Hengan International Group Co (1044) AI Stock Analysis

• Market Cap: HK$33.42B
• Dividend Yield: 5.33%
• Average Volume (3M): 2.04M
• Price to Earnings (P/E): 13.5
• Beta (1Y): 0.69
• Revenue Growth: -3.48%
• EPS Growth: -24.11%
• Country: HK
• Employees: 24,000
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Household & Personal Products
• EPS (TTM): 1.33
• Shares Outstanding: 1,162,121,000
• 10 Day Avg. Volume: 1,895,839
• 30 Day Avg. Volume: 2,040,272
• PEG Ratio: -0.63
• Price to Book (P/B): 1.15
• Price to Sales (P/S): 1.06
• P/FCF Ratio: 15.82
• 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: 73 Outperform
• Price Target: HK$31.00 ▲(11.83% Upside)

The overall stock score of 73 reflects strong technical momentum and attractive valuation, despite challenges in revenue growth and free cash flow generation. The company's solid profitability and reduced leverage are key strengths, but overbought technical indicators suggest caution in the short term.

Positive Factors

Strong Brand Presence

A strong brand presence in the Chinese market allows Hengan to maintain customer loyalty and competitive pricing power, supporting long-term revenue stability.

Reduced Leverage

Reduced leverage enhances financial flexibility and reduces interest burden, allowing the company to invest in growth opportunities and withstand economic downturns.

Strong Cash Generation

Strong cash generation relative to net income ensures liquidity for operations and strategic investments, supporting long-term business sustainability.

Negative Factors

Declining Revenue Growth

Declining revenue growth can hinder the company's ability to expand market share and invest in innovation, potentially impacting long-term competitiveness.

Decreasing Profit Margins

Decreasing profit margins may indicate rising costs or pricing pressures, which can erode profitability and limit the company's ability to reinvest in growth.

Free Cash Flow Challenges

Challenges in generating free cash flow can restrict the company's ability to fund new projects, pay dividends, or reduce debt, impacting long-term financial health.

Hengan International Group Co Business Overview & Revenue Model

Company Description

Hengan International Group Co., Ltd. is a leading manufacturer and distributor of personal care and hygiene products in China. Established in 1985, the company operates primarily in the sectors of personal care, tissue and hygiene products, and health care. Its core product offerings include disposable diapers, feminine hygiene products, adult incontinence products, and various types of tissue paper. Hengan is committed to quality and innovation, leveraging advanced technology and strong branding to maintain a competitive edge in the market.

How the Company Makes Money

Hengan International generates revenue primarily through the sale of its wide range of personal care and hygiene products. Key revenue streams include the production and distribution of disposable diapers, feminine hygiene products, and tissue papers, which are sold both under its own brands and as private label products for various retailers. The company benefits from economies of scale, as it operates several large manufacturing facilities that allow for reduced production costs and increased output. Additionally, Hengan has established significant partnerships with major retailers and distributors, enhancing its market reach and facilitating steady sales growth. The company's focus on innovation and quality also helps to attract consumers, thereby contributing to its earnings.

Hengan International Group Co Financial Statement Overview

Summary

Hengan International Group Co shows solid profitability and a strong balance sheet with reduced leverage. However, revenue growth and free cash flow generation have faced headwinds, impacting overall performance. The company's ability to maintain profitability margins amidst revenue pressures and its strong equity position remain key strengths.

Income Statement

The company's gross profit margin for 2024 was approximately 32.30%, which shows a slight decline from 2023's 33.71%. The net profit margin also dropped to 10.14% from 11.78% the previous year. Revenue decreased by 4.63% in 2024, indicating challenges in maintaining growth. However, EBIT and EBITDA margins were relatively stable at 14.79% and 19.56% respectively, though slightly lower than 2023. The overall income statement reflects consistent profitability but challenges in revenue growth.

Balance Sheet

The debt-to-equity ratio improved to 0.63 from 0.70, indicating reduced leverage. The return on equity (ROE) was 10.99% in 2024, down from 13.73% in 2023, due to lower net income. The equity ratio stood at 52.55%, an improvement from 50.70%, showcasing strong equity financing. Overall, the balance sheet is robust, with decreasing debt levels and solid equity ratios, though ROE has been pressured by declining net income.

Cash Flow

The free cash flow decreased by 35.43% from 2023 to 2024, reflecting lower cash generation. The operating cash flow to net income ratio was 1.34, indicating strong cash generation relative to net income. However, this was a decrease from 1.38 in 2023. The free cash flow to net income ratio was 0.66, down from 0.84 in 2023. The cash flow statement suggests challenges in generating free cash flow despite strong operating cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	22.64B	22.67B	23.77B	22.62B	20.79B	22.37B
Gross Profit	7.20B	7.32B	8.01B	7.69B	7.77B	9.46B
EBITDA	3.54B	4.43B	5.14B	4.12B	4.55B	6.02B
Net Income	2.26B	2.30B	2.80B	1.93B	3.27B	4.59B
Balance Sheet
Total Assets	42.17B	39.80B	40.22B	42.34B	42.29B	44.44B
Cash, Cash Equivalents and Short-Term Investments	16.44B	14.32B	18.22B	18.70B	18.26B	20.60B
Total Debt	16.63B	13.11B	14.27B	17.07B	18.26B	20.86B
Total Liabilities	20.54B	18.66B	19.59B	22.56B	23.01B	24.78B
Stockholders Equity	21.41B	20.92B	20.40B	19.52B	19.04B	19.41B
Cash Flow
Free Cash Flow	1.90B	1.52B	2.35B	2.57B	3.82B	4.28B
Operating Cash Flow	3.14B	3.07B	3.88B	3.81B	4.60B	5.04B
Investing Cash Flow	1.95B	-110.26M	3.58B	-6.07B	2.68B	1.56B
Financing Cash Flow	-6.14B	-3.59B	-5.55B	-4.14B	-6.49B	-3.93B

Hengan International Group Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 27.72
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1044, the sentiment is Positive. The current price of 27.72 is below the 20-day moving average (MA) of 28.55, below the 50-day MA of 27.98, and above the 200-day MA of 23.59, indicating a bullish trend. The MACD of 0.30 indicates Positive momentum. The RSI at 52.86 is Neutral, neither overbought nor oversold. The STOCH value of 40.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:1044.

Hengan International Group Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6601	74 Outperform	HK$2.95B	13.87	6.65%	5.98%	9.72%	-10.15%
1044	73 Outperform	HK$33.42B	13.53	10.69%	5.33%	-3.48%	-24.11%
2023	66 Neutral	HK$359.01M	6.31	10.92%	―	11.10%	-4.38%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
2145	61 Neutral	HK$34.62B	34.24	39.62%	2.60%	20.78%	18.37%
3332	56 Neutral	HK$615.65M	19.25	3.92%	―	-0.92%	-71.88%
6993	43 Neutral	HK$16.77B	-29.31	-6.08%	4.91%	2.79%	-170.67%

Hengan International Group Co Corporate Events

Hengan International Completes First Tranche of Corporate Bonds

Hengan International Group Co has successfully issued the first tranche of its corporate bonds, amounting to RMB1.0 billion with a 1.8% coupon rate for a one-year term. The proceeds will be used to supplement the company’s working capital and repay bank loans, reflecting a strategic move to strengthen its financial position and operational flexibility.

Hengan International Completes Fifth Tranche of Commercial Papers

Hengan International Group Co announced the successful issuance of the fifth tranche of super short-term commercial papers, amounting to RMB0.5 billion with a coupon rate of 1.68% per annum. The proceeds from this issuance are intended to repay the company’s bank loans, which is part of a broader debt financing strategy approved by the National Association of Financial Market Institutional Investors, leaving RMB3.8 billion unissued from the approved amount.

Hengan International Completes Fourth Tranche of Commercial Papers

Hengan International Group Co announced the completion of its fourth tranche of super short-term commercial papers, raising RMB0.5 billion with a coupon rate of 1.77% and a term of 269 days. The proceeds will be used to supplement working capital and repay bank loans, reflecting the company’s strategic financial management to support its operations and enhance liquidity.

Hengan International Issues Third Tranche of Commercial Papers

Hengan International Group Co has announced the successful issuance of the third tranche of its super short-term commercial papers, amounting to RMB1 billion with a coupon rate of 1.74% per annum for a term of 182 days. The proceeds from this issuance are intended to supplement the company’s working capital and repay bank loans for some domestic subsidiaries, reflecting the company’s strategic financial management and operational expansion.