Dream International (1126) AI Stock Analysis

• Market Cap: $6.50B
• Dividend Yield: 7.8%
• Average Volume (3M): 1.13M
• Price to Earnings (P/E): 8.5
• Beta (1Y): 0.32
• Revenue Growth: 11.18%
• EPS Growth: -1.06%
• Country: HK
• Employees: 28,697
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Leisure
• EPS (TTM): 0.45
• Shares Outstanding: 676,865,050
• 10 Day Avg. Volume: 688,612
• 30 Day Avg. Volume: 1,129,271
• PEG Ratio: -0.40
• Price to Book (P/B): 0.85
• Price to Sales (P/S): 0.62
• P/FCF Ratio: 6.23
• Enterprise Value/Market Cap: 0.79
• Enterprise Value/Revenue: 0.90
• Enterprise Value/Gross Profit: 4.21
• Enterprise Value/Ebitda: 4.68
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: HK$10.50 ▲(26.05% Upside)

Dream International's overall stock score is driven by its solid financial performance and attractive valuation, which are the most significant factors. The technical analysis presents some concerns with bearish momentum, which slightly offsets the positive financial and valuation aspects.

Positive Factors

Revenue Growth

Consistent revenue growth indicates a strong market position and effective sales strategies, supporting long-term business expansion.

Balance Sheet Health

A robust balance sheet with low leverage enhances financial stability and provides flexibility for future investments.

Cash Generation Ability

Strong cash generation from operations ensures liquidity and supports ongoing business activities and potential growth initiatives.

Negative Factors

Profit Margin Decline

A declining net profit margin suggests challenges in maintaining profitability, which could impact future earnings and investment capacity.

Free Cash Flow Decrease

A significant decrease in free cash flow may limit the company's ability to invest in growth opportunities and manage financial obligations.

Return on Equity Decline

A decline in return on equity indicates reduced efficiency in generating profits from shareholders' equity, potentially affecting investor confidence.

Dream International Business Overview & Revenue Model

Company Description

Dream International Limited, an investment holding company, designs, develops, manufactures, and sells toys in Hong Kong, North America, Japan, Europe, the People's Republic of China, Vietnam, Korea, and internationally. The company operates through Plush Stuffed Toys, Plastic Figures, Die-casting Products, and Tarpaulin segments. It manufactures plush stuffed toys on original equipment manufacturing and on original design manufacturing basis. The company also offers plastic figures, die-casting products, dolls, and tarpaulin products, as well as non-seasonal items. In addition, it is involved in the manufacture of fabrics and dyeing products, and business color box and printing products. The company was formerly known as C & H Toy of HK Co., Ltd. and changed its name to Dream International Limited in 2001. Dream International Limited was founded in 1984 and is based in Tsim Sha Tsui, Hong Kong.

How the Company Makes Money

Dream International generates revenue primarily through the sale of its plush toys and related merchandise. The company operates on a business-to-business (B2B) model, selling its products to retailers, distributors, and other wholesalers. Key revenue streams include direct sales from their manufacturing operations, as well as royalties from licensing agreements with recognizable brands in the entertainment and media sectors. Additionally, Dream International benefits from strategic partnerships with major retailers, which provide a stable distribution channel and enhance market visibility. The company also invests in innovative product designs and seasonal collections, which contribute to higher sales volumes during peak shopping periods, such as holidays and special events.

Dream International Financial Statement Overview

Summary

Dream International displays solid financial health with strong revenue growth and efficient operations. The balance sheet is particularly robust, showcasing low leverage and high equity. However, challenges remain in maintaining profit margins and free cash flow generation, which should be monitored for future sustainability.

Income Statement

Dream International has shown consistent revenue growth with a 1.83% increase from 2023 to 2024. The gross profit margin is healthy at 22.99%, indicating efficient cost management. However, the net profit margin declined from 15.50% in 2023 to 13.55% in 2024, suggesting challenges in converting sales into profit. EBIT and EBITDA margins remain strong at 17.11% and 19.70% respectively, highlighting operational efficiency.

Balance Sheet

The company exhibits a strong equity position with a debt-to-equity ratio of 0.04 and an equity ratio of 79.85%, indicating low financial leverage and strong asset backing. Return on equity decreased from 22.57% in 2023 to 18.65% in 2024, reflecting a slight decrease in profit generation from equity.

Cash Flow

Operating cash flow to net income ratio is 1.01, demonstrating strong cash generation from operations. However, the free cash flow decreased by 50.65% from 2023 to 2024, which could pose challenges for future investments. Despite this, the free cash flow to net income ratio remains robust at 0.72, indicating good cash conversion efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.73B	5.45B	5.35B	6.25B	4.80B	3.78B
Gross Profit	1.22B	1.25B	1.34B	1.23B	614.72M	660.61M
EBITDA	1.10B	1.12B	1.21B	1.03B	448.51M	498.30M
Net Income	766.67M	738.50M	829.85M	687.10M	193.56M	272.78M
Balance Sheet
Total Assets	5.19B	4.96B	4.61B	4.38B	4.20B	3.55B
Cash, Cash Equivalents and Short-Term Investments	1.58B	1.61B	1.39B	761.64M	601.15M	665.40M
Total Debt	111.71M	142.98M	125.51M	256.88M	298.39M	299.62M
Total Liabilities	1.16B	998.42M	933.80M	1.18B	1.53B	986.36M
Stockholders Equity	4.03B	3.96B	3.68B	3.21B	2.67B	2.56B
Cash Flow
Free Cash Flow	683.13M	541.14M	1.08B	420.98M	11.14M	111.48M
Operating Cash Flow	896.93M	744.79M	1.16B	621.41M	210.09M	336.81M
Investing Cash Flow	-101.64M	-203.66M	-71.95M	-78.29M	-204.06M	-368.85M
Financing Cash Flow	-448.98M	-379.21M	-489.05M	-233.73M	-101.83M	-56.34M

Dream International Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 8.33
• 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:1126, the sentiment is Negative. The current price of 8.33 is below the 20-day moving average (MA) of 8.59, below the 50-day MA of 9.58, and below the 200-day MA of 9.45, indicating a bearish trend. The MACD of -0.31 indicates Negative momentum. The RSI at 39.76 is Neutral, neither overbought nor oversold. The STOCH value of 22.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1126.

Dream International Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1126	71 Outperform	$6.50B	8.48	19.99%	7.80%	11.18%	-1.06%
1086	64 Neutral	HK$1.89B	6.84	4.75%	6.19%	7.94%	-24.24%
0869	63 Neutral	$637.20M	43.90	1.28%	13.73%	-44.36%	-93.64%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
0635	55 Neutral	$1.10B	-2.56	-8.58%	8.49%	-39.71%	-74.16%
1005	50 Neutral	HK$393.23M	-1.73	-37.46%	4.71%	-13.08%	-21.27%
6918	43 Neutral	HK$116.17M	―	-19.89%	―	84.26%	44.41%

Dream International Corporate Events

Dream International Announces Board Composition and Roles

Dream International Limited, a company incorporated in Hong Kong, has announced the composition of its board of directors and their roles within the organization. The board consists of executive directors and independent non-executive directors, with specific members serving on the audit, nomination, and remuneration committees. This announcement provides clarity on the governance structure of the company, potentially impacting its strategic direction and stakeholder confidence.

Dream International Enhances Audit Committee Oversight

Dream International Limited has outlined the responsibilities and composition of its audit committee, which includes independent non-executive directors. The committee is tasked with overseeing the relationship with external auditors, ensuring their independence, and monitoring the integrity of financial reporting. This announcement aims to enhance transparency and accountability in the company’s financial practices, potentially strengthening stakeholder confidence and aligning with regulatory standards.

Dream International Updates Remuneration Committee Policies

Dream International Limited, a company incorporated in Hong Kong, has announced updates regarding its remuneration committee. The committee, chaired by Dr. Chan Yoo and including other independent and executive directors, is tasked with developing and recommending remuneration policies for directors and senior management. The committee’s responsibilities include ensuring transparent procedures for remuneration policy development, reviewing and approving management’s remuneration proposals, and making recommendations on remuneration packages. These measures aim to align with corporate goals, ensure fairness, and maintain competitive compensation structures, potentially impacting the company’s governance and stakeholder relations.

Dream International Establishes Nomination Committee for Board Effectiveness

Dream International Limited, a company incorporated in Hong Kong, has announced the establishment of its Nomination Committee, which plays a crucial role in ensuring transparent appointment processes for Board members and assessing the Board’s overall effectiveness. The committee, consisting of a majority of independent non-executive directors, is tasked with reviewing the Board’s composition, recommending qualified individuals for directorship, and supporting the company’s corporate strategy through effective succession planning and evaluation of board performance.

Dream International to Enhance Share Liquidity with Board Lot Size Reduction

Dream International Limited, a company incorporated in Hong Kong, has announced a change in the board lot size for its shares traded on the Hong Kong Stock Exchange. Effective November 6, 2025, the board lot size will decrease from 2,000 shares to 500 shares. This change aims to enhance the liquidity of the shares by reducing the board lot value from HK$22,600 to HK$5,650, based on the current share price. The company believes this adjustment is in the best interest of both the company and its shareholders. No odd lot arrangements will be made, and the company does not plan any corporate actions or fundraising activities in the next twelve months that would counteract this change.

Dream International Announces Board Changes to Strengthen Leadership

Dream International Limited announced a significant change in its board of directors, effective November 20, 2025. Mr. Jong Hun Lim will resign from his position as an independent non-executive director and chairman of the Nomination Committee, with Professor Seung Yeon Yoo taking over these roles. Professor Yoo brings extensive experience in finance and accounting, which is expected to strengthen the company’s governance and strategic direction. This transition reflects the company’s ongoing efforts to enhance its leadership team and maintain its competitive edge in the industry.