China Environmental Energy Investment Limited (0986) AI Stock Analysis

• Market Cap: HK$91.92M
• Dividend Yield: N/A
• Average Volume (3M): 4.40M
• Price to Earnings (P/E): 4.0
• Beta (1Y): 0.58
• Revenue Growth: 11.95%
• EPS Growth: N/A
• Country: HK
• Employees: 23
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Luxury Goods
• EPS (TTM): <0.01
• Shares Outstanding: 1,294,705,400
• 10 Day Avg. Volume: 759,561
• 30 Day Avg. Volume: 4,404,477
• PEG Ratio: -0.01
• Price to Book (P/B): 0.24
• Price to Sales (P/S): 1.33
• P/FCF Ratio: -24.96
• 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: 61 Neutral
• Price Target: HK$0.08 ▼(-16.67% Downside)
• Action: Downgraded Date: 02/03/26
• Date: Action: Downgraded 02/03/26

The score is driven primarily by improving profitability/revenue and a low-leverage balance sheet, offset by weak cash flow signals. Technical indicators lean soft (negative MACD and below key moving averages), while valuation is supportive due to the low P/E.

Positive Factors

Low Leverage / Strong Balance Sheet

A debt-to-equity of 0.09 implies very low financial leverage, giving the firm durable capacity to fund renewable projects, absorb cyclical shocks, and access credit at lower cost. Over 2–6 months this structural strength supports capital allocation and lowers refinancing risk for project investments.

Improved Profitability Margins

Sustained high gross and net margins indicate the company is capturing strong economics from operations or contracts. For a renewables investor, durable margins provide the capacity to fund maintenance, reinvest in capacity, and withstand price or input cost swings, improving long-term project viability.

Positive Revenue Growth Trend

Consistent mid-single-digit revenue growth reflects expanding asset base or higher power sales. Over the medium term this trend supports predictable cash flows from PPAs and scale benefits, enabling incremental margin improvement and more reliable project-level forecasting for investors and lenders.

Negative Factors

Negative Operating and Free Cash Flows

Negative operating and free cash flows signal limited internal cash generation despite reported profits, forcing reliance on external financing or equity to fund capex and working capital. Over 2–6 months this constrains growth execution, increases liquidity risk, and can raise financing costs for project development.

Historical Margin Volatility

Volatile operating margins reduce the predictability of project economics and make budgeting for maintenance and expansion harder. For capital-intensive renewables, margin swings can strain debt covenants, complicate ROI projections, and impede confidence from long-term counterparties and financiers.

Negative Return on Equity in Prior Years

A history of negative ROE indicates prior periods where capital failed to generate shareholder returns. Even with recent profit improvement, converting that into consistent positive ROE is required to justify new equity or attract long-term investors; otherwise fundraising and valuation stability may be impaired.

China Environmental Energy Investment Limited Business Overview & Revenue Model

Company Description

Dufu Liquor Group Ltd. is an investment holding company. It operates under the Design and Marketing of Jewelry, and Money Lending segments. The Design and Marketing of Jewelry segment focuses on the designing, selling, and marketing of jewelry. The Money Lending segment is involved in providing loans as money lending. The company was founded in 1977 and is headquartered in Hong Kong.

How the Company Makes Money

The company generates revenue primarily through the sale of electricity produced from its renewable energy projects, including solar and wind farms. This revenue model is bolstered by long-term power purchase agreements (PPAs) with local utilities and governments, ensuring a steady income stream. Additional revenue is derived from project management fees, consultancy services in energy efficiency, and investments in emerging green technologies. Strategic partnerships with governmental bodies and private sector players further enhance its market position and contribute to its earnings, allowing the company to leverage various funding sources and incentives for renewable energy development.

China Environmental Energy Investment Limited Financial Statement Overview

Summary

Profitability and revenue improved (gross margin 51.32%, net margin 45.16%, revenue growth 10.16%) and leverage is low (debt-to-equity 0.09), but negative operating and free cash flows and historical margin volatility materially weaken the financial profile.

Income Statement

The company has shown a significant improvement in its profitability metrics over the past year, with a gross profit margin of 51.32% and a net profit margin of 45.16% in the latest annual report. Revenue growth rate is positive at 10.16%, indicating a recovery from previous declines. However, historical volatility in EBIT and EBITDA margins suggests potential risks in maintaining consistent profitability.

Balance Sheet

The company's balance sheet is relatively strong, with a low debt-to-equity ratio of 0.09, indicating low leverage. The equity ratio is healthy, suggesting a stable financial structure. However, the return on equity has been negative in previous years, which could be a concern if profitability does not stabilize.

Cash Flow

Cash flow metrics indicate challenges, with negative operating and free cash flows. The free cash flow growth rate is negative, and the operating cash flow to net income ratio is also negative, highlighting potential liquidity issues. Despite these challenges, the free cash flow to net income ratio is stable at 1.0, suggesting some consistency in cash flow management.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	68.38M	67.28M	66.05M	68.47M	108.91M	105.65M
Gross Profit	36.97M	34.53M	29.87M	28.03M	28.18M	23.51M
EBITDA	36.17M	35.40M	-15.94M	-11.46M	3.76M	10.25M
Net Income	27.78M	30.39M	-18.51M	-14.46M	604.00K	4.45M
Balance Sheet
Total Assets	448.51M	439.21M	387.42M	414.04M	421.09M	360.05M
Cash, Cash Equivalents and Short-Term Investments	157.00K	216.00K	354.00K	1.35M	10.19M	1.54M
Total Debt	28.14M	33.98M	26.36M	21.45M	28.11M	21.69M
Total Liabilities	78.67M	72.08M	55.41M	47.48M	46.94M	50.61M
Stockholders Equity	369.84M	367.13M	332.00M	366.56M	374.15M	309.44M
Cash Flow
Free Cash Flow	290.00K	-3.58M	-4.19M	-8.46M	-52.33M	-18.68M
Operating Cash Flow	-680.00K	-3.58M	-4.19M	-8.46M	-52.33M	-18.68M
Investing Cash Flow	2.65M	123.00K	2.00K	101.00K	1.00K	5.00M
Financing Cash Flow	-281.00K	3.32M	3.19M	-477.00K	60.98M	7.78M

China Environmental Energy Investment Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.09
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0986, the sentiment is Negative. The current price of 0.09 is above the 20-day moving average (MA) of 0.08, above the 50-day MA of 0.08, and below the 200-day MA of 0.09, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 29.54 is Positive, neither overbought nor oversold. The STOCH value of 14.02 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:0986.

China Environmental Energy Investment Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
0986	61 Neutral	HK$91.92M	4.03	7.77%	―	11.95%	―
8026	59 Neutral	HK$572.07M	42.17	2.81%	―	-1.93%	―
0513	53 Neutral	HK$101.78M	658.00	-15.33%	―	62.55%	-0.69%
0417	48 Neutral	HK$229.25M	-2.42	-43.66%	―	-27.28%	47.40%
6838	47 Neutral	HK$109.20M	-2.69	-4.47%	9.26%	-4.08%	-196.66%
0084	46 Neutral	HK$67.91M	-0.48	-10.19%	―	-13.06%	-120.76%

China Environmental Energy Investment Limited Corporate Events

Dufu Liquor Group Signs Tech Services Pact to Boost Digital Capabilities

Dufu Liquor Group Limited has entered into a services agreement with Mr. Xu Guo Qiang to explore comprehensive cooperation, leveraging each party’s strengths. Under the deal, Mr. Xu will provide internet application technology, consulting and network system security services, aimed at integrating digital capabilities with the group’s existing operations and creating new development opportunities.

The board expects the collaboration to enhance synergy between the company’s resources and Mr. Xu’s technological expertise, potentially modernising its business infrastructure. The announcement also urges shareholders and potential investors to exercise caution when dealing in the company’s shares, underscoring the early-stage and exploratory nature of this partnership.

The most recent analyst rating on (HK:0986) stock is a Hold with a HK$0.09 price target. To see the full list of analyst forecasts on China Environmental Energy Investment Limited stock, see the HK:0986 Stock Forecast page.

Dufu Liquor Clarifies Share Option Pool in Supplemental Annual Report Filing

Dufu Liquor Group Limited has issued a supplemental announcement to its annual report for the year ended 31 March 2025, clarifying details of its new share option scheme adopted on 29 September 2021. The company disclosed that a total of 124,927,550 options were available for grant under the scheme mandate, including any service provider sublimit, as at both 1 April 2024 and 31 March 2025, and emphasized that this additional disclosure does not affect other information in the annual report, providing greater transparency for shareholders regarding potential equity-based incentives and dilution.

The most recent analyst rating on (HK:0986) stock is a Hold with a HK$0.08 price target. To see the full list of analyst forecasts on China Environmental Energy Investment Limited stock, see the HK:0986 Stock Forecast page.