Frontage Holdings Corp. (1521) AI Stock Analysis

• Market Cap: HK$2.06B
• Dividend Yield: N/A
• Average Volume (3M): 468.13K
• Price to Earnings (P/E): 68.7
• Beta (1Y): 1.06
• Revenue Growth: -3.04%
• EPS Growth: -37.18%
• Country: HK
• Employees: 1,560
• Sector: Healthcare
• Sector Strength: 45
• Industry: Biotechnology
• EPS (TTM): 0.03
• Shares Outstanding: 2,035,724,900
• 10 Day Avg. Volume: 431,000
• 30 Day Avg. Volume: 468,133
• PEG Ratio: -6.36
• Price to Book (P/B): 1.39
• Price to Sales (P/S): 1.82
• P/FCF Ratio: 31.47
• 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: Moderate Sell
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 55 Neutral
• Price Target: HK$1.00 ▼(-0.99% Downside)

Frontage Holdings Corp. faces significant challenges with declining profitability and bearish technical indicators. The high P/E ratio suggests overvaluation, and the lack of a dividend yield further detracts from its appeal. Despite strong cash flow management and a solid balance sheet, the overall outlook is cautious due to weak market momentum and high valuation.

Positive Factors

Cash Generation Ability

Strong cash generation supports operational stability, providing the company with flexibility to invest in growth opportunities and manage debt.

Balance Sheet Health

A strong equity base indicates a stable capital structure, enhancing the company's ability to withstand economic fluctuations and invest in strategic initiatives.

Operational Efficiency

Maintaining positive EBIT and EBITDA margins demonstrates operational efficiency, which is crucial for sustaining profitability and competitive positioning.

Negative Factors

Profitability Decline

A significant decline in net profit margin reflects challenges in cost management and pricing power, potentially affecting long-term profitability.

Revenue Contraction

Negative revenue growth suggests potential market share loss or demand challenges, which could hinder future expansion and competitiveness.

Leverage Increase

Increased leverage can limit financial flexibility and elevate risk, impacting the company's ability to invest in growth or weather downturns.

Frontage Holdings Corp. Business Overview & Revenue Model

Company Description

Frontage Holdings Corp. is a leading contract research organization (CRO) that provides comprehensive laboratory and clinical research services to pharmaceutical and biotechnology companies globally. The company operates across various sectors, including preclinical and clinical research, bioanalytical testing, and drug development. Frontage specializes in supporting drug discovery and development processes, offering a range of services that help clients optimize their product pipelines and bring new therapeutics to market efficiently.

How the Company Makes Money

Frontage Holdings Corp. generates revenue primarily through its contract research services, which include preclinical studies, clinical trial management, and bioanalytical testing. The company charges clients for the services rendered, typically through fixed-price contracts or time-and-materials billing. Key revenue streams include fees from pharmaceutical and biotechnology clients for research and development services, as well as partnerships with academic institutions and other research organizations that enhance their capabilities and market reach. Additionally, Frontage may benefit from collaborations with larger pharmaceutical companies that look to outsource specific aspects of their drug development processes, further contributing to its earnings.

Frontage Holdings Corp. Financial Statement Overview

Summary

Frontage Holdings Corp. demonstrates mixed financial performance. The income statement reflects challenges with declining profitability and revenue contraction. However, the balance sheet remains solid with a strong equity base, albeit with slight leverage increases. Cash flow statements reveal strong cash generation and management, ensuring liquidity. Overall, the company shows resilience but faces profitability pressures that need addressing.

Income Statement

The income statement shows a declining trend in profitability with the gross profit margin decreasing from 31.7% in 2023 to 27.4% in 2024. Net profit margin also fell from 4.2% to 0.3%, indicating reduced efficiency in converting revenue into profit. Revenue growth was slightly negative at -1.9% from 2023 to 2024, impacting overall performance. Despite these challenges, the company managed to maintain positive EBIT and EBITDA margins at 3.1% and 13.9% respectively in 2024.

Balance Sheet

The balance sheet remains robust with a healthy equity ratio of approximately 60.1% in 2024, suggesting a strong capital structure. However, the debt-to-equity ratio increased slightly to 0.46, indicating a moderate level of leverage. Return on equity declined significantly to 0.2% in 2024, highlighting challenges in generating returns for shareholders. Overall, the company maintains a stable financial position despite some leverage risks.

Cash Flow

Cash flow analysis shows positive free cash flow in 2024, driven by strong operating cash flow of $40.6 million, which covers capital expenditures. Operating cash flow to net income ratio stands at 51.4, indicating efficient cash generation relative to net income. Free cash flow growth is substantial at 118.6% from 2023 to 2024, reflecting improved cash management. Overall, cash flow health appears strong, supporting operational stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	253.01M	254.91M	259.86M	250.36M	184.44M	125.81M
Gross Profit	70.28M	69.81M	78.39M	89.19M	66.70M	41.48M
EBITDA	39.00M	35.37M	45.02M	54.10M	42.56M	23.20M
Net Income	3.83M	791.00K	10.81M	25.73M	18.43M	17.15M
Balance Sheet
Total Assets	544.27M	553.59M	571.87M	550.59M	475.84M	382.71M
Cash, Cash Equivalents and Short-Term Investments	33.66M	44.09M	54.60M	90.52M	148.71M	214.54M
Total Debt	137.70M	154.37M	145.10M	118.19M	57.85M	40.62M
Total Liabilities	202.83M	219.32M	226.72M	214.75M	152.76M	93.84M
Stockholders Equity	340.17M	333.00M	342.50M	333.08M	319.84M	287.87M
Cash Flow
Free Cash Flow	67.32M	14.75M	18.59M	14.78M	-5.83M	17.08M
Operating Cash Flow	54.77M	40.64M	39.74M	62.44M	44.55M	31.65M
Investing Cash Flow	-30.18M	-41.48M	-87.63M	-147.91M	-107.44M	-25.89M
Financing Cash Flow	-36.26M	-10.22M	12.91M	30.66M	-5.54M	-2.91M

Frontage Holdings Corp. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.01
• 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:1521, the sentiment is Negative. The current price of 1.01 is below the 20-day moving average (MA) of 1.04, below the 50-day MA of 1.10, and below the 200-day MA of 1.22, indicating a bearish trend. The MACD of -0.03 indicates Negative momentum. The RSI at 36.93 is Neutral, neither overbought nor oversold. The STOCH value of 54.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1521.

Frontage Holdings Corp. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2696	66 Neutral	HK$32.53B	37.04	27.37%	―	2.57%	18.79%
1548	60 Neutral	HK$27.90B	-19.65	―	―	―	―
1521	55 Neutral	HK$2.06B	68.71	1.13%	―	-3.04%	-37.18%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
1877	43 Neutral	HK$36.27B	-22.40	-15.06%	―	38.56%	48.26%

Frontage Holdings Corp. Corporate Events

Frontage Holdings Delays Circular Dispatch for Major Transaction

Frontage Holdings Corporation, a company incorporated in the Cayman Islands, announced a delay in the dispatch of a circular related to a major and connected transaction involving a Share Transfer Agreement. The circular, which includes vital information such as financial details and recommendations for shareholders, was initially expected to be sent by November 20, 2025, but will now be dispatched by December 24, 2025, due to the need for additional time to finalize its contents.

Frontage Holdings Reports Significant Profit Growth in Q3 2025

Frontage Holdings Corporation announced its unaudited financial results for the third quarter of 2025, reporting a slight revenue increase to approximately US$191.4 million for the nine months ending September 30, 2025. The company’s net profit saw a significant rise to US$5.6 million, compared to US$0.2 million in the same period in 2024, with an adjusted net profit increase of 32.5% to US$12.6 million. The announcement highlights the company’s improved financial performance, which may positively impact its market position and investor confidence.

Frontage Holdings Announces Major Acquisition to Expand Market Presence

Frontage Holdings Corporation has announced a major and connected transaction involving the acquisition of the entire issued share capital of a target company through its wholly-owned subsidiary, Frontage Shanghai. The acquisition, valued at RMB270,000,000, will result in the target company becoming a wholly-owned subsidiary, with its financial results consolidated into Frontage’s financial statements. This move is significant as it constitutes a major transaction under Hong Kong’s Listing Rules, requiring shareholder approval and the formation of an Independent Board Committee to advise on the transaction. The acquisition is expected to enhance Frontage’s market position and operational capabilities, although it is subject to certain conditions precedent before completion.