Shun Wo Group Holdings Ltd. (1591) AI Stock Analysis

• Market Cap: HK$57.60M
• Dividend Yield: N/A
• Average Volume (3M): 989.07K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.63
• Revenue Growth: 11.27%
• EPS Growth: -1272.22%
• Country: HK
• Employees: 59
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): -0.04
• Shares Outstanding: 400,000,000
• 10 Day Avg. Volume: 2,452,600
• 30 Day Avg. Volume: 989,066
• PEG Ratio: 0.10
• Price to Book (P/B): 0.45
• Price to Sales (P/S): 0.38
• P/FCF Ratio: -5.07
• 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: 44 Neutral
• Price Target: HK$0.13 ▼(-7.86% Downside)

The score is driven primarily by weakened financial performance—losses and sharply negative cash flow in 2025—despite the offsetting benefit of very low leverage. Technicals add pressure with a clear downtrend and negative momentum indicators, while valuation provides limited support given the negative P/E and no dividend yield data.

Positive Factors

Conservative balance sheet (very low leverage)

Very low leverage provides structural resilience in the cyclical construction/engineering sector, reducing default and refinancing risk. This financial flexibility supports surviving downturns, bidding selectively on projects, and funding working-capital needs without forcing asset sales or dilution.

Historical revenue expansion

Sustained top-line expansion into 2023–2024 indicates structural demand for the company’s services and ability to scale operations. A history of revenue growth supports backlog replenishment, supplier relationships and fixed-cost absorption, which help margins when activity normalizes.

Ability to deliver strong margins (historical)

The firm has demonstrated it can achieve healthy operating and net margins in favorable conditions, implying competent project execution, pricing power on certain contracts, and operational efficiency that could be reinstated if cost pressures and project mix improve.

Negative Factors

Sharp cash-flow deterioration in 2025

A sudden shift to negative operating and free cash flow signals working-capital strain or elevated investment needs. Persisting weak cash conversion raises funding risk, may force external financing despite low leverage, and can constrain capex, tendering ability, and timely project completion.

Profitability reversal to losses

Swinging from healthy margins to losses indicates earnings are sensitive to project execution, pricing or cost overruns. This earnings instability undermines forecasting, increases the probability of margin normalization at lower levels, and could pressure supplier and client relationships long term.

Extreme EPS volatility

An outsized EPS collapse reflects highly volatile earnings and potential one-off losses or structural headwinds. Such volatility weakens stakeholder confidence, complicates capital allocation and planning, and raises the risk of covenant breaches or costly refinancing if adverse trends persist.

Shun Wo Group Holdings Ltd. Business Overview & Revenue Model

Company Description

Shun Wo Group Holdings Limited, an investment holding company, undertakes various foundation works in Hong Kong. It undertakes excavation and lateral support, socketed H-piling and mini-piling, and pile caps construction works. The company was founded in 1995 and is headquartered in Sai Wan Ho, Hong Kong. Shun Wo Group Holdings Limited is a subsidiary of May City Holdings Limited.

How the Company Makes Money

Shun Wo Group Holdings Ltd. generates revenue mainly through its construction and engineering services. The company earns money by undertaking contracts for foundation works and related construction projects. These contracts often involve agreements with private developers and public sector entities for building infrastructure and other construction endeavors. The company's revenue streams are primarily from project-based work, where they bid for and secure contracts that stipulate the scope of work, timelines, and payment terms. Additionally, Shun Wo Group may engage in partnerships or joint ventures with other construction firms to undertake larger or more complex projects, thereby broadening its revenue opportunities. The company's profitability is influenced by factors such as the demand for construction services, the competitive landscape, and the efficiency with which it can complete projects within budget and time constraints.

Shun Wo Group Holdings Ltd. Financial Statement Overview

Summary

Shun Wo Group Holdings Ltd. demonstrates a solid financial position with notable improvements in profitability and cash flow generation. The company exhibits a strong balance sheet with no debt, high equity, and a commendable return on equity. Positive trends in revenue growth and profit margins reflect effective management and operational efficiency. Potential risks are minimized due to the absence of leverage, positioning the company well for future growth and stability.

Income Statement

Shun Wo Group Holdings Ltd. has shown a strong recovery in its income statement over the years. The gross profit margin improved significantly from prior years, reaching approximately 17.7% in the latest annual report. Net profit margin also increased to about 11.8%, reflecting enhanced profitability. Revenue growth rate was robust at 6.6% from the previous year, indicating a positive growth trajectory. The company also achieved a healthy EBIT margin of 11.7% and an EBITDA margin of 13.7%, demonstrating operational efficiency. Overall, the financial trajectory is positive with steady improvements in profitability metrics.

Balance Sheet

The balance sheet of Shun Wo Group Holdings Ltd. is strong with no debt, resulting in a debt-to-equity ratio of 0. The company maintains a favorable equity ratio of 71.6%, indicating a solid capital structure. Return on Equity (ROE) is impressive at 27.1%, highlighting efficient utilization of equity to generate profits. High stockholders' equity compared to total assets reflects financial stability and reduced financial risk.

Cash Flow

The cash flow statement shows promising trends, with the free cash flow growing substantially by 64.3% from the previous year, showcasing effective cash management. The operating cash flow to net income ratio is 1.24, indicating that the company is generating ample cash from its operations relative to its net income. The free cash flow to net income ratio is also strong at 1.17, reflecting robust liquidity and cash conversion capability. Despite previous years of negative cash flow, the company has significantly improved its cash generation capacity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	180.94M	166.25M	333.43M	312.91M	242.29M	144.36M
Gross Profit	21.77M	25.34M	60.79M	22.35M	14.66M	18.26M
EBITDA	-10.42M	668.00K	45.75M	23.50M	944.00K	-3.65M
Net Income	-16.89M	-5.69M	39.47M	18.93M	-4.50M	-6.07M
Balance Sheet
Total Assets	180.88M	203.41M	203.41M	169.46M	142.19M	111.29M
Cash, Cash Equivalents and Short-Term Investments	82.06M	85.24M	93.39M	51.18M	22.98M	44.80M
Total Debt	385.00K	606.00K	0.00	0.00	0.00	0.00
Total Liabilities	57.13M	63.39M	57.70M	63.21M	54.87M	19.48M
Stockholders Equity	123.75M	140.02M	145.71M	106.25M	87.32M	91.81M
Cash Flow
Free Cash Flow	-9.98M	-12.30M	46.27M	28.16M	-23.82M	2.97M
Operating Cash Flow	-2.09M	-1.80M	48.90M	37.01M	-21.36M	12.34M
Investing Cash Flow	-6.58M	-6.04M	-541.00K	-6.81M	-454.00K	-11.27M
Financing Cash Flow	-429.00K	-316.00K	0.00	0.00	0.00	-67.00K

Shun Wo Group Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.14
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1591, the sentiment is Negative. The current price of 0.14 is below the 20-day moving average (MA) of 0.14, below the 50-day MA of 0.14, and below the 200-day MA of 0.15, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 40.11 is Neutral, neither overbought nor oversold. The STOCH value of 57.26 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1591.

Shun Wo Group Holdings Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1637	65 Neutral	HK$108.00M	9.18	4.53%	―	-40.54%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
1472	50 Neutral	HK$59.00M	-4.03	-4.84%	―	71.16%	-67.47%
1718	48 Neutral	HK$70.08M	-0.78	-46.48%	―	-0.64%	13.72%
1591	44 Neutral	HK$57.60M	-3.15	-12.77%	―	11.27%	-1272.22%
2195	43 Neutral	HK$77.81M	-2.49	-19.00%	―	48.86%	54.49%

Shun Wo Group Holdings Ltd. Corporate Events

Shun Wo Group Announces HK$18.67 Million Rights Issue

Shun Wo Group Holdings Ltd. has announced a proposed rights issue to raise up to approximately HK$18.67 million by issuing 133,333,333 Rights Shares at HK$0.14 each. The proceeds are intended for acquiring plant and machinery and general working capital. The rights issue is non-underwritten and available only to qualifying shareholders, with no minimum subscription level required. The company has ensured compliance with relevant listing rules, indicating no significant dilution effect on its share capital.

Shun Wo Group Holdings Reports Increased Revenue but Rising Losses in Interim Results

Shun Wo Group Holdings Ltd. reported its unaudited interim results for the six months ending September 30, 2025, revealing a significant increase in revenue to HK$78,730,000 from HK$64,040,000 in the same period in 2024. Despite the revenue growth, the company faced increased direct costs and administrative expenses, resulting in a loss of HK$16,271,000, a notable rise from the previous year’s loss of HK$5,077,000. This financial performance indicates challenges in managing operational costs, which could impact the company’s market positioning and stakeholder confidence.

Shun Wo Group Issues Profit Warning Amid Rising Losses

Shun Wo Group Holdings Limited has issued a profit warning, anticipating a significant increase in net loss for the six months ending September 2025, compared to the same period in 2024. The increase in net loss is attributed to intense competition in the foundation industry, reduced income from bank deposits and project management fees, higher impairment losses, and increased administrative expenses.

Shun Wo Group Holdings Ltd. Announces Board Meeting for Interim Results Review

Shun Wo Group Holdings Ltd. has announced a board meeting scheduled for November 27, 2025, to review and approve the unaudited interim results for the six months ending September 30, 2025, and to consider the declaration of an interim dividend. This meeting is significant for stakeholders as it will provide insights into the company’s financial performance and potential dividend payouts, which could impact the company’s market positioning and investor relations.

Shun Wo Group Holdings Announces Shareholding Structure Change

Shun Wo Group Holdings Limited announced a change in the shareholding structure of its controlling shareholder, May City. Mr. YH Wong has acquired an additional 30% shareholding interest from Mr. Lai, resulting in Mr. Wong holding 70% and Mr. Tony Wong holding 30% of May City. This transaction does not impact the management and operations of the company.

Shun Wo Group Holdings Ltd. Announces Board and Committee Structure

Shun Wo Group Holdings Ltd. has announced the composition of its board of directors and the roles within its established committees. The announcement outlines the leadership structure, potentially impacting the company’s governance and strategic decision-making, which may influence stakeholder confidence.