SH Group (Holdings) Limited (1637) AI Stock Analysis

• Market Cap: HK$58.00M
• Dividend Yield: N/A
• Average Volume (3M): 19.53K
• Price to Earnings (P/E): 10.7
• Beta (1Y): 0.47
• Revenue Growth: -19.49%
• EPS Growth: -5.88%
• Country: HK
• Employees: 157
• Sector: Industrials
• Sector Strength: 93
• Industry: Engineering & Construction
• EPS (TTM): 0.04
• Shares Outstanding: 400,000,000
• 10 Day Avg. Volume: 22,200
• 30 Day Avg. Volume: 19,533
• PEG Ratio: -0.31
• Price to Book (P/B): 0.26
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.84
• 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

• Rating: 49 Neutral
• Price Target: ―

SH Group (Holdings) Limited's stock is currently underperforming, primarily due to significant financial challenges including negative profitability and cash flow issues. While there is positive market momentum, the technical indicators suggest caution. The company’s valuation is weak with no dividend yield and a negative P/E ratio, which highlights the need for operational and strategic improvements.

SH Group (Holdings) Limited Business Overview & Revenue Model

Company Description

SH Group (Holdings) Limited (1637) is a company primarily engaged in the provision of electrical and mechanical engineering services. The company operates mainly in Hong Kong, where it delivers a comprehensive range of services including the installation, maintenance, and management of electrical and mechanical systems. SH Group (Holdings) Limited serves a diverse clientele that includes residential, commercial, and industrial sectors, ensuring the effective deployment and operation of complex engineering systems.

How the Company Makes Money

SH Group (Holdings) Limited makes money through multiple revenue streams centered around its core services in electrical and mechanical engineering. The company generates income from project-based contracts for the installation of electrical and mechanical systems, which typically involve large-scale developments and infrastructure projects. Additionally, the company earns revenues from maintenance contracts that provide ongoing support and management of these systems, ensuring their optimal performance and compliance with safety standards. SH Group (Holdings) Limited's earnings are further bolstered by its relationships with key partners and clients in the building and construction industries, enabling it to secure repeat business and long-term agreements.

SH Group (Holdings) Limited Financial Statement Overview

Summary

SH Group (Holdings) Limited faces significant financial challenges with negative profitability metrics and declining revenue. The balance sheet remains stable with low leverage, but poor cash flow performance indicates operational difficulties. Strategic improvements are required to enhance revenue growth and operational efficiency.

Income Statement

The company has experienced a decline in revenue from the previous year, with a revenue growth rate of -8.2%. Gross profit margin stands at 1.86%, showing a significant drop from previous periods, indicating declining operational efficiency. The net profit margin is negative at -1.74%, highlighting ongoing losses. The company also reports negative EBIT and EBITDA margins, signaling underlying profitability challenges.

Balance Sheet

The balance sheet reflects a moderate financial position. The debt-to-equity ratio is 0.16, indicating relatively low leverage. However, the return on equity is negative at -6.65%, reflecting poor profitability on shareholder's equity. The equity ratio is strong at 46.2%, suggesting a stable capital structure despite declining equity over recent periods.

Cash Flow

Cash flow analysis shows significant challenges, with a negative free cash flow of -119.7 million and a negative free cash flow growth rate of 1.42%. The operating cash flow to net income ratio is negative, underlining cash generation issues. This reflects difficulties in converting sales into cash.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	745.05M	876.18M	954.25M	753.33M	707.59M	568.43M
Gross Profit	11.86M	16.29M	8.66M	45.60M	61.40M	54.77M
EBITDA	-16.67M	-12.77M	-10.45M	19.28M	55.49M	36.01M
Net Income	-12.98M	-15.21M	-11.00M	11.73M	44.13M	26.03M
Balance Sheet
Total Assets	410.50M	495.45M	506.74M	508.11M	512.38M	384.91M
Cash, Cash Equivalents and Short-Term Investments	80.56M	44.63M	114.46M	249.54M	241.04M	141.51M
Total Debt	11.65M	37.59M	630.00K	2.75M	4.34M	13.41M
Total Liabilities	190.34M	266.54M	262.62M	217.28M	217.68M	127.54M
Stockholders Equity	220.16M	228.91M	244.12M	290.84M	294.70M	257.37M
Cash Flow
Free Cash Flow	68.71M	-119.71M	-118.04M	46.06M	138.60M	55.36M
Operating Cash Flow	69.02M	-119.39M	-117.51M	46.42M	138.84M	56.60M
Investing Cash Flow	7.32M	71.83M	-50.22M	-15.14M	-25.72M	22.14M
Financing Cash Flow	-34.96M	30.84M	-20.44M	-17.78M	-16.44M	-10.70M

SH Group (Holdings) Limited Technical Analysis

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

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1637, the sentiment is Positive. The current price of 0.14 is below the 20-day moving average (MA) of 0.15, below the 50-day MA of 0.15, and above the 200-day MA of 0.12, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 50.66 is Neutral, neither overbought nor oversold. The STOCH value of 7.78 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:1637.

SH Group (Holdings) Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
I07	65 Neutral	€136.82M	15.97	4.17%	1.54%	8.98%	70.54%
1663	61 Neutral	HK$204.51M	10.00	1.09%	―	105.34%	75.69%
6865	59 Neutral	$39.33B	63.75	1.56%	2.72%	-22.88%	-89.15%
Sector *	58 Neutral	HK$14.16B	4.57	-3.01%	6.80%	3.67%	-54.16%
1637	49 Neutral	HK$58.00M	10.74	2.33%	―	-19.49%	-5.88%
3800	48 Neutral	$36.74B	―	-11.91%	―	-56.32%	-272.70%

SH Group (Holdings) Limited Corporate Events

SH Group (Holdings) Limited Reveals Board and Committee Roles

SH Group (Holdings) Limited has announced the composition of its board of directors and their roles within the company. The board consists of executive, non-executive, and independent non-executive directors, who are also members of various board committees such as the audit, nomination, and remuneration committees. This announcement clarifies the governance structure and role allocation within the company, potentially impacting its operational decisions and strategic direction.

SH Group Appoints New Member to Nomination Committee

SH Group (Holdings) Limited has announced the appointment of Ms. Yu Tsz Wai, a non-executive Director, to the nomination committee of its Board, effective January 20, 2025. This appointment may influence the company’s governance and strategic direction, reflecting its commitment to enhancing board operations.