Nanfang Communication Holdings Ltd. (1617) AI Stock Analysis

• Market Cap: HK$284.59M
• Dividend Yield: N/A
• Average Volume (3M): 5.89M
• Price to Earnings (P/E): 4.4
• Beta (1Y): 0.72
• 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$0.19 ▲(88.00% Upside)

The score is driven by solid financial positioning with improving top-line/gross margin trends but weighed down by volatile profitability and negative free cash flow. Valuation is supportive due to the low P/E, while technicals are positive overall but tempered by overbought momentum signals.

Positive Factors

Improving Revenue & Gross Margins

Sustained improvements in revenue and gross margin suggest better pricing power or cost control. Over a 2–6 month horizon, this durable trend can support stronger operating profitability, improve gross cash generation, and increase resilience to demand fluctuations.

Strong Equity Position

A solid equity base and reasonable leverage provide financial flexibility to fund capex or absorb shocks without triggering dilutive financing. This structural balance sheet strength supports medium-term investment capacity and reduces refinancing and solvency risk.

Improved Return on Equity

Rising ROE indicates more efficient use of shareholders' capital from operational gains or margin improvement. If sustained, higher ROE supports long-term value creation via reinvestment efficiency, stronger cash returns to shareholders, or improved capital allocation.

Negative Factors

Weak Cash Generation

Negative free cash flow and a recent zero operating cash flow period show poor cash conversion of earnings. This structural cash weakness constrains funding for growth, increases reliance on external financing, and elevates liquidity risk over the medium term.

Volatile Net Profitability

Significant swings in net margins point to earnings sensitivity to cost swings, pricing pressures, or one-offs. Persistent volatility undermines predictability of earnings, complicates capital allocation, and raises the risk profile for sustaining returns to shareholders.

Elevated Total Liabilities Risk

Even with reasonable debt-to-equity, elevated total liabilities increase solvency and covenant exposure if cash flows remain weak. Over 2–6 months, this could pressure liquidity, raise borrowing costs, or force deleveraging actions that hamper strategic flexibility.

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

Income statement strength is moderate (revenue growth and improved gross margin), and the balance sheet is relatively solid with improved ROE and reasonable leverage. Offsetting these positives are volatile net profitability and weak cash generation, including recent negative free cash flow and zero operating cash flow in the latest period.

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: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

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 0.12, 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 81.42 is Negative, neither overbought nor oversold. The STOCH value of 93.06 is Negative, 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$284.59M	4.35	7.40%	―	-9.34%	605.26%
1720	63 Neutral	HK$156.20M	6.83	3.56%	―	8.78%	160.00%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
1202	59 Neutral	HK$436.00M	-573.68	-0.09%	―	-23.93%	-109.41%
9963	52 Neutral	HK$445.47M	-4.13	-24.22%	―	-20.95%	-13.14%
1300	48 Neutral	HK$1.22B	-47.59	-0.68%	―	6.88%	-49.48%
1613	46 Neutral	HK$258.48M	-3.38	-30.44%	―	-58.81%	-10.51%