Perennial International (0725) AI Stock Analysis

• Market Cap: HK$155.19M
• Dividend Yield: 6.49%
• Average Volume (3M): 22.33K
• Price to Earnings (P/E): 4.3
• Beta (1Y): 0.08
• Revenue Growth: 25.46%
• EPS Growth: 68.29%
• Country: HK
• Employees: 880
• Sector: Industrials
• Sector Strength: 72
• Industry: Electrical Equipment & Parts
• EPS (TTM): 0.09
• Shares Outstanding: 198,958,000
• 10 Day Avg. Volume: 27,200
• 30 Day Avg. Volume: 22,333
• PEG Ratio: 0.07
• Price to Book (P/B): 0.28
• Price to Sales (P/S): 0.36
• P/FCF Ratio: 7.30
• 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: 74 Outperform
• Price Target: HK$0.50 ▼(-37.50% Downside)

Perennial International's overall stock score is driven by its strong financial performance and attractive valuation. The company's solid revenue growth, improved profitability, and low leverage are significant strengths. The technical analysis indicates strong momentum, but the overbought RSI suggests caution. The low P/E ratio and high dividend yield further enhance the stock's appeal, although the lack of earnings call data limits additional insights.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term expansion and stability.

Balance Sheet Health

A robust balance sheet with low debt levels provides financial stability and flexibility, enabling the company to invest in growth opportunities.

Profitability Improvement

Improving profitability margins suggest efficient cost management and pricing strategies, enhancing long-term earnings potential.

Negative Factors

Declining Free Cash Flow

Declining free cash flow growth could limit the company's ability to reinvest in its business and meet financial obligations, impacting future growth.

Cash Flow Conversion

Lower cash flow conversion suggests potential inefficiencies in cash management, which could affect liquidity and investment capacity.

Free Cash Flow Concerns

Sustained decline in free cash flow growth may hinder the company's ability to fund operations and strategic initiatives, posing a risk to financial health.

Perennial International Business Overview & Revenue Model

Company Description

Perennial International Limited, an investment holding company, engages in the manufacturing and trading of electric cables and wire products. It offers wire harnesses, power cords, power cord sets, cables and solid wires, and plastic resins and compounds. The company is also involved in the property license holding activities. It serves multi-national producers of electrical and electronic products primarily in the United States, Europe, Australia, Mainland China, Japan, and Southeast Asia. The company was founded in 1989 and is headquartered in Tsim Sha Tsui, Hong Kong. Perennial International Limited is a subsidiary of Spector Holdings Limited.

How the Company Makes Money

Perennial International generates revenue primarily through its logistics services, which include freight forwarding fees, warehousing charges, and customs brokerage services. The company charges clients based on the volume and type of goods being transported, as well as the complexity of logistics required. Key revenue streams come from long-term contracts with major corporations, which provide a steady income base. Additionally, the company may benefit from strategic partnerships with shipping lines and airlines, allowing for competitive pricing and enhanced service offerings. Seasonal fluctuations in demand for logistics services also contribute to earnings, particularly during peak shipping seasons.

Perennial International Financial Statement Overview

Summary

Perennial International exhibits strong financials with good revenue growth, improved profitability, and a solid balance sheet with low leverage. However, the declining trend in free cash flow growth could be a potential risk.

Income Statement

Perennial International shows positive revenue growth with a 8.25% increase from 2023 to 2024. The gross profit margin remains solid at 28.74%, up from 28.48% in 2023. Net profit margin improved significantly to 7.85% from 5.19%, indicating enhanced profitability. EBIT and EBITDA margins are also healthy at 9.01% and 12.54%, respectively. Overall, the income statement reflects strong revenue growth and improving profitability.

Balance Sheet

The debt-to-equity ratio is extremely low, indicating minimal leverage risk. The company has a high equity ratio of 87.01%, suggesting strong financial stability with a solid equity base. Return on equity is at 5.98%, which is a decent return for the shareholders. The balance sheet is robust, with strong equity and low debt levels, providing a solid foundation for future growth.

Cash Flow

Free cash flow growth was negative, declining from 2023's level. The operating cash flow to net income ratio is 0.84, demonstrating good cash generation relative to net income. The free cash flow to net income ratio is 0.63, indicating that not all net income is translating into free cash flow. While cash flow generation is solid, the decline in free cash flow growth is a concern.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	388.89M	328.58M	303.53M	324.52M	373.47M	282.34M
Gross Profit	115.28M	94.41M	86.43M	79.39M	79.92M	52.77M
EBITDA	50.96M	38.59M	28.28M	34.59M	37.27M	308.00K
Net Income	35.70M	25.80M	15.75M	18.51M	13.69M	-19.23M
Balance Sheet
Total Assets	514.90M	495.98M	454.85M	661.83M	727.73M	685.98M
Cash, Cash Equivalents and Short-Term Investments	47.62M	61.01M	46.72M	21.05M	19.31M	22.37M
Total Debt	0.00	47.00K	501.00K	22.85M	74.90M	45.80M
Total Liabilities	67.86M	64.33M	45.33M	95.73M	158.68M	136.70M
Stockholders Equity	447.05M	431.65M	409.52M	566.11M	569.06M	549.28M
Cash Flow
Free Cash Flow	-14.27M	16.35M	54.27M	58.24M	-32.31M	8.05M
Operating Cash Flow	-9.74M	21.66M	58.53M	59.92M	-23.10M	24.92M
Investing Cash Flow	9.51M	-3.04M	-11.30M	-1.62M	-8.40M	-16.80M
Financing Cash Flow	-10.21M	-4.38M	-29.19M	-56.03M	28.20M	-23.16M

Perennial International Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.80
• 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:0725, the sentiment is Positive. The current price of 0.8 is above the 20-day moving average (MA) of 0.76, above the 50-day MA of 0.77, and above the 200-day MA of 0.71, indicating a bullish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 57.51 is Neutral, neither overbought nor oversold. The STOCH value of 71.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0725.

Perennial International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0725	74 Outperform	HK$155.19M	4.35	8.30%	6.49%	25.46%	68.29%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
1710	63 Neutral	HK$210.00M	10.66	5.04%	7.47%	4.01%	―
1166	54 Neutral	HK$113.97M	-0.65	-20.57%	―	-27.26%	-60.80%
1539	52 Neutral	HK$912.69M	19.92	14.19%	―	11.61%	287.50%
1750	52 Neutral	HK$151.20M	28.33	3.18%	―	5.80%	57.89%
1399	51 Neutral	HK$232.17M	-6.72	-2.96%	―	-11.18%	-180.05%