Tradelink Electronic Commerce Limited (0536) AI Stock Analysis

• Market Cap: HK$850.26M
• Dividend Yield: 9.81%
• Average Volume (3M): 674.60K
• Price to Earnings (P/E): 10.2
• Beta (1Y): 0.17
• Revenue Growth: -6.93%
• EPS Growth: -18.99%
• Country: HK
• Employees: 223
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 0.05
• Shares Outstanding: 794,633,700
• 10 Day Avg. Volume: 723,400
• 30 Day Avg. Volume: 674,600
• PEG Ratio: -0.39
• Price to Book (P/B): 1.93
• Price to Sales (P/S): 2.96
• P/FCF Ratio: 10.65
• 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: 72 Outperform
• Price Target: HK$1.00 ▼(-3.85% Downside)

Tradelink Electronic Commerce Limited demonstrates strong financial health with robust profitability and minimal leverage, contributing significantly to its score. The attractive valuation, with a low P/E ratio and high dividend yield, further supports the stock's appeal. However, the technical indicators suggest a neutral market sentiment, which slightly tempers the overall score.

Positive Factors

Financial Stability

Tradelink's minimal leverage and strong equity position enhance its financial stability, providing resilience against economic fluctuations.

Profitability

A strong gross profit margin indicates effective cost management and pricing power, supporting long-term profitability.

Cash Flow Management

Efficient cash conversion ensures liquidity and the ability to reinvest in growth opportunities, supporting sustainable operations.

Negative Factors

Revenue Decline

Declining revenue growth may indicate challenges in market demand or competitive pressures, potentially impacting future earnings.

Asset Reduction

A reduction in assets and equity can signal weakening financial health, limiting the company's ability to invest in growth.

Decreasing Free Cash Flow

Decreasing free cash flow may limit the company's ability to fund new projects or return capital to shareholders, affecting long-term growth.

Tradelink Electronic Commerce Limited Business Overview & Revenue Model

Company Description

Tradelink Electronic Commerce Limited, together with its subsidiaries, provides government electronic trading services (GETS) for processing official trade-related documents in Hong Kong. It operates through three segments: E-commerce, Identity Management, and Other Services. The company's GETS and related services include import and export trade declaration, dutiable commodities permit, certificate of origin, electronic cargo manifest, importer security filing, advance filing rules, automated manifest, compliance, freight quotation, insurance-link, and paper-to-electronic conversion services, as well as road cargo solutions. It also provides supply chain solutions, which includes digital warehousing, distributed order management, transport and distribution, and supplier/vendor management capabilities, as well as Internet-of-Things solutions for asset tracking of logistics and inventory; and value added services, such as electronic data interchange integration service, order management system, and eShop module. In addition, the company offers identity management solutions, including biometric authentication, facial recognition, digital certificate, and eKYC solutions. Further, it provides paytech solutions, such as one-stop payment services from sourcing to customer support; value-added payment applications; and smart products that include smart PoS, cashless payment reader, vending machine, and self-service kiosk. Additionally, the company offers electronic messages, technical support, training, and other project services; certificate authority services; electronic messaging routing and transformation services; and e-commerce and e-logistics services. It serves government and utility, trade and logistics, banking and financial, retail and hospitality, and other industries. Tradelink Electronic Commerce Limited was incorporated in 1988 and is based in Kwai Chung, Hong Kong.

How the Company Makes Money

Tradelink generates revenue primarily through its electronic services and solutions offered to various stakeholders in the logistics and trade industries. Key revenue streams include fees for electronic document submissions, subscription fees for access to its online platforms, and service charges for customized solutions tailored to specific client needs. Additionally, the company may benefit from strategic partnerships with government bodies and trade organizations, which can enhance its service offerings and expand its customer base. The growth of e-commerce and increasing demand for digitized trade processes also contribute significantly to Tradelink's earnings.

Tradelink Electronic Commerce Limited Financial Statement Overview

Summary

Tradelink Electronic Commerce Limited presents a strong financial position with robust profitability and efficient cash flow management. The minimal leverage adds to its financial stability, though the declining revenue growth and slight reduction in free cash flow highlight areas that may need strategic focus.

Income Statement

Tradelink Electronic Commerce Limited has shown consistent profitability with a healthy gross profit margin of approximately 43.2% in 2024. However, the revenue has experienced a decline over the past year with a revenue growth rate of -7.1%, which is a concern. The company maintains strong net profit and EBIT margins at 33.1% and 27.2% respectively, indicating operational efficiency.

Balance Sheet

The company has a very low debt-to-equity ratio of 0.004, suggesting minimal financial leverage and a strong equity position. With a high equity ratio of 70.6%, Tradelink displays robust financial stability. However, the decline in total assets and stockholders' equity from the previous year warrants attention.

Cash Flow

Tradelink has shown a strong free cash flow to net income ratio of 0.84, indicating efficient cash conversion. However, the free cash flow has decreased from the previous year by 4.6%, reflecting a potential area of concern. The operating cash flow to net income ratio remains stable at 0.95, showcasing solid cash generation from operations.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	246.02M	247.63M	266.61M	258.81M	273.82M	261.21M
Gross Profit	106.09M	107.07M	112.62M	113.56M	120.24M	107.51M
EBITDA	73.24M	81.09M	119.27M	88.57M	99.47M	92.87M
Net Income	83.04M	81.96M	100.64M	52.33M	73.65M	72.80M
Balance Sheet
Total Assets	530.47M	536.14M	545.58M	532.56M	564.53M	586.25M
Cash, Cash Equivalents and Short-Term Investments	453.34M	453.05M	444.70M	436.52M	440.57M	394.24M
Total Debt	1.19M	1.51M	1.47M	884.00K	1.20M	2.42M
Total Liabilities	160.66M	157.34M	169.38M	168.15M	185.90M	201.92M
Stockholders Equity	369.81M	378.80M	376.20M	364.41M	378.63M	384.33M
Cash Flow
Free Cash Flow	75.03M	68.77M	72.09M	61.23M	99.20M	74.72M
Operating Cash Flow	84.48M	78.22M	85.75M	66.94M	107.16M	81.36M
Investing Cash Flow	-140.76M	-197.59M	-86.35M	205.84M	42.05M	-41.30M
Financing Cash Flow	-81.47M	-80.68M	-89.61M	-67.04M	-81.12M	-68.30M

Tradelink Electronic Commerce Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.04
• 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:0536, the sentiment is Positive. The current price of 1.04 is above the 20-day moving average (MA) of 1.04, above the 50-day MA of 1.03, and above the 200-day MA of 0.96, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 75.69 is Negative, neither overbought nor oversold. The STOCH value of 83.33 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0536.

Tradelink Electronic Commerce Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0536	72 Outperform	HK$850.26M	10.24	23.35%	9.81%	-6.93%	-18.99%
1450	64 Neutral	HK$1.53B	26.32	11.90%	―	-1.52%	-67.16%
1808	62 Neutral	HK$685.69M	6.41	27.53%	―	421.56%	328.43%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
8148	48 Neutral	HK$1.70B	-299.19	-31.21%	―	1.55%	39.81%
9600	47 Neutral	HK$198.20M	-1.80	-14.03%	―	15.44%	10.57%
6610	40 Underperform	HK$189.49M	-0.55	-16.28%	―	-15.20%	-206.59%

Tradelink Electronic Commerce Limited Corporate Events

Tradelink Enhances Governance with New Audit Committee Terms

Tradelink Electronic Commerce Limited has announced the terms of reference for its Audit and Governance Committee, emphasizing the importance of maintaining objectivity and credibility in financial reporting and adhering to corporate governance standards. The committee, comprising mainly independent non-executive directors, is tasked with ensuring compliance with the Corporate Governance Code and upholding good governance practices, which could strengthen the company’s industry positioning and stakeholder confidence.

The most recent analyst rating on (HK:0536) stock is a Buy with a HK$1.00 price target. To see the full list of analyst forecasts on Tradelink Electronic Commerce Limited stock, see the HK:0536 Stock Forecast page.