China Environmental Technology and Bioenergy Holdings Limited (1237) AI Stock Analysis

• Market Cap: HK$87.39M
• Dividend Yield: N/A
• Average Volume (3M): 18.22K
• Price to Earnings (P/E): 5.8
• Beta (1Y): 0.88
• Revenue Growth: 38.42%
• EPS Growth: N/A
• Country: HK
• Employees: 252
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Furnishings, Fixtures & Appliances
• EPS (TTM): 0.10
• Shares Outstanding: 96,037,050
• 10 Day Avg. Volume: 16,107
• 30 Day Avg. Volume: 18,220
• PEG Ratio: -0.04
• Price to Book (P/B): 0.03
• Price to Sales (P/S): 0.06
• P/FCF Ratio: 1.19
• 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: 55 Neutral
• Price Target: HK$0.85 ▼(-13.16% Downside)
• Action: Reiterated Date: 01/08/26
• Date: Action: Reiterated 01/08/26

The score is held back primarily by weak profitability and a sharp deterioration in cash flow (operating and free cash flow at zero), despite strong revenue growth and a low-leverage balance sheet. Technicals are moderately constructive with neutral momentum, and valuation looks inexpensive on P/E, partially offsetting the fundamental cash-flow and margin risks.

Positive Factors

Revenue Growth

Sustained ~38% top-line growth indicates expanding demand for the company’s waste-to-energy and bioenergy services. Over 2–6 months this supports scale economics, contract leverage, and reinvestment potential, increasing the probability of improved margins if operational execution follows.

Balance Sheet Strength

A high equity ratio and very low leverage provide durable financial flexibility for capital-intensive project funding, permit weathering cyclical slowdowns, and reduce refinancing risk. This structural strength supports financing new waste‑to‑energy assets without excessive interest burdens.

Structural Industry Position

Operating in waste management, biofuels and municipal contracts aligns the company with long-term regulatory and sustainability trends. Stable service contracts and government incentives create recurring revenue potential and a defensible niche versus pure commodity energy providers.

Negative Factors

Cash Flow Deterioration

Operating and free cash flow collapsing to zero materially reduces the company’s ability to self-fund capex or growth, increasing reliance on external capital. Over several months this limits flexibility to complete projects, pay dividends, or absorb cost shocks, raising execution risk.

Weak Profitability Metrics

Very low net margin, negative EBIT and minimal ROE indicate the business currently struggles to convert revenue into sustainable profits. Persistently weak returns on equity undermine shareholder value creation and suggest structural inefficiencies that must be addressed for long‑term viability.

Margin Conversion Risk

Improved gross margin shows some cost control, yet negative EBIT signals SG&A or operating costs erode gains. If the company cannot sustainably convert gross profits into operating profits, long-term margin compression will limit free cash flow and hinder reinvestment or debt reduction.

China Environmental Technology and Bioenergy Holdings Limited Business Overview & Revenue Model

Company Description

China Environmental Technology and Bioenergy Holdings Limited, an investment holding company, manufactures and sells outdoor wooden products in the People's Republic of China, North America, Europe, other Asia Pacific, and Australasia. The company operates through three segments: Manufacturing and Sales of Wooden Products; Retail Sales of Outdoor Wooden Products; and Manufacturing and Sales of Renewable Energy Products. It also offers timber villas for leisure resort clubs, tourist scenic spots, and parks; non-residential timber sheds for leisure or storage purposes, including pavilions and gazebos, etc.; and timber logs, as well as produces and sells timber houses, and related parts and structures. In addition, the company provides recreational products, such as play swings, sand tables, and outdoor rocking chairs for children for public parks and private gardens, and courtyards; outdoor furniture products comprising tables and chairs; indoor furniture products consisting of beds and cabinets; landscape garden products, such as flower carts, railings, and litter bins for use in gardens, scenic spots, courtyards, and parks; and pet-home products, including bird houses, dog homes and playhouses, rabbit hutches, hamster cages, etc. Further, the company trades in timber; and recycles and produces biomass pellet fuels. Additionally, the company is involved in the retail sale of outdoor wooden products through self-operated retail shops. The company was formerly known as Merry Garden Holdings Limited and changed its name to China Environmental Technology and Bioenergy Holdings Limited in June 2016. China Environmental Technology and Bioenergy Holdings Limited was founded in 1995 and is headquartered in Zhangping, China.

How the Company Makes Money

The company generates revenue primarily through the operation of waste-to-energy plants, which convert municipal and industrial waste into electricity and heat, thereby providing a dual benefit of waste management and energy production. Additionally, it earns income from the treatment of industrial waste, charging fees for the safe disposal and recycling of hazardous materials. Key revenue streams also include the sale of biofuels produced from organic waste and partnerships with local governments and municipalities for waste management services. Significant contracts with industrial clients for waste treatment services further contribute to its earnings, alongside government incentives for renewable energy initiatives.

China Environmental Technology and Bioenergy Holdings Limited Financial Statement Overview

Summary

Strong revenue growth (~37.8% from 2023 to 2024) and a solid balance sheet (72.3% equity ratio, low 0.21 debt-to-equity) are positives, but profitability remains weak (net margin 0.7%, EBIT margin -1.9%, ROE 0.3%) and cash generation deteriorated materially (operating and free cash flow fell to zero in 2024).

Income Statement

The company experienced a significant revenue growth of approximately 37.8% from 2023 to 2024, which is a positive indicator. However, the net profit margin remains low at 0.7% in 2024, despite a recovery from a negative margin in 2023. The EBIT margin is also negative at -1.9%, indicating operational inefficiencies. The gross profit margin improved to 12.1% in 2024, suggesting some improvement in cost management, but overall profitability is constrained.

Balance Sheet

The company maintains a healthy equity ratio of 72.3% in 2024, indicating strong equity financing. The debt-to-equity ratio is relatively low at 0.21, reflecting low financial leverage. However, the return on equity is minimal at 0.3%, which signals inefficiencies in generating profits from shareholders' equity despite a strong balance sheet position.

Cash Flow

The cash flow metrics indicate challenges, with operating cash flow dropping to zero in 2024 from $24.4 million in 2023. The free cash flow is also zero in 2024, a decrease from $20.3 million in 2023, illustrating struggles in generating cash. The lack of positive free cash flow limits financial flexibility and growth potential.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	422.64M	409.62M	297.53M	465.04M	608.07M	492.59M
Gross Profit	52.09M	49.72M	20.18M	53.87M	121.68M	4.44M
EBITDA	31.11M	30.77M	32.49M	29.25M	77.29M	-27.25M
Net Income	13.45M	2.98M	-2.36M	-6.56M	47.71M	-93.10M
Balance Sheet
Total Assets	1.27B	1.21B	1.05B	1.02B	989.38M	878.88M
Cash, Cash Equivalents and Short-Term Investments	389.27M	308.88M	208.13M	295.22M	154.51M	167.14M
Total Debt	222.55M	186.40M	86.90M	54.02M	58.43M	4.61M
Total Liabilities	378.29M	335.97M	182.37M	136.21M	113.98M	66.28M
Stockholders Equity	887.38M	874.86M	872.37M	879.49M	869.87M	812.60M
Cash Flow
Free Cash Flow	-7.65M	22.33M	20.33M	197.79M	-111.53M	60.73M
Operating Cash Flow	6.47M	33.47M	24.41M	204.99M	-98.32M	60.73M
Investing Cash Flow	-84.40M	-132.32M	-143.73M	-160.44M	-43.78M	-789.00K
Financing Cash Flow	100.90M	96.43M	36.80M	-547.00K	57.92M	-385.00K

China Environmental Technology and Bioenergy Holdings Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.98
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1237, the sentiment is Positive. The current price of 0.98 is above the 20-day moving average (MA) of 0.83, above the 50-day MA of 0.81, and above the 200-day MA of 0.74, indicating a bullish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 56.66 is Neutral, neither overbought nor oversold. The STOCH value of 61.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:1237.

China Environmental Technology and Bioenergy Holdings 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%
1237	55 Neutral	HK$87.39M	5.79	1.51%	―	38.42%	―
0396	52 Neutral	HK$168.89M	10.00	20.69%	8.93%	-13.44%	―
8118	48 Neutral	HK$56.00M	-1.23	-112.69%	―	-20.21%	-39.66%
1715	44 Neutral	HK$162.34M	-2.37	-39.50%	―	-32.54%	71.35%
8222	42 Neutral	HK$16.24M	-3.40	-49.85%	―	-7.75%	37.65%
1575	39 Underperform	HK$190.23M	-6.94	―	―	-50.43%	79.67%

China Environmental Technology and Bioenergy Holdings Limited Corporate Events

China Environmental Technology Clarifies Share Award Scheme Details

China Environmental Technology and Bioenergy Holdings Limited announced a clarification regarding its share award scheme, specifying that after the recent grant of share awards, 3,705 shares remain available for future grants under the 2025 Share Award Scheme. This announcement provides clarity on the company’s share distribution strategy, potentially impacting its market positioning and shareholder value.

The most recent analyst rating on (HK:1237) stock is a Hold with a HK$0.50 price target. To see the full list of analyst forecasts on China Environmental Technology and Bioenergy Holdings Limited stock, see the HK:1237 Stock Forecast page.

China Environmental Technology Grants 9.6 Million Share Awards to Employees

China Environmental Technology and Bioenergy Holdings Limited announced the grant of 9,600,000 share awards to 11 selected employees under its 2025 Share Award Scheme. This initiative aims to retain and reward employees for their contributions, align their interests with shareholders, and support the company’s long-term growth. The share awards, which have no performance targets, are designed to enhance employee commitment and attract high-caliber personnel, with a clawback mechanism in place for cases of fraud or misconduct.

The most recent analyst rating on (HK:1237) stock is a Hold with a HK$0.50 price target. To see the full list of analyst forecasts on China Environmental Technology and Bioenergy Holdings Limited stock, see the HK:1237 Stock Forecast page.

China Environmental Technology and Bioenergy Holdings Secures Shareholder Approval for Key Resolutions

China Environmental Technology and Bioenergy Holdings Limited announced that all proposed resolutions were successfully passed at their Extraordinary General Meeting held on October 16, 2025. The resolutions, which include the approval of the 2025 Share Award Scheme and the Service Provider Sublimit, received overwhelming support from shareholders, with over 99% of votes in favor. This outcome reflects strong shareholder confidence and positions the company favorably for future strategic initiatives.

The most recent analyst rating on (HK:1237) stock is a Hold with a HK$1.00 price target. To see the full list of analyst forecasts on China Environmental Technology and Bioenergy Holdings Limited stock, see the HK:1237 Stock Forecast page.