Nanfang Communication Holdings Ltd. (1617) AI Stock Analysis

• Market Cap: HK$187.02M
• Dividend Yield: N/A
• Average Volume (3M): 5.89M
• Price to Earnings (P/E): 2.9
• Beta (1Y): 0.62
• Revenue Growth: -9.34%
• EPS Growth: 605.26%
• Country: HK
• Employees: 300
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): 0.02
• Shares Outstanding: 1,626,240,000
• 10 Day Avg. Volume: 2,788,800
• 30 Day Avg. Volume: 5,888,133
• PEG Ratio: <0.01
• Price to Book (P/B): 0.18
• Price to Sales (P/S): 0.28
• P/FCF Ratio: -2.09
• 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: 65 Neutral
• Price Target: HK$0.12 ▲(21.00% Upside)

The score is driven mainly by improving revenue/gross margin and a relatively stable balance sheet, offset by weak cash generation and volatile net profitability. Valuation is supportive due to a very low P/E, while technical signals are mixed with modestly positive price positioning but lack of strong momentum confirmation.

Positive Factors

Balance Sheet Stability

A strong equity base and reasonable debt-to-equity ratio support long-term financial resilience, enabling investment in product development and bids for infrastructure contracts. This structural balance reduces insolvency risk and preserves strategic optionality over the next several quarters.

Improving Revenue and Gross Margin

Sustained improvement in top-line and gross margins indicates better pricing or cost control, supporting durable operating leverage. If maintained, these trends can translate into stronger recurring profitability and a firmer foundation for reinvestment in R&D and customer contracts.

Higher Return on Equity

A materially improved ROE signals more efficient capital allocation and higher earnings per unit of equity. Over months, sustained ROE improvement supports shareholder value creation, enhances reinvestment capacity, and validates management execution on strategic initiatives.

Negative Factors

Weak Cash Generation

Persistent negative free cash flow and absent operating cash inflows undermine the company's ability to self-fund capex, service liabilities, or pay dividends. Over a medium horizon this raises financing needs, increases vulnerability to rate rises, and constrains strategic investments.

Volatile Net Profit Margins

Large swings in net margins reduce earnings predictability and complicate budgeting and capital allocation. Structural volatility can signal exposure to cyclical end markets, input-cost swings, or one-off items, weakening confidence in sustainable cash generation over months ahead.

High Total Liabilities

Elevated total liabilities raise refinancing and interest-rate risk, limiting financial flexibility. Even with solid equity, high leverage can amplify downturns, increase funding costs, and constrain the company’s ability to pursue large contracts or R&D investments over the coming quarters.

Nanfang Communication Holdings Ltd. Business Overview & Revenue Model

Company Description

Nanfang Communication Holdings Limited, an investment holding company, manufactures and sells optical fiber cables and optical distribution network devices in the People's Republic of China. The company offers communication cable, as well as processes and sells pre-painted steel sheets. Its customers primarily include national and regional telecommunications network operators and telecommunications supporting services providers. The company was founded in 1992 and is headquartered in Changzhou, the People's Republic of China. Nanfang Communication Holdings Limited is a subsidiary of Pacific Mind Development Limited.

How the Company Makes Money

Nanfang Communication Holdings Ltd. generates revenue through multiple streams, primarily from the sale of its communication equipment and solutions. This includes a wide range of products such as optical fibers, cables, and wireless communication devices. The company also earns income through service contracts, providing maintenance and technical support for its products. Significant partnerships with telecommunications providers and technology firms enhance its market reach and drive revenue growth. Additionally, government contracts and participation in large-scale infrastructure projects contribute substantially to its earnings, allowing Nanfang to capitalize on the expanding demand for advanced communication technologies.

Nanfang Communication Holdings Ltd. Financial Statement Overview

Summary

The company shows positive revenue growth and improved gross profit margins. However, net profit margins are volatile, and negative cash flows indicate operational inefficiencies.

Income Statement

The company shows a positive trend in revenue growth, with a notable increase from the previous year. The gross profit margin has improved, indicating better cost management. However, net profit margins remain a concern, with significant fluctuations over the years, suggesting volatility in bottom-line profitability.

Balance Sheet

The company's balance sheet indicates a strong equity position with a reasonable debt-to-equity ratio, suggesting financial stability. The return on equity has improved substantially, reflecting better utilization of shareholders' equity. Nonetheless, the high level of total liabilities may pose potential risks.

Cash Flow

The cash flow situation is mixed, with recent periods of negative free cash flow, indicating challenges in generating cash from operations. The operating cash flow to net income ratio is not available due to zero operating cash flow in the latest period, highlighting operational cash generation issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	466.87M	538.10M	522.26M	633.71M	438.32M	379.52M
Gross Profit	98.18M	98.47M	70.67M	57.36M	12.95M	38.73M
EBITDA	28.60M	21.68M	12.12M	-36.74M	-86.72M	-40.21M
Net Income	60.55M	39.94M	5.20M	-8.10M	-59.89M	-19.18M
Balance Sheet
Total Assets	1.40B	1.51B	1.42B	1.48B	1.36B	1.27B
Cash, Cash Equivalents and Short-Term Investments	271.07M	211.58M	247.77M	254.22M	372.11M	207.25M
Total Debt	259.00M	482.23M	310.21M	297.36M	280.43M	201.27M
Total Liabilities	552.02M	691.36M	641.85M	711.42M	592.49M	516.34M
Stockholders Equity	844.12M	817.98M	778.05M	772.85M	767.11M	755.85M
Cash Flow
Free Cash Flow	-66.96M	-70.75M	-68.11M	-15.21M	-86.85M	-96.43M
Operating Cash Flow	-27.98M	-8.19M	9.82M	12.89M	-84.79M	-82.62M
Investing Cash Flow	-56.20M	-77.95M	6.78M	-136.72M	109.68M	-73.66M
Financing Cash Flow	73.35M	39.46M	414.00K	3.40M	140.69M	44.80M

Nanfang Communication Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.10
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1617, the sentiment is Positive. The current price of 0.1 is below the 20-day moving average (MA) of 0.10, below the 50-day MA of 0.11, and below the 200-day MA of 0.11, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 80.10 is Negative, neither overbought nor oversold. The STOCH value of 54.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:1617.

Nanfang Communication Holdings Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1617	65 Neutral	HK$187.02M	2.86	7.40%	―	-9.34%	605.26%
1720	63 Neutral	HK$128.70M	5.63	3.56%	―	8.78%	160.00%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
1202	54 Neutral	HK$352.00M	-463.16	-0.09%	―	-23.93%	-109.41%
9963	48 Neutral	HK$771.36M	-7.15	-24.22%	―	-20.95%	-13.14%
1300	47 Neutral	HK$884.00M	-34.48	-0.68%	―	6.88%	-49.48%
1613	46 Neutral	HK$231.55M	-3.03	-30.44%	―	-58.81%	-10.51%

Nanfang Communication Holdings Ltd. Corporate Events

Nanfang Communication Completes Major Asset Disposal

Nanfang Communication Holdings Limited, a company incorporated in the Cayman Islands, has announced the completion of a very substantial disposal as of October 24, 2025. This transaction, finalized under the amended Sale and Purchase Agreement, results in the company ceasing to hold any shareholding in the Target Company, potentially impacting its operational focus and market strategy.

Nanfang Communication Announces Further Variation to Disposal Terms

Nanfang Communication Holdings Limited announced a further variation to the terms of a very substantial disposal involving Pacific Smart and Dongshan Precision. The fourth supplemental agreement outlines the arrangements for withholding tax payments related to the sale and purchase agreement, including estimated and actual tax amounts, payment processes, and the return of a tax payment deposit.

Nanfang Communication Holdings Announces Further Variation to Disposal Terms

Nanfang Communication Holdings Ltd. has announced a further variation to the terms of a very substantial disposal, involving a third supplemental agreement with Pacific Smart and Dongshan Precision. The agreement confirms that the completion date for the disposal will be on or before October 31, 2025. This development is significant for the company’s operations as it marks a key step in the disposal process, potentially impacting its financial structure and strategic direction. Shareholders and potential investors will be informed upon completion of the disposal.

Nanfang Communication to Develop New Industrial Park in China

Nanfang Communication Holdings Ltd. announced plans to develop a Science and Technology Ecological Industrial Park by redeveloping its former factory sites in Changzhou City, Jiangsu Province, China. The project, with an investment of approximately RMB50 million, aims to consolidate production capacity, reduce costs, and create new revenue streams by leasing or selling parts of the park. This initiative aligns with the company’s long-term strategies and is expected to enhance its operational efficiency, attract talent, and improve its market image.