Synertone Communication Corporation (1613) AI Stock Analysis

• Market Cap: HK$75.02M
• Dividend Yield: N/A
• Average Volume (3M): 424.18K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.35
• Revenue Growth: -58.81%
• EPS Growth: -10.51%
• Country: HK
• Employees: 79
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): -0.02
• Shares Outstanding: 535,864,500
• 10 Day Avg. Volume: 493,964
• 30 Day Avg. Volume: 424,179
• PEG Ratio: -0.09
• Price to Book (P/B): 1.04
• Price to Sales (P/S): 0.96
• P/FCF Ratio: -2.92
• 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: 45 Neutral
• Price Target: HK$0.14 ▼(-14.37% Downside)
• Action: Reiterated Date: 02/05/26
• Date: Action: Reiterated 02/05/26

The score is primarily held back by weak financial performance (ongoing losses and negative operating cash flow), which outweighs the modestly positive technical backdrop. Valuation is also constrained by negative earnings (negative P/E) and no dividend yield data.

Positive Factors

Structural market exposure: IoT & smart cities

Synertone’s product mix targets long-duration infrastructure themes (telecom, IoT, smart cities). These markets are driven by multi-year public and private investment cycles, creating durable demand for network equipment and systems integration beyond short-term cycles.

Diversified revenue streams & recurring revenue

The company generates income from one-time systems projects plus recurring maintenance and software subscriptions. That mix supports revenue visibility, customer stickiness, and recurring cash inflows that help stabilize operations across project cycles and support long-term customer relationships.

Improving leverage and stable equity ratio

Balance-sheet metrics show reduced leverage trends and a stable equity ratio, signaling growing financial flexibility. Gradual deleveraging enhances ability to raise capital or absorb shocks, improving resilience for multi-quarter investments or contract execution.

Negative Factors

Persistent operating losses and negative margins

Ongoing net losses and negative EBIT margins indicate structural profitability issues. Continued operating losses erode equity, limit reinvestment capacity, and force reliance on external financing or restructuring to achieve sustainable earnings generation over the medium term.

Consistently negative operating cash flow

Repeated negative operating cash flow undermines liquidity and operational sustainability. Weak OCF constrains funding for capex, R&D, or working capital, increasing dependence on debt or equity raises and reducing margin for error during contract slippage or delayed collections.

Sharp revenue decline and margin pressure

A steep revenue decline and falling gross margins shrink scale benefits and worsen fixed-cost absorption. Reduced top-line and margin compression limit investment in sales and product development, making it harder to restore growth and competitiveness over multiple quarters.

Synertone Communication Corporation Business Overview & Revenue Model

Company Description

Synertone Communication Corporation, together with its subsidiaries, designs, researches and develops, produces, and sells automation control and intelligent building systems in the People's Republic of China, Hong Kong, and internationally. It operates through Building Intelligence, Control System, and Data Centre segments. The Building Intelligence segment provides video intercom system, security alarm solutions, and surveillance systems under the MOX brand for residential complexes; and smart home automation systems for new and existing households. The Control System segment offers automation hardware and software products, information systems platforms, as well as the industrial, monitoring, and scheduling management system solutions for municipal utilities industry. The Data Centre segment provides rental and maintenance services to computer equipment and machines, information technology infrastructure and platform, and robots, as well as other related services. Synertone Communication Corporation was founded in 2001 and is headquartered in Kowloon, Hong Kong.

How the Company Makes Money

Synertone generates revenue through multiple streams, primarily by selling its communication hardware and software solutions to telecommunications providers, enterprises, and government agencies. The company engages in contract-based projects, providing customized systems for large-scale communication networks and smart city applications. Additionally, Synertone earns recurring revenue from maintenance contracts and software subscriptions associated with its products. Strategic partnerships with key industry players enhance its market reach and may lead to joint ventures that further contribute to its earnings. Moreover, the company may benefit from government contracts and grants aimed at enhancing communication infrastructure, providing an additional layer of financial stability.

Synertone Communication Corporation Financial Statement Overview

Summary

Financials are weak overall: persistent net losses and negative EBIT margins, inconsistent revenue with a recent decline, and declining gross margins. Balance sheet leverage has improved but ROE remains negative, and operating cash flow is persistently negative, pressuring liquidity and sustainability.

Income Statement

The income statement reveals significant challenges with profitability and growth. The company has consistently reported negative net income and EBIT margins, indicating ongoing operational losses. Revenue growth has been inconsistent, with a notable decline in the most recent year. Gross profit margins have also decreased over time, suggesting pressure on cost management or pricing power.

Balance Sheet

The balance sheet shows moderate leverage with a debt-to-equity ratio that has improved over the years but remains a concern. The return on equity is negative, reflecting the company's inability to generate profits from its equity base. However, the equity ratio is relatively stable, indicating a reasonable level of equity financing compared to total assets.

Cash Flow

Cash flow analysis indicates persistent negative operating cash flows, which is a concern for liquidity and sustainability. The free cash flow has shown some growth, but the overall cash flow situation remains weak. The ratios of cash flow to net income suggest that cash flows are not effectively supporting profitability.

Breakdown	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	116.93M	62.58M	60.54M	114.17M	90.28M
Gross Profit	15.91M	24.76M	8.95M	22.93M	18.34M
EBITDA	-29.92M	-7.10M	-29.05M	-98.38M	-2.11M
Net Income	-32.49M	-17.84M	-40.97M	-109.68M	-15.13M
Balance Sheet
Total Assets	221.44M	223.09M	226.02M	271.45M	309.71M
Cash, Cash Equivalents and Short-Term Investments	11.03M	33.37M	2.35M	8.01M	4.18M
Total Debt	43.86M	51.19M	68.22M	81.48M	75.38M
Total Liabilities	113.73M	106.88M	157.65M	166.02M	147.07M
Stockholders Equity	107.99M	113.17M	69.13M	102.89M	156.22M
Cash Flow
Free Cash Flow	-38.52M	-17.50M	-6.22M	-21.90M	-14.52M
Operating Cash Flow	-38.20M	-17.48M	-5.99M	-11.20M	-11.18M
Investing Cash Flow	-676.00K	-2.66M	-580.00K	-34.57M	-25.97M
Financing Cash Flow	17.59M	50.78M	633.00K	49.45M	-5.30M

Synertone Communication Corporation Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.16
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1613, the sentiment is Negative. The current price of 0.16 is below the 20-day moving average (MA) of 0.18, below the 50-day MA of 0.18, and below the 200-day MA of 0.19, indicating a bearish trend. The MACD of -0.01 indicates Positive momentum. The RSI at 29.53 is Positive, neither overbought nor oversold. The STOCH value of 9.88 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1613.

Synertone Communication Corporation Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1473	68 Neutral	HK$609.44M	16.56	12.27%	2.53%	19.80%	―
1617	65 Neutral	HK$1.02B	15.67	7.40%	―	-9.34%	605.26%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
1720	56 Neutral	HK$858.00M	37.50	3.56%	―	8.78%	160.00%
1613	45 Neutral	HK$75.02M	-2.46	-30.44%	―	-58.81%	-10.51%
0947	45 Neutral	HK$294.83M	-2.25	-29.56%	―	-12.03%	-40.38%
0482	43 Neutral	HK$135.34M	-1.53	―	―	-2.92%	-48.35%

Synertone Communication Corporation Corporate Events

Synertone Raises HK$10.8 Million in Heavily Under-Subscribed Rights Issue

Synertone Communication Corporation completed a heavily under-subscribed rights issue, offering two rights shares for every existing share, with investors taking up only about 9.71% of the 897.5 million rights shares available. Attempts to place the remaining unsubscribed shares through a placing agent failed, resulting in no compensatory gain for non-participating shareholders, and the transaction modestly diluted existing stakes while leaving major shareholders’ absolute holdings unchanged.

Despite the weak subscription, the rights issue became unconditional on 11 February 2026 and raised gross proceeds of approximately HK$11.8 million, with net proceeds of about HK$10.8 million. The company plans to use the funds for general working capital and corporate purposes, including salaries, professional fees, rent and administrative costs, while undertaking a detailed review of its investment strategy and future financing options, highlighting ongoing funding pressures and the need to reassess its capital structure.

The most recent analyst rating on (HK:1613) stock is a Hold with a HK$0.19 price target. To see the full list of analyst forecasts on Synertone Communication Corporation stock, see the HK:1613 Stock Forecast page.

Synertone’s Deeply Under-Subscribed Rights Issue Triggers Large Compensatory Placing

Synertone Communication Corporation reported that its rights issue of up to 897,482,880 new shares was significantly under-subscribed, with only 87,123,051 rights shares validly applied for, representing about 9.71% of the offer. As a result, approximately 810,359,829 unsubscribed rights shares will be dealt with through compensatory arrangements, under which a placing agent has been appointed on a best-effort basis to place these shares with independent investors, and any premium over the subscription price achieved in this placing will be returned pro rata (subject to a HK$100 minimum) to eligible shareholders who did not fully take up their entitlements. Any unsubscribed rights shares that cannot be placed will not be issued, reducing the final size of the capital-raising exercise, and the company plans to announce the final results of the rights issue, the placing outcome and the net gain per placing share in February 2026, a development that will determine how much fresh equity capital Synertone ultimately secures and how its shareholder base may shift.

The most recent analyst rating on (HK:1613) stock is a Hold with a HK$0.17 price target. To see the full list of analyst forecasts on Synertone Communication Corporation stock, see the HK:1613 Stock Forecast page.

Synertone Communication Corporation’s Rights Issue Approved by Shareholders

Synertone Communication Corporation announced that its proposed Rights Issue was approved in an extraordinary general meeting held on December 15, 2025. The resolution, which allows for two Rights Shares for every existing Share, was overwhelmingly supported by shareholders, with 99.99% voting in favor. This approval is expected to impact the company’s capital structure positively, potentially enhancing its market positioning and providing additional resources for growth.

The most recent analyst rating on (HK:1613) stock is a Hold with a HK$0.20 price target. To see the full list of analyst forecasts on Synertone Communication Corporation stock, see the HK:1613 Stock Forecast page.