Hong Kong Finance Group Ltd. (1273) AI Stock Analysis

• Market Cap: HK$159.77M
• Dividend Yield: 6.75%
• Average Volume (3M): 34.80K
• Price to Earnings (P/E): 3.4
• Beta (1Y): 0.13
• Revenue Growth: 7.06%
• EPS Growth: -11.84%
• Country: HK
• Employees: 50
• Sector: Financial
• Sector Strength: 83
• Industry: Financial - Mortgages
• EPS (TTM): 0.11
• Shares Outstanding: 415,000,000
• 10 Day Avg. Volume: 50,400
• 30 Day Avg. Volume: 34,800
• PEG Ratio: -0.03
• Price to Book (P/B): 0.18
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 4.17
• 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

• Rating: 67 Neutral
• Price Target: ―

Hong Kong Finance Group Ltd. has a solid financial foundation with strong profitability and efficient operations, but faces challenges with declining revenue and cash flow. The stock is technically weak, showing bearish indicators. However, it is attractively valued with a low P/E ratio and high dividend yield, which could attract value and income investors. Overall, the stock presents a mixed outlook with some strengths but also significant challenges.

Hong Kong Finance Group Ltd. Business Overview & Revenue Model

Company Description

Hong Kong Finance Group Limited, an investment holding company, provides property mortgage loans to individuals and corporations under the Hong Kong Finance brand name in Hong Kong. It also offers personal loans for HOS and public housing homeowners, as well as loans for SMEs; unsecured loans for property owners; and mortgage further advance, carpark mortgage, and mortgage loan transfer services. The company was founded in 1996 and is headquartered in Admiralty, Hong Kong. Hong Kong Finance Group Limited is a subsidiary of Tin Ching Holdings Limited.

How the Company Makes Money

Hong Kong Finance Group Ltd. generates revenue through the interest and fees charged on the personal loans and mortgage loans it provides. The company earns money by lending funds to individuals and businesses and then collecting interest payments over the life of the loan. Additionally, they may charge origination fees, late payment fees, and other service-related fees, contributing to their overall income. The firm's earnings are significantly influenced by the prevailing interest rates, the creditworthiness of its borrowers, and the overall demand for lending products in the Hong Kong market. Partnerships with real estate agencies or other financial institutions could also enhance their revenue streams, although specific partnerships are not disclosed.

Hong Kong Finance Group Ltd. Financial Statement Overview

Summary

Overall, Hong Kong Finance Group Ltd. displays strong profitability and efficient operations with high margins. However, the decline in revenue and cash flow generation poses concerns for future growth. The balance sheet remains solid with a strong equity base and moderate leverage, which provides financial stability.

Income Statement

The company shows a strong gross profit margin of approximately 89.3% and a respectable net profit margin of 31.2% in the latest year. However, the revenue has decreased by 16.3% compared to the previous year, indicating a decline in growth. EBIT and EBITDA margins are healthy at 56.3% and 58.6%, respectively, suggesting efficient cost management.

Balance Sheet

The debt-to-equity ratio is relatively moderate at 0.38, indicating a balanced approach to leveraging. The company’s ROE stands at 5.2%, which is decent but not particularly high. The equity ratio is robust at 71.9%, highlighting a strong equity base relative to total assets, which mitigates risk.

Cash Flow

There is a significant decline in operating cash flow from the previous year, resulting in a challenging free cash flow growth rate of -79.4%. The operating cash flow to net income ratio is 0.68, indicating a solid but not exceptional conversion of income to cash. Free cash flow to net income ratio stands at 0.63, reflecting moderate cash flow generation relative to profitability.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
126.88M	136.73M	163.27M	154.88M	157.60M	164.34M
	Gross Profit
90.17M	136.73M	163.27M	154.88M	157.60M	164.34M
	EBIT
58.92M	70.28M	101.56M	96.82M	113.05M	59.39M
	EBITDA
82.47M	80.15M	104.43M	99.83M	116.07M	62.42M
	Net Income Common Stockholders
46.34M	42.69M	58.88M	70.55M	73.22M	55.49M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
28.38M	28.38M	29.88M	24.88M	80.02M	15.28M
	Total Assets
1.13B	1.13B	1.13B	1.18B	1.10B	1.18B
	Total Debt
307.04M	307.04M	326.57M	426.44M	406.71M	548.96M
	Net Debt
278.66M	278.66M	296.69M	401.56M	326.69M	533.68M
	Total Liabilities
318.38M	318.38M	341.49M	440.45M	425.13M	563.89M
	Stockholders Equity
816.62M	816.62M	784.72M	736.62M	676.86M	614.43M
Cash Flow		Free Cash Flow
35.82M	26.78M	129.74M	-34.98M	219.09M	-18.73M
	Operating Cash Flow
41.17M	28.96M	130.05M	-33.85M	221.06M	-18.49M
	Investing Cash Flow
-3.31M	-139.00K	-14.30M	-29.13M	-1.98M	25.22M
	Financing Cash Flow
-47.55M	-30.32M	-110.75M	7.84M	-154.34M	-28.75M

Hong Kong Finance Group Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.38
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1273, the sentiment is Positive. The current price of 0.38 is above the 20-day moving average (MA) of 0.37, above the 50-day MA of 0.36, and above the 200-day MA of 0.34, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 85.09 is Negative, neither overbought nor oversold. The STOCH value of 83.33 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:1273.

Hong Kong Finance Group Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1273	67 Neutral	HK$159.77M	3.45	5.67%	6.75%	7.06%	-11.84%
Sector *	64 Neutral	$12.85B	9.81	7.59%	16985.65%	12.30%	-7.71%
CRGGF		$6.22B	12.16	9.94%	4.34%	―	―
TGASF		$1.59B	7.54	6.93%	4.50%	―	―
0645	55 Neutral	HK$62.09M	―	-19.55%	―	-27.98%	-16.20%
0827	35 Underperform	HK$192.90M	―	-76.72%	―	-12.18%	-222.34%

Hong Kong Finance Group Ltd. Corporate Events

Hong Kong Finance Group Announces New Loan Agreement

Hong Kong Finance Group Limited, a company incorporated in the Cayman Islands, has announced a new loan agreement with Customer AC for HK$8,000,000. This financial assistance is intended to settle a previous loan of the same amount, and it is secured by a first mortgage on a commercial property in Hong Kong. The transaction is considered discloseable under the Listing Rules due to its aggregate percentage ratio. The company has assessed the credit risk as manageable, given the borrower’s satisfactory repayment history and the property’s prime location.

Hong Kong Finance Group Announces New Loan Agreement as Discloseable Transaction

Hong Kong Finance Group Limited has announced a new loan agreement with Customers G, H, and I, providing a principal amount of HK$8,000,000. This new loan will be used to settle the outstanding balance of a previous loan, and is part of a series of loans that, due to their aggregate size, constitute a discloseable transaction under Hong Kong’s Listing Rules. The loan is secured by a legal charge on a residential property valued at approximately HK$10,800,000, and carries an interest rate of 15% per annum over a six-month term. This transaction highlights the company’s strategic financial management and compliance with regulatory requirements, potentially impacting its market positioning and stakeholder relations.

Hong Kong Finance Group Announces New Loan Agreement

Hong Kong Finance Group Limited announced the provision of a new loan agreement amounting to HK$18,000,000 to a group of borrowers. This loan is intended to settle a previous loan of the same amount, with the new agreement secured by a second mortgage on a residential property in Kowloon. The company has assessed the credit risk as manageable due to the prime location of the collateral, the solid financial background of some borrowers, and their satisfactory repayment history. This transaction is considered discloseable under the Listing Rules due to its size relative to the company’s financial metrics.