Huazhang Technology Holding Ltd. (1673) AI Stock Analysis

• Market Cap: HK$359.13M
• Dividend Yield: N/A
• Average Volume (3M): 241.53K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.35
• Revenue Growth: -14.00%
• EPS Growth: 87.71%
• Country: HK
• Employees: 227
• Sector: Industrials
• Sector Strength: 90
• Industry: Industrial - Machinery
• EPS (TTM): >-0.01
• Shares Outstanding: 1,596,134,000
• 10 Day Avg. Volume: 13,000
• 30 Day Avg. Volume: 241,533
• PEG Ratio: 0.08
• Price to Book (P/B): 0.97
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -2.76
• 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: Hold
• Number of Analyst Covering: 0

• Rating: 39 Underperform
• Price Target: HK$0.00 ▼(-100.00%Downside)

The overall stock score is significantly influenced by the company's weak financial performance, marked by consistent net losses and negative cash flows. Technical analysis offers mixed indications, with RSI suggesting oversold conditions but Stochastic indicating overbought levels, leading to uncertainty in price direction. The valuation is unfavorably impacted by a negative P/E ratio, making the stock less attractive. These factors highlight the need for considerable improvements in financial health and stability.

Huazhang Technology Holding Ltd. Business Overview & Revenue Model

Company Description

Huazhang Technology Holding Ltd. (1673) is a leading provider of industrial automation solutions primarily serving the paper-making industry. The company specializes in the design, manufacture, and sale of a wide range of equipment and systems that enhance the efficiency and productivity of paper production processes. Its core products include industrial automation systems, environmental protection equipment, and after-sales services, catering to the needs of paper manufacturers across various segments.

How the Company Makes Money

Huazhang Technology Holding Ltd. generates revenue through the sale of its industrial automation equipment and systems to paper manufacturing companies. The company offers a comprehensive portfolio that includes both standard and customized solutions, allowing it to meet diverse customer requirements and maintain a competitive edge. In addition to equipment sales, Huazhang Technology also earns income from providing after-sales services, which include maintenance and technical support, ensuring long-term customer relationships and recurring revenue streams. Partnerships with key players in the paper industry and continued investment in research and development further bolster the company's revenue by enhancing product offerings and expanding market reach.

Huazhang Technology Holding Ltd. Financial Statement Overview

Summary

Huazhang Technology Holding Ltd. is experiencing financial instability marked by consistent net losses and negative cash flows. While the balance sheet shows moderate leverage, the inability to generate positive cash flows and net income poses significant risks. The company's profitability and operational efficiency need improvement to achieve financial stability.

Income Statement

The company is facing negative profitability metrics with a net loss reported consistently over the periods. The Gross Profit Margin for the TTM stands at 19.4%, but the Net Profit Margin remains negative due to significant losses. Revenue has shown volatility, with the latest TTM revenue showing a decrease. The EBIT and EBITDA margins are also negative, indicating operating challenges.

Balance Sheet

The company's balance sheet shows a moderate financial structure with a Debt-to-Equity Ratio of 0.25 in the TTM, indicating manageable leverage. The Equity Ratio is 44.2%, reflecting reasonable stability. However, the negative net income impacts the Return on Equity, which is also negative, pointing to inefficiencies in generating returns for shareholders.

Cash Flow

The company faces cash flow challenges with negative Operating Cash Flow in the TTM. Free Cash Flow is also negative, reflecting difficulties in generating cash from core operations. The Operating Cash Flow to Net Income and Free Cash Flow to Net Income ratios are negative, underscoring the cash flow issues.

Breakdown	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	476.72M	448.04M	528.92M	323.87M	496.91M	368.16M
Gross Profit	92.49M	79.72M	83.16M	33.15M	105.63M	74.20M
EBITDA	727.72K	3.26M	-23.41M	-306.34M	60.42M	-53.96M
Net Income	-7.33M	-18.73M	-51.25M	-363.75M	17.98M	-77.50M
Balance Sheet
Total Assets	943.87M	982.95M	972.31M	1.04B	1.38B	1.37B
Cash, Cash Equivalents and Short-Term Investments	184.95M	208.82M	77.33M	184.14M	188.79M	90.44M
Total Debt	102.92M	89.68M	88.22M	56.06M	153.46M	221.74M
Total Liabilities	524.83M	558.07M	620.71M	645.74M	701.83M	801.65M
Stockholders Equity	417.04M	431.25M	358.11M	400.99M	684.75M	571.44M
Cash Flow
Free Cash Flow	-25.40M	15.66M	-126.08M	-57.13M	116.29M	-56.16M
Operating Cash Flow	-25.31M	16.52M	-124.95M	-52.00M	118.96M	-45.91M
Investing Cash Flow	3.64M	-57.71M	2.82M	-1.99M	-12.05M	-9.96M
Financing Cash Flow	13.79M	93.65M	24.68M	48.15M	-948.79K	71.83M

Huazhang Technology Holding Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.22
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1673, the sentiment is Negative. The current price of 0.22 is below the 20-day moving average (MA) of 0.23, below the 50-day MA of 0.23, and below the 200-day MA of 0.25, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 28.87 is Positive, neither overbought nor oversold. The STOCH value of 83.54 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1673.

Huazhang Technology Holding Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3348	69 Neutral	HK$510.00M	6.99	7.31%	4.29%	-28.58%	-53.71%
Sector *	58 Neutral	HK$14.11B	4.63	-3.01%	6.76%	3.67%	-54.16%
3302	57 Neutral	HK$115.97M	―	-6.89%	―	7.26%	-146.91%
0679	57 Neutral	€359.02M	1.58	-0.97%	4.25%	-4.42%	-104.79%
1645	40 Underperform	HK$563.98M	―	-13.40%	―	4.25%	-4.86%
0365	39 Underperform	HK$378.30M	―	-12.18%	―	16.64%	44.88%
1673	39 Underperform	HK$359.13M	―	-1.94%	―	-14.00%	87.71%

Huazhang Technology Holding Ltd. Corporate Events

Huazhang Technology Reports Improved Interim Financial Results

Huazhang Technology Holding Limited reported its interim results for the six months ending December 31, 2024, showing a significant improvement in financial performance. The company achieved a 17.2% increase in revenue to RMB 195.6 million and a 45.9% rise in gross profit to RMB 40.6 million, resulting in a gross profit margin of 20.8%. Despite a net loss of RMB 6.8 million, this marks a substantial reduction from the previous year’s loss of RMB 18.7 million, reflecting a 63.5% improvement. The board decided not to declare an interim dividend for this period.