Pan Asia Environmental Protection Group Ltd. (0556) AI Stock Analysis

• Market Cap: HK$732.60M
• Dividend Yield: N/A
• Average Volume (3M): 66.07K
• Price to Earnings (P/E): 43.5
• Beta (1Y): -0.24
• Revenue Growth: 9.77%
• EPS Growth: 165.63%
• Country: HK
• Employees: 89
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Pollution & Treatment Controls
• EPS (TTM): <0.01
• Shares Outstanding: 990,000,000
• 10 Day Avg. Volume: 53,600
• 30 Day Avg. Volume: 66,066
• PEG Ratio: 0.03
• Price to Book (P/B): 0.38
• Price to Sales (P/S): 1.78
• P/FCF Ratio: 13.83
• 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: 75 Outperform
• Price Target: HK$0.79 ▲(40.71% Upside)

The score is driven primarily by strong financial performance (improving growth, margins, balance sheet strength, and cash flow) and supportive technical momentum. This is partially offset by a high P/E valuation and no dividend yield data.

Positive Factors

Low leverage / strong balance sheet

Extremely low leverage and a high equity ratio provide durable financial flexibility: supports capital spending, bidding on public contracts, and withstands cyclical headwinds. This structural strength lowers refinancing risk and preserves strategic optionality over months to years.

Robust cash generation

Strong and improving free cash flow with efficient cash conversion creates a persistent funding source for growth, maintenance, and potential acquisitions. Reliable cash generation underpins capital allocation and reduces dependence on external financing over the medium term.

Improving revenue and margins

Sustained revenue growth with expanding gross and net margins indicates operational improvements and pricing or mix advantages. This trend supports durable profit growth prospects, enabling reinvestment into scale and technology in the core waste management and recycling businesses.

Negative Factors

Low return on equity

A low ROE suggests returns on invested capital remain modest despite profit gains; over time this can limit shareholder value creation and make it harder to justify reinvestment without scale gains or higher margin businesses, constraining long-term capital efficiency.

Small operational scale

A relatively small workforce and company scale can limit ability to pursue large municipal contracts, spread fixed costs, and invest in R&D or advanced treatment technologies. Over months this may constrain market share expansion and bargaining power versus larger incumbents.

Exposure to recyclables commodity cycles

Revenue dependence on recycled materials sales creates structural sensitivity to commodity price swings and global demand. Commodity-driven revenue volatility can compress margins and cash flow unpredictably, complicating long-term budgeting and investment planning.

Pan Asia Environmental Protection Group Ltd. Business Overview & Revenue Model

Company Description

Pan Asia Environmental Protection Group Limited, together with its subsidiaries, sells environmental protection (EP) products and equipment in the People's Republic of China. It operates through two segments, EP Products and Equipment, and EP Construction Engineering services. The company engages in the production of water treatment, flue gas treatment, and solid waste treatment equipment, components, and pipes; sale and installation of water treatment, flue gas treatment, and solid waste treatment equipment and pipes; and the contracting of water treatment, flue gas treatment, and solid waste treatment projects. It also undertakes EP construction engineering services. The company was founded in 1998 and is headquartered in Admiralty, Hong Kong.

How the Company Makes Money

Pan Asia Environmental Protection Group Ltd. generates revenue through multiple streams, primarily from its waste management and recycling services. The company charges fees for waste collection, processing, and disposal services provided to municipal and commercial clients. Additionally, it earns income from the sale of recycled materials, which contributes significantly to its revenue. The company may also engage in joint ventures or partnerships with local governments and businesses to enhance its service offerings and expand its market reach, further bolstering its financial performance. Overall, the combination of service fees and the sale of recyclables forms the core of its revenue model.

Pan Asia Environmental Protection Group Ltd. Financial Statement Overview

Summary

Strong overall fundamentals: revenue grew 14.1% (2023–2024), profitability improved (net margin to 6.9%), leverage is minimal (debt-to-equity 0.005), and cash generation is robust (free cash flow up 41.3% with strong cash conversion).

Income Statement

The company has shown a strong improvement in its revenue, with a revenue growth rate of 14.1% from 2023 to 2024. Gross profit margin increased to 14.4%, and net profit margin improved significantly to 6.9%. The EBIT and EBITDA margins also indicate enhanced operational efficiency. Overall, the income statement reflects a positive financial trajectory with improved profitability.

Balance Sheet

The balance sheet is strong, highlighted by a low debt-to-equity ratio of 0.005, indicating minimal leverage and financial risk. The company maintains a robust equity ratio of 88.6%, showcasing strong financial stability. Return on equity improved to 1.5%, reflecting enhanced shareholder value. The balance sheet indicates financial health and stability.

Cash Flow

The company has demonstrated robust cash flow management, with a 41.3% increase in free cash flow from 2023 to 2024, signifying strong cash generation. Operating cash flow to net income ratio is at 1.88, indicating efficient cash conversion. The free cash flow to net income ratio of 1.87 further underscores healthy cash flow dynamics. Overall, the cash flow statement is indicative of strong liquidity and cash generation capabilities.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	249.44M	251.51M	220.34M	155.57M	38.16M	39.39M
Gross Profit	33.69M	36.23M	28.43M	20.02M	2.95M	1.76M
EBITDA	30.54M	33.16M	12.71M	3.99M	-14.20M	-15.88M
Net Income	15.58M	17.25M	1.45M	-899.00K	8.30M	-29.35M
Balance Sheet
Total Assets	1.30B	1.32B	1.29B	1.25B	1.23B	1.27B
Cash, Cash Equivalents and Short-Term Investments	1.26B	1.26B	1.24B	1.20B	1.22B	1.22B
Total Debt	470.00K	5.89M	33.84M	47.89M	45.36M	47.40M
Total Liabilities	132.95M	151.02M	155.23M	131.98M	100.44M	145.93M
Stockholders Equity	1.17B	1.16B	1.14B	1.12B	1.13B	1.12B
Cash Flow
Free Cash Flow	27.85M	32.31M	22.85M	-32.16M	-9.94M	17.71M
Operating Cash Flow	27.72M	32.38M	22.98M	-32.14M	-9.94M	17.81M
Investing Cash Flow	2.88M	3.94M	2.28M	4.30M	4.43M	3.98M
Financing Cash Flow	-22.20M	-15.24M	7.85M	8.44M	7.80M	13.10M

Pan Asia Environmental Protection Group Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.56
• 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:0556, the sentiment is Positive. The current price of 0.56 is below the 20-day moving average (MA) of 0.66, above the 50-day MA of 0.55, and above the 200-day MA of 0.43, indicating a bullish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 67.66 is Neutral, neither overbought nor oversold. The STOCH value of 64.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0556.

Pan Asia Environmental Protection Group Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0556	75 Outperform	HK$732.60M	43.53	1.33%	―	9.77%	165.63%
1527	74 Outperform	HK$260.55M	2.81	9.21%	―	-11.01%	69.56%
2377	66 Neutral	HK$800.39M	3.11	8.32%	4.69%	8.09%	30.76%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
0436	52 Neutral	HK$203.39M	-12.18	-1.91%	2.46%	-5.95%	33.73%
1452	46 Neutral	HK$94.86M	-2.52	-24.77%	―	-0.22%	-22.16%
1845	46 Neutral	HK$213.33M	-3.88	-12.96%	―	-9.79%	-1187.50%

Pan Asia Environmental Protection Group Ltd. Corporate Events

Pan Asia Environmental Protection Steps Up AI Investment With RMB30.6 Million Asset Purchase

Pan Asia Environmental Protection Group Ltd., a provider of environmental protection products, equipment and engineering solutions, is deepening its strategic cooperation in mainland China through its wholly owned subsidiary Fanzhicheng and high-tech AI partner Chengdu Qingshu. The company has entered into an AI Assets Procurement Agreement under which Fanzhicheng will purchase AI-related assets and associated technical and engineering services from Chengdu Qingshu for RMB30.55 million, funded by internal resources, with delivery and installation scheduled within 30 and 60 days respectively. The deal, classified as a discloseable transaction under Hong Kong listing rules, signals Pan Asia’s move to integrate advanced AI and intelligent computing capabilities into its operations, potentially enhancing its technological infrastructure and positioning within the environmental solutions sector without materially altering its capital structure.

The most recent analyst rating on (HK:0556) stock is a Buy with a HK$0.71 price target. To see the full list of analyst forecasts on Pan Asia Environmental Protection Group Ltd. stock, see the HK:0556 Stock Forecast page.

Pan Asia Environmental Protection Revamps Top Leadership to Drive Sales-Focused Growth

Pan Asia Environmental Protection Group has overhauled its top leadership, appointing sales specialist Lin Jun as executive director and chairman, effective 29 December 2025, while moving former chairman Guo Jiannan into the role of vice chairman. At the same time, executive director and chief executive officer Zhu Duke Li has resigned, and Pan Chang has been named the new CEO, signaling a management reshuffle aimed at sharpening the group’s market expansion, sales conversion and multi-store operational capabilities, leveraging Lin’s track record in building large-scale sales networks and digitalised channel management to support the company’s future business development.

The most recent analyst rating on (HK:0556) stock is a Hold with a HK$0.64 price target. To see the full list of analyst forecasts on Pan Asia Environmental Protection Group Ltd. stock, see the HK:0556 Stock Forecast page.

Pan Asia Environmental Protection Updates Board and Committee Structure

Pan Asia Environmental Protection Group Limited has updated its board composition with effect from 29 December 2025, confirming Lin Jun as chairman, Guo Jiannan as vice chairman, and Pan Chang as chief executive officer, alongside three independent non-executive directors: Chen Xuezheng, Hu Jianjun and Leung Shu Sun, Sunny. The company has also detailed the membership of its Audit, Nomination and Remuneration Committees, assigning committee chairmanships and memberships among the directors, a move that clarifies governance responsibilities and reinforces the group’s corporate oversight framework for investors and other stakeholders.

The most recent analyst rating on (HK:0556) stock is a Hold with a HK$0.64 price target. To see the full list of analyst forecasts on Pan Asia Environmental Protection Group Ltd. stock, see the HK:0556 Stock Forecast page.

Pan Asia Environmental Protection Declares Special Dividend With Scrip Option

Pan Asia Environmental Protection Group Limited has declared a first tranche special dividend of HKD 0.12 per share, offering shareholders a cash dividend with an option to receive scrip shares, with the ex-dividend date set for 2 February 2026, record date on 5 February 2026, and payment on 26 March 2026. The move, which forms part of a broader update on dividend policy, on-market share repurchase intentions and business matters, signals an immediate return of capital to shareholders and may support the company’s capital management objectives and share price through the combination of special distribution and potential buybacks.

The most recent analyst rating on (HK:0556) stock is a Hold with a HK$0.64 price target. To see the full list of analyst forecasts on Pan Asia Environmental Protection Group Ltd. stock, see the HK:0556 Stock Forecast page.

Pan Asia Environmental Protection Declares Second Tranche Special Dividend of HKD 0.08 per Share

Pan Asia Environmental Protection Group Limited has declared a second tranche special cash dividend of HKD 0.08 per share, payable in Hong Kong dollars, with the ex-dividend date, record date, book closure period and payment date to be announced later. The move forms part of a broader announcement on dividend policy changes, intended on-market share repurchases and a business update, signalling an active capital management stance that may enhance shareholder returns and potentially support the company’s share price once the full details are released.

The most recent analyst rating on (HK:0556) stock is a Hold with a HK$0.64 price target. To see the full list of analyst forecasts on Pan Asia Environmental Protection Group Ltd. stock, see the HK:0556 Stock Forecast page.

Pan Asia Environmental Protection Unveils HK$1.4 Billion Capital Deployment Plan and Special Dividend

Pan Asia Environmental Protection Group has outlined a comprehensive capital deployment plan to be completed by 31 December 2026, leveraging its sizeable cash reserves of about RMB1.3 billion. The board has approved a cash special dividend of HK$0.12 per share, totalling approximately HK$118.8 million based on current shares in issue, and intends to allocate HK$200 million in total to special dividends, HK$100 million to on-market share repurchases, HK$84 million to repay amounts due to its controlling shareholder, HK$580 million to expand its principal business, HK$200 million for business diversification, and HK$220 million as general working capital. The package is aimed at enhancing shareholder returns, optimising the balance sheet and signalling a more active growth and capital management strategy, which could strengthen the company’s market positioning and potentially improve liquidity and valuation for existing investors.

The most recent analyst rating on (HK:0556) stock is a Hold with a HK$0.64 price target. To see the full list of analyst forecasts on Pan Asia Environmental Protection Group Ltd. stock, see the HK:0556 Stock Forecast page.

Pan Asia Environmental Protection Group to Consider Special Dividend

Pan Asia Environmental Protection Group Ltd. has announced a board meeting scheduled for December 24, 2025, to discuss the proposed declaration and payment of a special dividend. This announcement may impact the company’s financial strategy and shareholder returns, reflecting its commitment to delivering value to its stakeholders.

The most recent analyst rating on (HK:0556) stock is a Hold with a HK$0.50 price target. To see the full list of analyst forecasts on Pan Asia Environmental Protection Group Ltd. stock, see the HK:0556 Stock Forecast page.