Able Engineering Holdings Ltd. (1627) AI Stock Analysis

• Market Cap: HK$1.14B
• Dividend Yield: 9.09%
• Average Volume (3M): 645.40K
• Price to Earnings (P/E): 3.2
• Beta (1Y): 0.19
• Revenue Growth: 26.57%
• EPS Growth: -2.39%
• Country: HK
• Employees: 560
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 0.05
• Shares Outstanding: 2,000,000,000
• 10 Day Avg. Volume: 277,200
• 30 Day Avg. Volume: 645,399
• PEG Ratio: 0.48
• Price to Book (P/B): 0.63
• Price to Sales (P/S): 0.14
• P/FCF Ratio: 3.68
• 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: 66 Neutral
• Price Target: HK$0.62 ▼(-9.41% Downside)
• Action: Downgraded Date: 01/22/26
• Date: Action: Downgraded 01/22/26

The score is primarily supported by strong financial health (notably deleveraging and improved ROE) and attractive valuation (low P/E and high dividend yield). These positives are tempered by weak technical signals (price below key moving averages with negative MACD) and cash flow concerns driven by a sharp free-cash-flow decline.

Positive Factors

Low leverage / deleveraging

Material deleveraging to a 0.06 debt-to-equity ratio materially improves financial flexibility and lowers interest burden. This strengthens the company's capacity to bid on larger public and private projects, absorb short-term cost shocks, and fund working capital or distributions without relying on new debt over coming months.

Robust revenue growth & gross margin

Sustained 24% revenue growth alongside gross margin expansion to 7.31% reflects stronger contract wins or improved project mix. Durable top-line expansion and better gross profitability increase operating leverage, support coverage of fixed costs, and enhance the business's ability to deliver positive operating results across upcoming contract cycles.

Positive operating cash generation

Operating cash flow remains positive, indicating the core contracting operations generate cash even as free cash flow fell. This operational cash provides a base to fund project working capital, reduces immediate refinancing needs, and supports business continuity and bid activity while management works to restore free cash conversion.

Negative Factors

Sharp free cash flow decline

A 57.5% drop in free cash flow signals weaker cash conversion and more cash tied up in operations or capex. Persistently depressed FCF can limit the firm's ability to fund upfront project costs, bid bonds, investments, or dividends without tapping reserves or external financing, constraining operational flexibility.

Net margin compression

Net margin compression narrows the already thin profitability typical in construction. A drop to 2.87% reduces buffers against cost overruns, input price inflation, or project delays. If margins remain constricted, cash generation and return metrics could be strained despite revenue growth, impairing long-term resilience.

Tendering and execution exposure

The company’s model relies on winning tenders and executing projects on time and on budget. This structural exposure to competitive bidding, subcontractor performance, and input cost volatility can persistently influence revenue visibility, margin stability, and working capital needs across multiple contract cycles.

Able Engineering Holdings Ltd. Business Overview & Revenue Model

Company Description

Able Engineering Holdings Limited, an investment holding company, provides building construction, repair, maintenance, and alteration and addition works in Hong Kong. It constructs private and public housing, institutional and private buildings, etc.; offers fitting out and interior works; and provides design and building services. The company is also involved in the property holding activities. It serves government departments and developers or owners. The company was founded in 1976 and is headquartered in Kowloon Tong, Hong Kong. Able Engineering Holdings Limited is a subsidiary of Golden Lux Holdings Limited.

How the Company Makes Money

The company makes money mainly by providing construction and engineering contracting services and recognizing revenue from construction contracts. Key revenue streams typically include (i) contract revenues earned from building construction and civil engineering works based on project progress and completion milestones under customer contracts, and (ii) variations, subcontracting arrangements, and ancillary works that are part of or related to awarded projects. Earnings are influenced by its ability to secure new projects through tendering, manage project execution (including labor, materials, and subcontractor costs), and control project risks (such as delays, cost overruns, and claims). Specific information on significant partnerships, named customers, or a quantified breakdown of revenue by segment is null.

Able Engineering Holdings Ltd. Financial Statement Overview

Summary

Strong fundamentals overall: revenue grew 24% and the balance sheet improved materially with debt-to-equity reduced to 0.06 and ROE up to 13.17%. Offsetting this, net margin fell (3.72% to 2.87%) and free cash flow declined 57.5%, indicating weaker cash generation and some profitability pressure.

Income Statement

Able Engineering Holdings Ltd. has demonstrated strong revenue growth of 24% in the latest year, with improving gross profit margins from 5.87% to 7.31%. However, the net profit margin decreased slightly from 3.72% to 2.87%, indicating some pressure on profitability. The EBIT and EBITDA margins are stable, reflecting efficient operational management. Overall, the income statement shows robust growth with some profitability challenges.

Balance Sheet

The company has significantly reduced its debt-to-equity ratio from 0.31 to 0.06, indicating a strong deleveraging effort. Return on equity improved to 13.17%, showcasing effective use of equity to generate profits. The equity ratio remains healthy, reflecting a solid financial position. The balance sheet is strong, with reduced leverage and improved returns.

Cash Flow

Free cash flow has decreased by 57.5%, which is a concern, although the company maintains a positive operating cash flow. The operating cash flow to net income ratio is 0.19, suggesting moderate cash conversion efficiency. The free cash flow to net income ratio is 0.46, indicating some challenges in converting income into free cash flow. Overall, cash flow management shows room for improvement.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2021
Income Statement
Total Revenue	8.13B	7.97B	5.51B	5.08B	5.58B	3.71B
Gross Profit	601.41M	582.50M	323.54M	269.30M	209.77M	116.58M
EBITDA	703.65M	475.82M	358.90M	302.22M	246.52M	135.03M
Net Income	236.91M	228.56M	204.89M	174.07M	122.88M	94.70M
Balance Sheet
Total Assets	5.31B	5.28B	4.91B	4.63B	3.93B	3.06B
Cash, Cash Equivalents and Short-Term Investments	1.64B	1.74B	2.10B	1.73B	1.52B	1.01B
Total Debt	11.94M	97.54M	496.95M	619.69M	715.68M	852.67M
Total Liabilities	3.58B	3.54B	3.29B	3.11B	2.50B	1.71B
Stockholders Equity	1.73B	1.74B	1.62B	1.52B	1.42B	1.35B
Cash Flow
Free Cash Flow	-62.87M	298.77M	610.59M	576.35M	735.14M	-400.92M
Operating Cash Flow	227.79M	652.74M	748.79M	770.21M	793.75M	182.03M
Investing Cash Flow	-39.65M	-89.01M	-393.20M	-374.40M	-65.59M	-574.22M
Financing Cash Flow	-734.93M	-651.25M	-227.86M	-186.71M	-225.42M	680.48M

Able Engineering Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.68
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1627, the sentiment is Negative. The current price of 0.68 is above the 20-day moving average (MA) of 0.57, above the 50-day MA of 0.58, and above the 200-day MA of 0.65, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 51.19 is Neutral, neither overbought nor oversold. The STOCH value of 41.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1627.

Able Engineering Holdings Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1977	79 Outperform	HK$1.47B	3.42	6.00%	5.17%	-7.60%	37.99%
0240	75 Outperform	HK$2.19B	1.98	18.23%	12.15%	13.76%	25.01%
1627	66 Neutral	HK$1.14B	3.23	14.15%	9.09%	26.57%	-2.39%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
2236	52 Neutral	HK$1.96B	4.80	9.56%	―	96.63%	―
1499	45 Neutral	HK$972.06M	707.71	-7.49%	―	-16.73%	65.63%
1683	41 Neutral	HK$395.64M	-236.90	-8.55%	―	-37.55%	-1727.78%

Able Engineering Holdings Ltd. Corporate Events

Able Engineering Responds to Government Probe Into Housing Construction Malpractices

Able Engineering Holdings has issued a voluntary announcement in response to a Hong Kong government press release concerning construction malpractices at three Light Public Housing sites involving one of its subsidiaries. The company acknowledges the contents of the government release, notes that the incidents may involve criminal acts by individuals, and states that it had proactively reported the cases to the police prior to the announcement; it pledges full cooperation with investigations by all relevant authorities and advises shareholders and potential investors to exercise caution when dealing in its securities.

The most recent analyst rating on (HK:1627) stock is a Buy with a HK$1.00 price target. To see the full list of analyst forecasts on Able Engineering Holdings Ltd. stock, see the HK:1627 Stock Forecast page.