Emperor Watch & Jewellery (0887) AI Stock Analysis

• Market Cap: HK$2.14B
• Dividend Yield: 4.05%
• Average Volume (3M): 8.49M
• Price to Earnings (P/E): 7.8
• Beta (1Y): 0.46
• 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: 77 Outperform
• Price Target: HK$0.36 ▲(57.83% Upside)

Overall score is driven primarily by strong financial stability (very low leverage) and robust cash flow generation, plus an attractive valuation (low P/E and solid dividend yield). These positives are moderated by technical overbought signals (RSI 78.54) and some pressure on profitability (net margin down; modest ROE).

Positive Factors

Strong balance sheet / low leverage

Very low leverage and a high equity ratio provide durable financial flexibility. This supports investment in stores, inventory and brand partnerships, cushions downturns, and reduces refinancing risk—strengths that sustain operations and strategic moves over the medium term.

Robust cash generation

Strong operating and free cash flow indicate efficient cash conversion and funding capacity. Durable cash generation underpins dividend payments, inventory funding and selective reinvestment without relying on debt, improving resilience across luxury retail cycles for months ahead.

Consistent revenue growth with stable gross margins

Steady top-line growth and stable gross margins signal persistent consumer demand and pricing power in the luxury segment. Healthy operating margins show operational control, supporting sustainable profitability and capacity to invest in customer experience and brand positioning over the medium term.

Negative Factors

Net profit margin compression

A falling net margin suggests increasing SG&A, promotional intensity, or rising costs that erode bottom-line returns. If structural, sustained margin pressure could limit retained earnings and reduce the firm's ability to reinvest or expand, weighing on medium-term profitability.

Modest return on equity

ROE near 5% indicates the company generates limited returns on shareholders' capital despite a strong equity base. Over months, this suggests capital may be underutilized or invested in low-return activities, constraining long-term shareholder value unless operational efficiency improves.

Wide gross-to-net margin gap

A large spread between gross and net margins points to a substantial operating or non-operating cost burden (rent, SG&A, after-sales). Structurally high cost base can limit scalability and make profits sensitive to sales volatility, posing a medium-term profitability risk.

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

Solid fundamentals supported by revenue growth (+8.45% YoY) and strong cash generation (operating cash flow HKD 772M; operating cash flow to net income 3.01). Balance sheet is a key strength with very low leverage (debt-to-equity 0.08; equity ratio 87.7%). Main offset is profitability pressure, with net margin down to 4.9% and modest ROE (4.9%).

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: Positive
• Last Price: 0.23
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• 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 Positive. The current price of 0.23 is below the 20-day moving average (MA) of 0.25, below the 50-day MA of 0.25, and below the 200-day MA of 0.32, indicating a neutral trend. The MACD of 0.01 indicates Negative momentum. The RSI at 65.52 is Neutral, neither overbought nor oversold. The STOCH value of 55.08 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:0887.

Emperor Watch & Jewellery Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0887	77 Outperform	HK$2.14B	7.82	5.10%	4.05%	6.60%	-14.32%
0590	73 Outperform	HK$18.87B	14.69	9.54%	4.43%	10.89%	2.02%
0398	70 Outperform	HK$1.66B	9.14	10.00%	9.67%	-9.00%	-21.55%
1929	64 Neutral	HK$142.06B	24.23	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$9.85B	8.35	9.13%	4.60%	-10.41%	67.25%
0256	48 Neutral	HK$731.12M	-2.41	-7.92%	―	-18.07%	-1041.89%

Emperor Watch & Jewellery Corporate Events

Emperor Watch & Jewellery Forecasts Over 60% Profit Surge for 2025

Emperor Watch & Jewellery has issued a positive profit alert, indicating it expects to report net profit of at least HK$420 million for the year ended 31 December 2025, up more than 60% from HK$257 million a year earlier. The improvement is attributed to higher total revenue and stronger gross margins driven by notably strong retail performance in Hong Kong and Mainland China, signalling robust consumer demand in its core markets and a potentially stronger earnings outlook for shareholders ahead of the formal annual results announcement in late March 2026.

The most recent analyst rating on (HK:0887) stock is a Hold with a HK$0.27 price target. To see the full list of analyst forecasts on Emperor Watch & Jewellery stock, see the HK:0887 Stock Forecast page.

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.