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

• Market Cap: HK$132.00M
• Dividend Yield: N/A
• Average Volume (3M): 51.60K
• Price to Earnings (P/E): 12.9
• Beta (1Y): 0.64
• Revenue Growth: -40.54%
• EPS Growth: N/A
• Country: HK
• Employees: 157
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): -0.01
• Shares Outstanding: 400,000,000
• 10 Day Avg. Volume: 8,400
• 30 Day Avg. Volume: 51,600
• PEG Ratio: -0.07
• Price to Book (P/B): 0.21
• Price to Sales (P/S): 0.08
• P/FCF Ratio: 0.55
• 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: 59 Neutral
• Price Target: HK$0.39 ▲(68.26% Upside)

The score is driven primarily by improving profitability and strong cash flow with a very low-leverage balance sheet, partially offset by declining revenue and thin margins. Technicals are supportive but appear overbought, and valuation is moderate based on the provided P/E.

Positive Factors

Low leverage and strong equity position

A very low debt-to-equity ratio provides durable financial flexibility for a property and hospitality operator. It reduces interest burden, preserves capacity to fund development or opportunistic acquisitions with equity or cash, and helps the firm withstand cyclical downturns.

Strong free cash flow improvement

Sustained free cash flow growth indicates the business converts earnings into cash, supporting reinvestment, debt repayment, and potential shareholder returns. For a capital-intensive real estate firm, robust FCF supports long-term project funding without frequent external financing.

Return to profitability

Regaining positive net income signals operational recovery and stabilizing core business performance. Over the medium term this can rebuild retained earnings, improve credit metrics, and enable management to prioritize strategic investments in property and hospitality assets.

Negative Factors

Declining revenue trend

A pronounced revenue decline undermines scale benefits and raises questions about demand for developments and hospitality services. Persistently lower top line can erode margins, limit reinvestment capacity, and constrain long-term growth unless revenue drivers are restored.

Very thin gross and net margins

Extremely slim margins leave little room to absorb rising costs or pricing pressure typical in property and hospitality sectors. Low margin structure is a durable vulnerability that can impair cash buffers and reduce the firm's ability to finance redevelopment or service level upgrades.

Modest return on equity

A low ROE implies management earns limited returns on shareholders' capital, questioning capital allocation effectiveness. Over time this can deter reinvestment and limit shareholder value creation unless asset yields improve or strategy shifts toward higher-return projects.

SH Group (Holdings) Limited Business Overview & Revenue Model

Company Description

SH Group (Holdings) Limited, an investment holding company, provides electrical and mechanical (E&M) engineering services for public and private sectors in Hong Kong. It engages in the supply, installation, and maintenance of mechanical ventilation, and air-conditioning systems; and provides services related to low voltage electrical systems and other E&M systems, including fire services systems, and plumbing and drainage systems. The company was founded in 1986 and is headquartered in Kowloon, Hong Kong.

How the Company Makes Money

SH Group (Holdings) Limited generates revenue primarily through property development and management, leasing of commercial and residential properties, and providing hospitality services. Key revenue streams include rental income from its real estate portfolio, sales of developed properties, and revenue from its hospitality ventures such as hotels and resorts. The company may also engage in partnerships with other firms in the real estate and hospitality sectors to enhance its service offerings and expand its market reach, contributing to its overall earnings.

SH Group (Holdings) Limited Financial Statement Overview

Summary

Mixed fundamentals: revenue declined sharply (-18.33%) and margins are thin (gross 5.42%, net 0.89%), but profitability has turned positive, free cash flow growth is strong (+28.82%), and leverage is very low (debt-to-equity 0.23%).

Income Statement

The company has experienced a significant decline in revenue over the past year, with a revenue growth rate of -18.33%. Gross profit margin is low at 5.42%, and net profit margin is also weak at 0.89%. However, the company has managed to return to profitability with a positive net income, indicating some recovery from previous losses.

Balance Sheet

The balance sheet shows a strong equity position with a very low debt-to-equity ratio of 0.23%. Return on equity is modest at 2.30%, suggesting limited profitability relative to equity. The equity ratio is healthy, indicating a stable financial structure with low leverage risk.

Cash Flow

The company has shown a strong improvement in cash flow, with a free cash flow growth rate of 28.82%. The operating cash flow to net income ratio is 0.62, indicating good cash generation relative to net income. Free cash flow closely matches net income, suggesting efficient cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	443.04M	608.49M	876.18M	954.25M	753.33M	707.59M
Gross Profit	36.97M	32.97M	16.29M	8.66M	45.60M	61.40M
EBITDA	15.18M	10.84M	-13.83M	-10.45M	23.86M	45.04M
Net Income	10.21M	5.39M	-15.21M	-11.00M	11.73M	44.13M
Balance Sheet
Total Assets	370.38M	378.04M	495.45M	506.74M	508.11M	512.38M
Cash, Cash Equivalents and Short-Term Investments	150.77M	99.87M	44.63M	114.46M	249.54M	241.04M
Total Debt	2.37M	534.00K	37.59M	630.00K	2.75M	4.34M
Total Liabilities	140.01M	143.75M	266.54M	262.62M	217.28M	217.68M
Stockholders Equity	230.37M	234.29M	228.91M	244.12M	290.84M	294.70M
Cash Flow
Free Cash Flow	80.52M	88.51M	-119.71M	-118.04M	46.06M	138.60M
Operating Cash Flow	80.51M	88.52M	-119.39M	-117.51M	46.42M	138.84M
Investing Cash Flow	4.05M	3.04M	71.83M	-50.22M	-15.14M	-25.72M
Financing Cash Flow	-12.04M	-38.68M	30.84M	-20.44M	-17.78M	-16.44M

SH Group (Holdings) Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.23
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 0.23 is below the 20-day moving average (MA) of 0.30, below the 50-day MA of 0.26, and above the 200-day MA of 0.20, indicating a bullish trend. The MACD of 0.02 indicates Positive momentum. The RSI at 61.87 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 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
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
1637	59 Neutral	HK$132.00M	12.94	4.53%	―	-40.54%	―
1630	53 Neutral	HK$130.50M	-7.19	-14.78%	―	-28.21%	34.59%
1472	50 Neutral	HK$91.00M	-6.55	-4.84%	―	71.16%	-67.47%
1591	47 Neutral	HK$57.60M	-3.41	-12.77%	―	11.27%	-1272.22%
1718	46 Neutral	HK$77.59M	-0.86	-46.48%	―	-0.64%	13.72%
1826	44 Neutral	HK$259.74M	-487.50	―	―	11.52%	98.72%

SH Group (Holdings) Limited Corporate Events

SH Group Reports Improved Profitability Amid Revenue Decline

SH Group (Holdings) Limited reported its interim results for the six months ended 30 September 2025, showing a significant decrease in revenue to HK$164.6 million from HK$330.0 million in the previous year. However, the company managed to turn a gross loss into a gross profit of HK$2.8 million and reduced its loss attributable to owners to HK$3.9 million, down from HK$8.7 million, indicating some operational improvements despite the revenue decline.

SH Group Announces Board Meeting to Review Interim Results

SH Group (Holdings) Limited has announced an upcoming board meeting scheduled for November 25, 2025, to discuss and approve the unaudited interim results for the six months ending September 30, 2025, and to consider the declaration of an interim dividend. This meeting could have implications for the company’s financial strategy and shareholder returns, highlighting the company’s ongoing commitment to transparency and stakeholder engagement.

SH Group Reports Significant Reduction in Net Loss

SH Group (Holdings) Limited has announced a significant reduction in its net loss for the six months ending September 30, 2025. The company attributes this improvement to effective cost control measures, enhanced operational efficiency, and an increase in the value of financial assets. This announcement indicates a positive shift in the company’s financial health, which may impact its market positioning and investor confidence.