executive director, and the reappointment of the company’s auditor. The approval of these resolutions reflects strong shareholder support and is likely to positively impact the company’s governance and financial strategies moving forward.

The most recent analyst rating on (HK:0506) stock is a Hold with a HK$3.40 price target. To see the full list of analyst forecasts on China Foods Limited stock, see the HK:0506 Stock Forecast page.

China Foods Limited Announces 2025 AGM and Key Resolutions

China Foods Limited has announced its upcoming Annual General Meeting (AGM) to be held electronically on June 11, 2025. Key resolutions include the adoption of the 2024 financial statements, declaration of a final dividend, election of a new executive director, and re-appointment of the company’s auditor. Additionally, the company seeks approval to authorize directors to issue additional shares, which could impact the company’s capital structure and shareholder value.