Mainland Headwear Holdings (1100) AI Stock Analysis

• Market Cap: HK$545.04M
• Dividend Yield: 6.2%
• Average Volume (3M): 57.79K
• Price to Earnings (P/E): 6.7
• Beta (1Y): -0.07
• Revenue Growth: 23.17%
• EPS Growth: -7.30%
• Country: HK
• Employees: 8,200
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Footwear & Accessories
• EPS (TTM): 0.14
• Shares Outstanding: 429,164,460
• 10 Day Avg. Volume: 72,450
• 30 Day Avg. Volume: 57,794
• PEG Ratio: -0.23
• Price to Book (P/B): 0.62
• Price to Sales (P/S): 0.47
• P/FCF Ratio: -11.95
• 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: 57 Neutral
• Price Target: HK$1.50 ▲(16.28% Upside)

The overall stock score is primarily influenced by financial performance and technical analysis. The company's financial health is challenged by declining profitability and cash flow issues, while technical indicators suggest a bearish trend. However, the stock's valuation is attractive due to a low P/E ratio and high dividend yield, providing some support to the overall score.

Positive Factors

Strong Partnerships

Strong partnerships with global brands enhance market reach and provide stable revenue streams, supporting long-term growth and brand recognition.

Revenue Growth

A revenue growth rate of 23.17% indicates robust demand and effective market strategies, contributing to the company's expansion and competitive positioning.

Balance Sheet Health

A low debt-to-equity ratio and strong equity base reflect financial stability and prudent management, providing flexibility for future investments.

Negative Factors

Profit Margin Decline

Declining profit margins suggest increased cost pressures or competitive pricing, potentially affecting long-term profitability and operational efficiency.

Cash Flow Volatility

Volatile cash flow and recent declines pose liquidity risks, impacting the company's ability to finance operations and invest in growth opportunities.

Competitive Pressures

Competitive pressures leading to fluctuating revenue and declining margins may hinder market share retention and profit sustainability over time.

Mainland Headwear Holdings Business Overview & Revenue Model

Company Description

Mainland Headwear Holdings Limited, an investment holding company, designs, manufactures, trades in, and distributes casual headwear products in the United States, Europe, the People's Republic of China, Hong Kong, and internationally. The company operates through Manufacturing Business and Trading Business segments. Its casual headwear products include baseball caps, bucket hats, winter caps, gatsby hats, headbands, and sun visors. The company also offers headwear products for sports and racing, lifestyle and fashion, fishing/hunting and golf, and corporate events; character and entertainment, and O.D.M. headwear products; and knitted and winter hats. In addition, it is involved in the trading of apparels and accessories, as well as leather goods and bags; provision of digitizing services; property holding; and trading of machineries, fabric, and accessory materials, as well as e-commerce business. The company was founded in 1986 and is headquartered in Kowloon Bay, Hong Kong.

How the Company Makes Money

Mainland Headwear generates revenue primarily through the sale of headwear products to both wholesale and retail customers. The company has established strong partnerships with global brands and retailers, which allows it to produce licensed merchandise that aligns with popular sports teams and fashion labels. Key revenue streams include bulk orders from corporate clients for promotional use, retail sales through distribution channels, and direct-to-consumer sales via its online platforms. Additionally, the company's ability to leverage economies of scale in manufacturing and its focus on product innovation contribute to its profitability.

Mainland Headwear Holdings Financial Statement Overview

Summary

The company faces challenges in maintaining profitability and cash flow consistency amidst competitive pressures. The income statement shows declining revenue and profit margins, while the cash flow statement indicates volatility and liquidity risks. However, the balance sheet reflects stability with moderate leverage and a solid capital base.

Income Statement

In recent years, the company has experienced fluctuating revenue and profit margins. The gross profit margin for the latest year is 30.9%, reflecting competitive pricing pressure. The net profit margin decreased significantly to 3.9%, indicating challenges in maintaining net profitability. Revenue has seen a slight decline, suggesting market challenges or competition. EBIT and EBITDA margins have also decreased, showing reduced operational efficiency.

Balance Sheet

The company's financial structure is relatively strong, with a debt-to-equity ratio of 0.23, indicating moderate leverage. Return on equity is 5.1%, which is stable but could be improved. The equity ratio is 57.4%, demonstrating a solid capital base. Overall, the balance sheet reflects stability and prudent financial management, with some room for enhancing returns.

Cash Flow

Free cash flow has shown volatility, with a recent decline due to reduced operating cash flow and capital expenditure adjustments. The operating cash flow to net income ratio is low due to zero operating cash flow, posing a potential liquidity risk. The cash flow statement suggests challenges in generating consistent cash flow, impacting the company's ability to finance operations and growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.63B	1.47B	1.42B	1.87B	1.60B	1.05B
Gross Profit	491.08M	455.48M	476.36M	637.30M	479.22M	318.69M
EBITDA	209.58M	210.98M	278.82M	354.76M	262.86M	139.38M
Net Income	81.72M	57.07M	117.95M	195.39M	128.08M	45.90M
Balance Sheet
Total Assets	1.96B	1.94B	1.79B	1.96B	1.67B	1.43B
Cash, Cash Equivalents and Short-Term Investments	243.43M	214.72M	331.02M	275.28M	222.80M	234.27M
Total Debt	255.69M	259.77M	215.47M	310.77M	317.75M	337.35M
Total Liabilities	738.32M	765.58M	625.42M	889.33M	767.40M	645.09M
Stockholders Equity	1.16B	1.12B	1.11B	1.03B	876.91M	770.47M
Cash Flow
Free Cash Flow	138.34M	-58.13M	113.80M	167.91M	66.22M	99.92M
Operating Cash Flow	215.72M	152.66M	349.29M	245.98M	88.16M	110.29M
Investing Cash Flow	-143.58M	-254.90M	-143.23M	-104.30M	-47.11M	11.26M
Financing Cash Flow	-34.23M	-34.80M	-132.93M	-86.34M	-63.14M	-15.71M

Mainland Headwear Holdings Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.29
• 50DMA: Negative
• 100DMA: Negative
• 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:1100, the sentiment is Negative. The current price of 1.29 is below the 20-day moving average (MA) of 1.30, below the 50-day MA of 1.36, and below the 200-day MA of 1.40, indicating a bearish trend. The MACD of -0.02 indicates Negative momentum. The RSI at 43.92 is Neutral, neither overbought nor oversold. The STOCH value of 23.48 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1100.

Mainland Headwear Holdings Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2683	73 Outperform	HK$355.50M	5.53	28.87%	5.23%	31.25%	147.52%
1731	73 Outperform	HK$873.60M	4.47	14.86%	9.33%	6.92%	4.74%
1023	62 Neutral	HK$500.61M	-2.81	-10.55%	11.76%	-1.38%	-275.02%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
1100	57 Neutral	HK$545.04M	6.67	7.16%	6.20%	23.17%	-7.30%
2033	49 Neutral	HK$668.87M	―	-0.77%	2.12%	-21.75%	-152.15%
1842	45 Neutral	HK$69.60M	-9.67	-5.68%	―	6.38%	-275.00%

Mainland Headwear Holdings Corporate Events

Mainland Headwear Holdings Updates Share Option Scheme Details

Mainland Headwear Holdings Limited has issued a supplemental announcement to its annual report for the year ended 31 December 2024, providing additional information regarding its Share Option Scheme. As of the end of 2024, there were 4,291,644 options available for grant under the service provider sublimit of the scheme, highlighting the company’s commitment to enhancing its employee incentive programs.