Newton Resources Ltd. (1231) AI Stock Analysis

• Market Cap: HK$1.18B
• Dividend Yield: N/A
• Average Volume (3M): 243.74K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.16
• Revenue Growth: -49.95%
• EPS Growth: -310.53%
• Country: HK
• Employees: 33
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Steel
• EPS (TTM): >-0.01
• Shares Outstanding: 4,000,000,000
• 10 Day Avg. Volume: 164,620
• 30 Day Avg. Volume: 243,740
• PEG Ratio: 31.98
• Price to Book (P/B): 36.75
• Price to Sales (P/S): 3.45
• P/FCF Ratio: 110.38
• 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: 46 Neutral
• Price Target: HK$0.30 ▼(-0.33% Downside)

The score is primarily held back by weak and inconsistent financial performance (sharp 2024 revenue decline, very thin margins, and a return to losses) and soft technical momentum (negative MACD). A currently conservative balance sheet and improved 2024 cash flow provide some support, but negative earnings (P/E < 0) and no stated dividend yield limit valuation appeal.

Positive Factors

Low Leverage

A low debt-to-equity ratio indicates a conservative balance sheet, providing financial stability and flexibility for future investments.

Improved Cash Flow

Improved cash flow enhances the company's ability to fund operations and investments without relying on external financing, supporting long-term growth.

Board Restructuring

Board restructuring may lead to strategic shifts and improved governance, potentially enhancing the company's market position and stakeholder confidence.

Negative Factors

Revenue Decline

A significant revenue decline indicates challenges in maintaining market share and competitiveness, potentially impacting long-term growth prospects.

Profit Warning

The profit warning suggests operational challenges and financial instability, which could hinder the company's ability to sustain profitability.

Operational Challenges

Operational disruptions due to external events can lead to supply chain issues and revenue loss, impacting the company's operational efficiency and financial health.

Newton Resources Ltd. Business Overview & Revenue Model

Company Description

Newton Resources Ltd, an investment holding company, engages in the supply and trading of iron ores, coals, and other commodities in Mainland China and internationally. It also provides management services. Newton Resources Ltd is headquartered in Wan Chai, Hong Kong.

How the Company Makes Money

Newton Resources Ltd. generates revenue through the trading and distribution of iron ore and other natural resources. The company sources these commodities from various suppliers and sells them to manufacturers and industrial clients, who use the raw materials for production purposes. The company benefits from its established relationships with suppliers and customers, allowing it to negotiate favorable terms and secure consistent supply and demand. Additionally, Newton Resources may engage in strategic partnerships and joint ventures to enhance its market position and explore new opportunities within the commodities sector. The company's earnings are influenced by fluctuations in commodity prices, demand from key industries, and the efficiency of its supply chain operations.

Newton Resources Ltd. Financial Statement Overview

Summary

Earnings quality and stability are weak: revenue fell sharply in 2024 (down 41.09% vs. 2023), margins are very thin (~1–2%), and the company returned to a small net loss. Offsetting this, leverage is currently very low (debt-to-equity ~0.02 in 2024) and 2024 operating/free cash flow improved materially, but cash-flow volatility over multiple years limits confidence in durability.

Income Statement

Revenue has been volatile and recently weakened materially (2024 revenue down 41.09% vs. 2023). Profitability remains thin: gross margin stayed around ~1–2% and the company swung back to a small net loss in 2024 after a profitable 2023, highlighting limited pricing power and high sensitivity to volume/mix. While EBITDA stayed positive in most years, overall earnings quality and consistency are weak for the period shown.

Balance Sheet

The balance sheet looks conservatively positioned in the latest year, with very low leverage in 2024 (debt-to-equity ~0.02) versus meaningfully higher leverage in prior periods (e.g., 2019 ~2.42; 2020 ~0.66; 2023 ~0.50). Equity is relatively stable, but returns on equity have been inconsistent and turned slightly negative in 2024, reflecting uneven profitability rather than balance-sheet stress.

Cash Flow

Cash generation is uneven. 2024 showed strong positive operating and free cash flow (about 9.7M), a sharp improvement from negative operating/free cash flow in 2022–2023, but this follows a history of large swings (including strong inflows in 2020–2021 and a sizable outflow in 2019). The company’s cash flow currently supports reported earnings, but the volatility reduces confidence in durability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.77B	309.94M	526.12M	201.49M	292.87M	467.50M
Gross Profit	17.18M	5.19M	9.95M	2.80M	5.40M	6.68M
EBITDA	10.74M	3.85M	7.85M	562.00K	-513.00K	2.92M
Net Income	-16.03M	-287.00K	2.37M	-2.22M	-1.78M	831.00K
Balance Sheet
Total Assets	450.63M	71.41M	109.17M	60.87M	37.75M	135.68M
Cash, Cash Equivalents and Short-Term Investments	160.96M	22.18M	22.42M	23.37M	14.50M	15.19M
Total Debt	47.45M	485.00K	14.66M	4.61M	5.45M	20.51M
Total Liabilities	218.31M	41.43M	78.83M	32.89M	7.52M	103.63M
Stockholders Equity	28.82M	29.13M	29.44M	27.07M	29.24M	31.07M
Cash Flow
Free Cash Flow	13.07M	9.70M	-9.11M	-1.35M	15.67M	12.43M
Operating Cash Flow	485.76K	9.73M	-9.11M	-1.34M	15.85M	12.49M
Investing Cash Flow	-264.75K	-31.00K	0.00	-6.00K	-179.00K	13.65M
Financing Cash Flow	-26.03M	-5.49M	9.37M	-1.60M	-16.36M	-23.95M

Newton Resources Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.30
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1231, the sentiment is Negative. The current price of 0.3 is below the 20-day moving average (MA) of 0.31, below the 50-day MA of 0.31, and above the 200-day MA of 0.27, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 41.15 is Neutral, neither overbought nor oversold. The STOCH value of >-0.01 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1231.

Newton Resources Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1938	70 Outperform	HK$358.96M	1.31	19.13%	―	-13.26%	63.38%
3788	62 Neutral	HK$9.57B	43.13	11.79%	1.06%	-6.73%	-21.30%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
0103	51 Neutral	HK$1.59B	75.63	1.06%	2.77%	-8.90%	-79.06%
0893	50 Neutral	HK$227.15M	-10.74	-3.20%	―	-32.95%	-687.50%
1231	46 Neutral	HK$1.18B	-73.75	-7.12%	―	-49.95%	-310.53%
2738	45 Neutral	HK$162.00M	-0.24	-296.26%	―	-49.77%	-1095.34%

Newton Resources Ltd. Corporate Events

Newton Resources Ltd. Announces Board Restructuring

Newton Resources Ltd. has announced changes to its board of directors, effective November 20, 2025. The board now includes Executive Directors Mr. Chong Tin Lung, Benny, and Mr. Lam Chun Kit; Non-executive Director Mr. Chen Hongyuan; and Independent Non-executive Directors Mr. Tsui King Fai, Mr. Lee Kwan Hung, Eddie, and Ms. Hang Qingli. This restructuring may influence the company’s strategic direction and governance, potentially impacting its stakeholders and market positioning.

Newton Resources Ltd Announces Director Resignation

Newton Resources Ltd announced the resignation of Mr. Shin Yick, Fabian as an independent non-executive director and a member of the board committees, effective November 20, 2025. Mr. Shin is stepping down to focus on personal commitments and has no disagreements with the board. The company expressed gratitude for his contributions during his tenure.

Newton Resources Ltd. Issues Profit Warning Amid Operational Challenges

Newton Resources Ltd. has issued a profit warning, indicating an expected net loss of approximately US$2.2 million for the year ending December 2025, a significant increase from the US$0.3 million loss recorded in 2024. This decline is attributed to reduced sales and gross profit due to a decrease in iron ore supply from a major supplier and weak demand. Additionally, a rockfall incident at Koolan Island has led to the suspension of mining activities, affecting the company’s operations and financial position. The company is exploring new supply sources and potential mergers to mitigate these challenges.

Newton Resources Faces Supply Challenges Due to Koolan Rockfall Incident

Newton Resources Ltd announced that a significant rockfall at the Koolan Operation, a major supplier of hematite ores, has led to the suspension of mining activities. The incident has resulted in the deferral of several scheduled shipments, and the company is currently negotiating with Koolan to assess the impact on its operations while continuing business as usual.