Emperor Watch & Jewellery (0887) AI Stock Analysis

• Market Cap: HK$1.67B
• Dividend Yield: 4.05%
• Average Volume (3M): 8.49M
• Price to Earnings (P/E): 6.0
• Beta (1Y): 0.43
• Revenue Growth: 6.60%
• EPS Growth: -14.32%
• Country: HK
• Employees: 876
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Luxury Goods
• EPS (TTM): 0.03
• Shares Outstanding: 7,256,708,000
• 10 Day Avg. Volume: 8,212,550
• 30 Day Avg. Volume: 8,485,450
• PEG Ratio: -0.31
• Price to Book (P/B): 0.22
• Price to Sales (P/S): 0.22
• P/FCF Ratio: 1.63
• 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
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: HK$0.28 ▲(21.30% Upside)

Emperor Watch & Jewellery's strong financial performance and attractive valuation are offset by weak technical indicators. The stock is fundamentally sound with robust cash flow and low leverage, but current market sentiment is bearish, as indicated by technical analysis.

Positive Factors

Revenue Growth

The consistent revenue growth indicates strong demand for luxury products and effective sales strategies, supporting long-term business expansion.

Cash Generation

Strong cash generation enhances financial flexibility, enabling the company to invest in growth opportunities and weather economic fluctuations.

Financial Stability

A high equity ratio indicates financial stability and low reliance on debt, reducing risk and providing a solid foundation for future growth.

Negative Factors

Net Profit Margin Pressure

Declining net profit margins suggest challenges in maintaining profitability, which could impact long-term earnings if not addressed.

Modest Return on Equity

A modest return on equity indicates potential inefficiencies in utilizing shareholder funds, which could limit growth and investor returns.

Market Sentiment

Bearish market sentiment may reflect broader industry challenges or investor concerns, potentially affecting stock performance and capital raising.

Emperor Watch & Jewellery Business Overview & Revenue Model

Company Description

Emperor Watch & Jewellery Limited, an investment holding company, engages in the sale of watches and jewelry products. It is involved in retailing European-made watches and self-designed fine jewelry products under the Emperor Jewellery brand name. As of December 31, 2021, the company operated 99 stores in Hong Kong, Macau, Mainland China, Singapore, and Malaysia. It sells its products through self-branded stores, watch boutiques, and multi-brand watch stores, as well as through an online shopping platform. The company was founded in 1942 and is based in Wanchai, Hong Kong. Emperor Watch & Jewellery Limited is a subsidiary of Emperor Watch & Jewellery Group Holdings Limited.

How the Company Makes Money

The company generates revenue through multiple streams, primarily by selling luxury watches and jewellery at retail prices. Key revenue sources include direct sales from their physical stores and e-commerce platform, where they offer a wide range of high-end brands. Additionally, Emperor Watch & Jewellery may benefit from exclusive partnerships with luxury watch brands, allowing them to offer limited editions or unique collections that can attract higher margins. The company may also engage in after-sales services such as maintenance, repairs, and customization, further contributing to its revenue. Seasonal promotions, loyalty programs, and strategic marketing practices also play a role in driving sales and enhancing customer retention, all of which are vital for sustaining profitability.

Emperor Watch & Jewellery Financial Statement Overview

Summary

Emperor Watch & Jewellery exhibits strong financial health characterized by consistent revenue growth, robust cash flow generation, and low leverage. However, slight pressure on net profit margins and modest return on equity indicate areas for potential improvement.

Income Statement

Emperor Watch & Jewellery demonstrated consistent revenue growth, with a 8.45% increase from 2023 to 2024. Their gross profit margin is stable at approximately 28.3%, and the net profit margin slightly decreased to 4.9% in 2024. EBIT and EBITDA margins remain healthy at 6.5% and 9.2%, respectively, reflecting efficient cost management. However, the slight decline in net profit margin from 6.2% in 2023 to 4.9% in 2024 indicates some pressure on net income.

Balance Sheet

The company maintains a strong equity position with an equity ratio of 87.7% in 2024, indicating financial stability and low reliance on debt. The debt-to-equity ratio is low at 0.08, showcasing prudent financial management. Return on equity is modest at 4.9%, which suggests room for improving profitability using equity efficiently.

Cash Flow

Operating cash flow increased significantly to HKD 772 million in 2024, reflecting robust cash generation capabilities. Free cash flow also grew by 129.6%, indicating strong cash flow management. The operating cash flow to net income ratio is high at 3.01, suggesting efficient conversion of net income into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.43B	5.23B	4.82B	3.68B	3.93B	2.63B
Gross Profit	1.54B	1.48B	1.45B	1.18B	1.23B	840.06M
EBITDA	511.07M	760.00M	773.98M	637.98M	667.60M	452.04M
Net Income	268.50M	256.74M	299.22M	222.13M	204.69M	33.99M
Balance Sheet
Total Assets	6.43B	5.94B	5.71B	5.38B	5.35B	5.77B
Cash, Cash Equivalents and Short-Term Investments	1.51B	949.82M	619.65M	664.39M	556.34M	405.11M
Total Debt	416.15M	412.33M	304.63M	300.10M	416.91M	1.06B
Total Liabilities	769.08M	728.26M	661.68M	536.77M	629.47M	1.22B
Stockholders Equity	5.39B	5.21B	5.05B	4.85B	4.72B	4.55B
Cash Flow
Free Cash Flow	867.01M	692.87M	301.69M	568.34M	939.27M	560.91M
Operating Cash Flow	946.58M	769.08M	403.59M	605.58M	973.56M	576.84M
Investing Cash Flow	-435.90M	62.01M	-66.48M	-220.44M	-17.44M	10.02M
Financing Cash Flow	-92.39M	-375.06M	-344.38M	-466.27M	-808.60M	-427.26M

Emperor Watch & Jewellery Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.23
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0887, the sentiment is Negative. The current price of 0.23 is below the 20-day moving average (MA) of 0.24, below the 50-day MA of 0.26, and below the 200-day MA of 0.32, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 38.13 is Neutral, neither overbought nor oversold. The STOCH value of 40.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:0887.

Emperor Watch & Jewellery Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0590	77 Outperform	HK$14.24B	11.19	9.54%	4.43%	10.89%	2.02%
0398	70 Outperform	HK$1.79B	9.16	10.00%	9.67%	-9.00%	-21.55%
0887	69 Neutral	HK$1.67B	5.99	5.10%	4.05%	6.60%	-14.32%
1929	64 Neutral	HK$127.16B	21.47	23.74%	4.21%	-9.49%	32.56%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
0116	61 Neutral	HK$8.15B	6.84	9.13%	4.60%	-10.41%	67.25%
0256	48 Neutral	HK$844.27M	-2.60	-7.92%	―	-18.07%	-1041.89%

Emperor Watch & Jewellery Corporate Events

Emperor Watch & Jewellery Renews Consignment Agreement with Yeung Family

Emperor Watch & Jewellery has renewed its consignment agreement with the Yeung Family for 2026-2028, allowing the company to sell consigned items at its retail shops. This agreement is part of the company’s strategy to leverage connected transactions for profitability, with consignment values determined through market-based negotiations. The transactions are subject to specific regulatory requirements but do not require independent shareholder approval. The previous agreement’s annual caps were not exceeded, indicating effective management of consignment transactions.

The most recent analyst rating on (HK:0887) stock is a Hold with a HK$0.28 price target. To see the full list of analyst forecasts on Emperor Watch & Jewellery stock, see the HK:0887 Stock Forecast page.