7Road Holdings Limited (0797) AI Stock Analysis

• Market Cap: HK$1.87B
• Dividend Yield: N/A
• Average Volume (3M): 352.17K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.53
• Revenue Growth: -52.38%
• EPS Growth: 43.08%
• Country: HK
• Employees: 247
• Sector: Communication Services
• Sector Strength: 79
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): -0.03
• Shares Outstanding: 2,753,200,000
• 10 Day Avg. Volume: 365,000
• 30 Day Avg. Volume: 352,166
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: HK$1.00
• Price Target Upside: 42.86% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 47 Neutral
• Price Target: HK$0.50 ▼(-28.57% Downside)

The overall stock score is driven primarily by 7Road Holdings Limited's financial struggles, with declining revenues and profitability being major concerns. Technical indicators offer some support but are not strong enough to offset the weak financial and valuation metrics. The lack of earnings call data and notable corporate events means these factors do not contribute to the score.

7Road Holdings Limited Business Overview & Revenue Model

Company Description

7Road Holdings Limited (0797) is a global online gaming company primarily engaged in the development and operation of web-based and mobile games. The company is known for its popular games, which are distributed across various platforms, reaching a diverse audience worldwide. With a focus on innovation and user engagement, 7Road Holdings Limited leverages its expertise in game development to deliver immersive gaming experiences.

How the Company Makes Money

7Road Holdings Limited generates revenue through a free-to-play model, where users can access games without an initial cost but are encouraged to make in-game purchases for virtual goods, upgrades, and premium features. This microtransaction-based revenue model is the company's primary source of income. Additionally, the company may earn revenue through advertising partnerships, where ads are displayed within their games, and possible collaborations with other gaming or technology firms that expand their market reach and user base.

7Road Holdings Limited Financial Statement Overview

Summary

7Road Holdings Limited is navigating a period of financial difficulty, marked by declining revenues and profitability. Despite a strong balance sheet with low leverage, consistent net losses and declining cash flows suggest operational inefficiencies or adverse market conditions. The company needs to focus on stabilizing revenue streams and enhancing operational efficiency to improve financial health and investor confidence.

Income Statement

7Road Holdings Limited has faced significant challenges with declining revenues, dropping from HKD 627.7 million in 2023 to HKD 306.4 million in 2024. The gross profit margin remains solid at 69.3% for 2024, but the company posted negative net and EBIT margins at -23.97% and -19.72%, respectively, indicating operational struggles and insufficient revenue to cover expenses. Revenue growth has been negative, marking a steep decline of 51.2% from the previous year, pointing to potential market challenges or competitive pressures.

Balance Sheet

The company maintains a robust equity base with a strong equity ratio of 92.97%, reflecting a solid asset position relative to liabilities. The debt-to-equity ratio is low at 0.01, indicating minimal leverage, which reduces financial risk. However, the return on equity (ROE) is negative at -4.38%, due to ongoing net losses, which could impact investor confidence.

Cash Flow

Cash flow metrics reveal challenges, with no reported positive free cash flow in 2024, potentially impacting liquidity. The previous year's operating cash flow was strong at HKD 245 million, but the lack of recent cash flow data suggests a need for monitoring cash management closely. Operating cash flow to net income was positive in 2023, indicating effective cash generation relative to earnings, but the current lack of data poses uncertainty.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	306.40M	627.73M	540.63M	420.54M	424.31M
Gross Profit	212.28M	383.10M	261.20M	224.47M	313.48M
EBITDA	51.46M	74.13M	139.33M	218.44M	195.26M
Net Income	-73.45M	-146.46M	282.50M	94.24M	81.31M
Balance Sheet
Total Assets	1.80B	2.27B	2.65B	2.01B	2.11B
Cash, Cash Equivalents and Short-Term Investments	79.26M	67.82M	200.37M	152.18M	417.85M
Total Debt	23.46M	367.93M	408.40M	89.39M	64.88M
Total Liabilities	125.01M	519.99M	745.29M	387.12M	602.45M
Stockholders Equity	1.68B	1.75B	1.90B	1.61B	1.51B
Cash Flow
Free Cash Flow	47.34M	240.23M	63.25M	-244.41M	-40.56M
Operating Cash Flow	56.77M	245.40M	196.01M	175.13M	103.28M
Investing Cash Flow	33.52M	-219.80M	-338.33M	-369.79M	-63.06M
Financing Cash Flow	-76.97M	-82.50M	135.45M	-74.71M	295.72M

7Road Holdings Limited Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 0.70
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0797, the sentiment is Neutral. The current price of 0.7 is below the 20-day moving average (MA) of 0.76, above the 50-day MA of 0.68, and below the 200-day MA of 0.78, indicating a neutral trend. The MACD of -0.01 indicates Positive momentum. The RSI at 46.52 is Neutral, neither overbought nor oversold. The STOCH value of 6.82 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:0797.

7Road Holdings Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2660	70 Outperform	HK$2.57B	5.38	17.68%	6.22%	-21.05%	-42.14%
6633	60 Neutral	HK$2.42B	43.70	2.87%	―	-31.60%	―
Sector *	55 Neutral	HK$63.39B	-0.67	-4.21%	5.33%	-2.16%	-18.87%
3798	52 Neutral	HK$1.48B	18.03	-3.75%	8.47%	-23.76%	-116.47%
0302	51 Neutral	HK$1.62B	―	-43.81%	―	-27.68%	-11792.65%
0797	47 Neutral	HK$1.87B	―	-4.36%	―	-52.38%	43.08%
6820	42 Neutral	HK$1.55B	―	-4.15%	―	7.55%	64.78%

7Road Holdings Limited Corporate Events

7Road Holdings Limited Announces Positive Profit Turnaround

7Road Holdings Limited has issued a positive profit alert, indicating an expected net profit of approximately RMB29 million for the first half of 2025, a significant turnaround from a RMB6 million loss in the same period of 2024. This improvement is attributed to increased revenue from its online games, although the interim results are yet to be finalized and may differ from the preliminary figures.

7Road Holdings Announces Key Management Changes

7Road Holdings Limited, a company incorporated in the Cayman Islands, has announced a change in its joint company secretary, authorized representative, and process agent roles. Mr. Cheung Kai Cheong Willie has resigned from these positions, and Mr. Cheng Ching Kit has been appointed to fill them, effective from July 10, 2025. Mr. Cheng, an assistant vice president at SWCS Corporate Services Group, brings over 12 years of experience in the corporate secretarial field. This change is expected to enhance the company’s compliance with the Listing Rules and other applicable regulations, as Mr. Cheng will assist Mr. Yang Cheng, the current joint company secretary, in fulfilling these duties.

7Road Holdings Sells Partnership Interests for RMB394 Million

7Road Holdings Limited, through its indirect wholly-owned subsidiaries, has entered into agreements to sell its partnership interests in Hangzhou Haoli and Shanghai Chengying for a total consideration of RMB394 million. This transaction is classified as a discloseable transaction under the Hong Kong Stock Exchange’s Listing Rules, requiring reporting and announcement but not shareholder approval. The disposal will result in 7Road Holdings ceasing to hold any interests in these partnerships, potentially impacting its investment portfolio and financial strategy.

7Road Holdings Limited Successfully Passes All AGM Resolutions

7Road Holdings Limited announced that all proposed resolutions at its Annual General Meeting held on 20 May 2025 were passed by shareholders via poll. The resolutions included the adoption of financial statements, re-election of directors, and the re-appointment of auditors. Additionally, a mandate was given to the directors to issue additional shares, reflecting strong shareholder support and potentially impacting the company’s future strategic decisions.