Sinomax Group Ltd. (1418) AI Stock Analysis

• Market Cap: HK$404.25M
• Dividend Yield: 7.79%
• Average Volume (3M): 293.40K
• Price to Earnings (P/E): 3.9
• Beta (1Y): 0.67
• Revenue Growth: -1.05%
• EPS Growth: -2.97%
• Country: HK
• Employees: 3,333
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Furnishings, Fixtures & Appliances
• EPS (TTM): 0.01
• Shares Outstanding: 1,750,002,100
• 10 Day Avg. Volume: 335,200
• 30 Day Avg. Volume: 293,400
• PEG Ratio: 0.03
• Price to Book (P/B): 0.45
• Price to Sales (P/S): 0.11
• P/FCF Ratio: 2.38
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: HK$0.50 ▲(117.39% Upside)

Sinomax Group Ltd. receives a strong overall score due to its attractive valuation with a low P/E ratio and high dividend yield. The financial performance shows improvement in revenue and operational margins, though cash flow concerns persist. Technical analysis indicates positive momentum, but caution is advised due to potential overbought conditions.

Positive Factors

Revenue Growth

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

Operational Margins

Enhanced operational margins suggest increased efficiency and cost control, which can lead to improved profitability over time.

Market Position

A strong market position in the home furnishings sector provides a competitive edge and potential for sustained revenue streams.

Negative Factors

Cash Flow Concerns

Zero cash flow can hinder the company's ability to invest in growth opportunities and manage financial obligations, impacting long-term stability.

Profitability Challenges

Low net profit margins can limit the company's ability to generate sufficient returns, affecting its capacity to reinvest in the business.

Leverage Risk

Moderate leverage requires careful financial management to avoid excessive debt burdens that could constrain future growth and flexibility.

Sinomax Group Ltd. Business Overview & Revenue Model

Company Description

Sinomax Group Ltd. (1418) is a leading manufacturer and supplier specializing in the production of polyurethane products, primarily focusing on bedding and upholstery solutions. The company operates in the home furnishings sector, providing a diverse range of high-quality products that include mattresses, pillows, and other comfort-related items. Sinomax leverages advanced technology and innovative designs to cater to both retail and commercial markets, enhancing customer satisfaction through comfort and durability.

How the Company Makes Money

Sinomax Group Ltd. generates revenue primarily through the sale of its core products, which include mattresses, pillows, and other bedding accessories. The company's revenue model is based on direct sales to consumers as well as wholesale distributions to retailers, hotels, and other commercial entities. Key revenue streams include product sales, custom manufacturing services for specific clients, and partnerships with international retailers that help expand their market reach. Additionally, the company benefits from economies of scale in production, allowing it to maintain competitive pricing while maximizing profit margins.

Sinomax Group Ltd. Financial Statement Overview

Summary

Sinomax Group Ltd. shows strong revenue growth and improved operational margins. However, profitability and cash flow stability remain challenges, with zero operating and free cash flow in the latest period. The balance sheet is moderately leveraged, indicating a need for careful financial risk management.

Income Statement

Sinomax Group Ltd. has shown a positive revenue growth trend over the years, with a significant increase from 2023 to 2024. The gross profit margin has also improved, indicating enhanced cost management. However, the net profit margin remains relatively low, though there has been a notable improvement compared to previous losses. The EBIT and EBITDA margins have shown recovery, reflecting better operational efficiency.

Balance Sheet

The company's balance sheet reflects moderate leverage, with a stable debt-to-equity ratio. Stockholders' equity has increased, contributing to a better equity ratio. However, the return on equity (ROE) is moderate, indicating room for improvement in profitability relative to equity.

Cash Flow

Sinomax Group Ltd.'s cash flow situation shows potential concerns, with operating cash flow and free cash flow at zero in the latest period. Previous periods showed positive free cash flow growth, but the recent lack of free cash flow could pose liquidity challenges. Despite past positive cash flow to net income ratios, recent data is unavailable for a comprehensive assessment.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.98B	4.09B	3.61B	3.17B	4.26B	3.23B
Gross Profit	982.13M	1.05B	919.72M	586.55M	716.95M	623.82M
EBITDA	283.97M	324.37M	320.07M	163.28M	234.82M	251.80M
Net Income	102.88M	138.07M	62.59M	-35.97M	15.30M	58.52M
Balance Sheet
Total Assets	2.73B	2.56B	2.41B	2.24B	2.83B	2.51B
Cash, Cash Equivalents and Short-Term Investments	348.32M	262.44M	309.92M	168.96M	229.71M	147.18M
Total Debt	891.26M	743.79M	722.62M	822.00M	944.87M	785.45M
Total Liabilities	1.72B	1.56B	1.49B	1.35B	1.82B	1.56B
Stockholders Equity	973.52M	973.71M	925.76M	895.20M	992.82M	954.51M
Cash Flow
Free Cash Flow	35.68M	184.10M	358.11M	98.55M	69.70M	46.68M
Operating Cash Flow	120.51M	249.94M	420.35M	149.60M	118.34M	76.11M
Investing Cash Flow	-140.32M	-82.70M	-49.46M	-20.79M	28.19M	12.75M
Financing Cash Flow	34.93M	-214.09M	-231.43M	-191.18M	-55.86M	-197.91M

Sinomax Group Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.23
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1418, the sentiment is Negative. The current price of 0.23 is below the 20-day moving average (MA) of 0.24, below the 50-day MA of 0.24, and below the 200-day MA of 0.27, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 43.21 is Neutral, neither overbought nor oversold. The STOCH value of 11.73 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1418.

Sinomax Group Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1418	73 Outperform	HK$404.25M	3.93	10.72%	7.79%	-1.05%	-2.97%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
1373	60 Neutral	HK$533.47M	11.31	5.44%	7.33%	-5.59%	-52.98%
0396	53 Neutral	HK$90.51M	5.36	20.69%	8.93%	-13.44%	―
1575	44 Neutral	HK$157.99M	-5.76	―	―	-50.43%	79.67%
2127	41 Neutral	HK$76.58M	-0.04	―	―	-72.73%	-764.81%
1198	39 Underperform	HK$265.05M	-0.51	-36.67%	―	―	―

Sinomax Group Ltd. Corporate Events

Sinomax Group Issues Supplemental Announcement on 2024 Annual Report

Sinomax Group Limited has issued a supplemental announcement to its 2024 Annual Report, providing additional information regarding related party transactions. The company confirms compliance with Chapter 14A of the Listing Rules, specifically highlighting transactions related to the Dongguan Lease Agreement, which are considered connected transactions. This announcement ensures transparency and compliance, reinforcing Sinomax’s commitment to adhering to regulatory requirements.

Sinomax Announces Continuing Connected Transactions Post-Subscription

Sinomax Group Limited has announced a series of continuing connected transactions following a subscription agreement that resulted in a change of ownership structure for a target company. The transactions involve the Seller, now an indirect subsidiary of Sinomax, and the Buyer, an associate of M Logistical, a substantial shareholder at the subsidiary level. The agreements have been deemed fair and reasonable by the independent non-executive directors and are in the interests of the company and its shareholders. These transactions are subject to specific reporting and review requirements under the Listing Rules but are exempt from certain other requirements.

Sinomax Group Ltd. Announces Further Share Subscription with Strategic Valuation Approach

Sinomax Group Ltd. announced a further subscription of shares in a target company, utilizing the Price-to-EBITDA ratio to determine the consideration for the investment. The company excluded one-off exceptional expenses from the target company’s adjusted EBITDA, including a transaction bonus and bad debt expense, to ensure the valuation accurately reflects core profitability and operational performance.