Zhong Ao Home Group Limited (1538) AI Stock Analysis

• Market Cap: HK$350.37M
• Dividend Yield: 6.25%
• Average Volume (3M): 155.40K
• Price to Earnings (P/E): 3.6
• Beta (1Y): 0.46
• Revenue Growth: 2.42%
• EPS Growth: 10.16%
• Country: HK
• Employees: 9,351
• Sector: Real Estate
• Sector Strength: 53
• Industry: Real Estate - Services
• EPS (TTM): 0.07
• Shares Outstanding: 854,550,000
• 10 Day Avg. Volume: 185,200
• 30 Day Avg. Volume: 155,400
• PEG Ratio: 0.40
• Price to Book (P/B): 0.23
• Price to Sales (P/S): 0.13
• P/FCF Ratio: 6.80
• 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: 69 Neutral
• Price Target: HK$0.50 ▲(28.21% Upside)

Zhong Ao Home Group's stock score is driven by its attractive valuation and solid financial performance, despite technical indicators showing bearish momentum. The low P/E ratio and high dividend yield are significant positives, but cash flow challenges and recent profitability declines need addressing to improve the outlook.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective service delivery, supporting long-term business expansion and stability.

Balance Sheet Strength

A strong equity position with low leverage reduces financial risk and enhances the company's ability to invest in growth opportunities.

Profitability

Healthy profit margins reflect efficient operations and pricing power, which are crucial for sustaining long-term profitability and competitive advantage.

Negative Factors

Cash Flow Challenges

Volatile cash flow and lack of free cash flow growth can limit financial flexibility, affecting the company's ability to invest in growth and meet obligations.

Profitability Decline

A decline in profitability could indicate rising costs or competitive pressures, potentially impacting long-term financial health if not addressed.

Cash Flow Management

Effective cash flow management is crucial for maintaining liquidity and supporting strategic initiatives. Issues here could hinder operational efficiency.

Zhong Ao Home Group Limited Business Overview & Revenue Model

Company Description

Zhong Ao Home Group Limited, an investment holding company, provides property services in the People's Republic of China. The company offers property management services; ancillary services, such as cleaning, gardening, security guard, repair and maintenance, and butler services to the residential and non-residential properties, and commercial and government buildings, as well as indoor and outdoor environmental cleaning, greening, and maintenance services; and real estate agency services on the leasing and sales assistance of residential properties and retail units provided to property developers and owners. It also provides sales assistance services to property developers; landscaping design and construction services; engineering services; and catering services, as well as engages in the sale of engineering spare parts. The company was founded in 2005 and is headquartered in Guangzhou, the People's Republic of China. Zhong Ao Home Group Limited is a subsidiary of Qichang International Limited.

How the Company Makes Money

Zhong Ao Home Group Limited generates revenue through multiple key streams. Primarily, the company earns income from the sale of its home improvement products, including furniture and renovation materials, through both direct retail and online platforms. Additionally, the company may engage in partnerships with real estate developers and contractors, providing bulk supplies and tailored solutions for residential projects, which further contributes to its revenue. The company also benefits from seasonal promotions and marketing campaigns designed to boost sales during peak home renovation times. Overall, the combination of product sales, strategic partnerships, and effective marketing efforts forms the backbone of Zhong Ao's revenue model.

Zhong Ao Home Group Limited Financial Statement Overview

Summary

Zhong Ao Home Group shows solid revenue growth and profitability with a strong balance sheet and low leverage. However, cash flow challenges and a slight decline in profitability margins suggest areas for improvement.

Income Statement

Zhong Ao Home Group has demonstrated consistent revenue growth with a notable revenue increase of 4.05% in 2024. The gross profit margin stands at 20.62% and net profit margin at 5.00%, both indicating healthy profitability. The EBIT margin of 7.44% and EBITDA margin of 9.49% further highlight operational efficiency. However, the slight decline in overall profitability compared to prior years suggests room for improvement.

Balance Sheet

The company maintains a strong equity position with an equity ratio of 53.59%. The debt-to-equity ratio of 0.05 indicates low leverage, minimizing financial risk. Return on equity (ROE) is at 8.55%, showing moderate profitability relative to shareholder equity. While the equity base is strong, the company could focus on enhancing returns for shareholders.

Cash Flow

The cash flow statement shows volatility with no operating or free cash flow reported for 2024. Historically, the company had a stable operating cash flow to net income ratio, but recent figures suggest potential cash flow management issues. The lack of free cash flow growth in 2024 is a concern. Ensuring positive cash flow will be key for future financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.79B	1.78B	1.71B	1.70B	1.87B	1.75B
Gross Profit	373.75M	366.81M	350.56M	358.23M	431.86M	441.64M
EBITDA	172.85M	168.86M	161.95M	161.72M	209.85M	209.04M
Net Income	91.01M	88.90M	80.05M	76.91M	106.28M	131.51M
Balance Sheet
Total Assets	1.99B	1.94B	2.07B	1.96B	2.19B	2.07B
Cash, Cash Equivalents and Short-Term Investments	480.88M	545.16M	534.54M	453.73M	450.54M	510.78M
Total Debt	46.84M	52.87M	61.26M	61.34M	68.78M	117.50M
Total Liabilities	855.23M	842.33M	1.03B	970.19M	1.20B	1.18B
Stockholders Equity	1.07B	1.04B	970.33M	916.59M	899.25M	814.33M
Cash Flow
Free Cash Flow	23.90M	34.81M	96.86M	63.45M	-14.94M	194.58M
Operating Cash Flow	47.22M	58.77M	124.08M	83.53M	33.83M	217.26M
Investing Cash Flow	-6.88M	-7.76M	-311.00K	-68.46M	-42.24M	-80.72M
Financing Cash Flow	-49.64M	-36.96M	-40.14M	-4.76M	-51.16M	-102.26M

Zhong Ao Home Group Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.39
• 50DMA: Positive
• 100DMA: Negative
• 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:1538, the sentiment is Positive. The current price of 0.39 is below the 20-day moving average (MA) of 0.40, below the 50-day MA of 0.40, and above the 200-day MA of 0.37, indicating a bullish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 59.57 is Neutral, neither overbought nor oversold. The STOCH value of 61.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:1538.

Zhong Ao Home Group Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1895	73 Outperform	HK$278.73M	2.66	15.85%	11.22%	11.13%	142.00%
1538	69 Neutral	HK$350.37M	3.57	8.72%	6.25%	2.42%	10.16%
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
2376	56 Neutral	HK$374.69M	8.79	7.09%	3.90%	-3.62%	26.66%
1153	50 Neutral	HK$272.21M	3.03	―	―	-2.44%	―
1778	49 Neutral	HK$364.44M	15.93	0.42%	―	14.13%	-6.61%