Lap Kei Engineering (Holdings) Limited (1690) AI Stock Analysis

• Market Cap: HK$115.62M
• Dividend Yield: 13.51%
• Average Volume (3M): 2.76M
• Price to Earnings (P/E): 100.0
• Beta (1Y): 0.16
• Revenue Growth: 57.78%
• EPS Growth: -78.95%
• Country: HK
• Employees: 113
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 0.00
• Shares Outstanding: 1,445,230,000
• 10 Day Avg. Volume: 533,000
• 30 Day Avg. Volume: 2,760,666
• PEG Ratio: -0.72
• Price to Book (P/B): 0.71
• Price to Sales (P/S): 0.26
• P/FCF Ratio: 8.23
• 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: 56 Neutral
• Price Target: HK$0.08 ▲(8.57% Upside)

The score is mainly driven by solid solvency and better recent cash flow, offset by sharply weaker profitability (very thin margins and lower ROE). Technical indicators add downside pressure due to negative momentum, while valuation is constrained by a very high P/E despite an attractive dividend yield.

Positive Factors

Balance Sheet Strength

A strong balance sheet with low leverage provides financial flexibility, enabling the company to withstand cyclical downturns in the construction industry.

Cash Flow Improvement

Improved cash flow generation enhances the company's ability to fund operations and investments without relying heavily on external financing.

Revenue Growth

The rebound in revenue indicates a recovery in demand, which could support future growth and market position in the engineering and construction sector.

Negative Factors

Profitability Deterioration

Deteriorating profitability with thin margins increases vulnerability to cost overruns and competitive pressures, impacting long-term earnings stability.

Weak ROE

A declining ROE suggests reduced capital efficiency, which may hinder the company's ability to generate shareholder value over time.

Execution Risk

High execution risk due to thin margins can lead to volatile earnings and project outcomes, challenging long-term financial performance.

Lap Kei Engineering (Holdings) Limited Business Overview & Revenue Model

Company Description

Lap Kei Engineering (Holdings) Limited is a Hong Kong-based investment holding company principally engaged in the engineering of building services systems and related businesses. The Company operates through two segments. Building Services Engineering Work segment is engaged in the provision of engineering works of building services systems, including engineering works related to ventilation and air-conditioning systems, electrical systems, plumbing and drainage systems, fire systems and others. Maintenance, Repair and Other Services segment is engaged in the provision of maintenance and repair services for building services systems and the replacement of parts. The Company mainly operates businesses in Hong Kong.

How the Company Makes Money

Lap Kei Engineering (Holdings) Limited generates revenue through its extensive portfolio of engineering services. The company primarily makes money by undertaking contracts for building services projects, which include designing, installing, and maintaining electrical and mechanical systems in various types of buildings. Key revenue streams come from projects in commercial, residential, and institutional buildings, where the company applies its expertise in electrical and mechanical engineering. Additionally, Lap Kei Engineering might engage in partnerships or collaborations with developers and contractors to enhance project delivery and expand its market reach. The company's earnings are significantly influenced by its ability to secure contracts and maintain long-term relationships with clients in the competitive construction industry.

Lap Kei Engineering (Holdings) Limited Financial Statement Overview

Summary

Lap Kei Engineering demonstrates a mixed financial performance. The company has achieved notable revenue growth but faces challenges in maintaining consistent profitability and cash flow generation. Its debt-free status and strong equity ratio provide financial stability, yet the variability in margins and cash flows indicates areas for improvement in operational efficiency and cash management. The company should focus on enhancing profit margins and optimizing cash flows to ensure sustainable growth.

Income Statement

Lap Kei Engineering shows a mixed performance in its income statement. The company has experienced significant revenue growth over the years, particularly from 2020 to 2021 and from 2023 to 2024. However, the gross profit margin and net profit margin have been inconsistent, indicating some instability in cost management. The EBIT and EBITDA margins have also shown volatility, highlighting potential challenges in operational efficiency.

Balance Sheet

The balance sheet of Lap Kei Engineering is relatively strong with no debt, resulting in a debt-to-equity ratio of zero. The company's equity ratio is healthy, suggesting a solid financial foundation. However, the return on equity (ROE) has shown fluctuations, reflecting varying levels of profitability. The high equity ratio enhances financial stability, but the company needs to improve its consistency in generating returns for shareholders.

Cash Flow

Cash flow analysis reveals some challenges for Lap Kei Engineering. The company has shown volatility in operating cash flow, with negative values in some years, indicating potential issues in cash generation from core operations. Free cash flow has also been inconsistent, affecting the company's ability to fund growth initiatives independently. The operating cash flow to net income ratio suggests a need for improvement in converting profits into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	434.88M	415.33M	323.31M	401.92M	261.38M	132.27M
Gross Profit	23.53M	23.06M	26.59M	25.72M	27.21M	8.16M
EBITDA	3.29M	5.28M	11.61M	10.83M	9.69M	-1.21M
Net Income	1.18M	2.07M	7.42M	10.91M	10.71M	-1.76M
Balance Sheet
Total Assets	290.37M	359.08M	296.94M	294.84M	218.17M	157.26M
Cash, Cash Equivalents and Short-Term Investments	62.33M	58.72M	45.76M	17.47M	46.88M	58.29M
Total Debt	0.00	624.00K	0.00	10.00M	0.00	0.00
Total Liabilities	155.37M	208.91M	144.48M	148.69M	83.51M	45.20M
Stockholders Equity	135.01M	150.17M	152.46M	146.16M	134.66M	112.06M
Cash Flow
Free Cash Flow	17.02M	13.02M	36.43M	-39.04M	-26.48M	-6.79M
Operating Cash Flow	22.73M	18.73M	39.21M	-36.47M	-22.08M	-6.79M
Investing Cash Flow	-1.51M	-1.32M	-388.00K	-2.57M	-1.21M	695.00K
Financing Cash Flow	-39.18M	-4.44M	-10.54M	9.63M	11.89M	-2.00K

Lap Kei Engineering (Holdings) Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.07
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1690, the sentiment is Positive. The current price of 0.07 is below the 20-day moving average (MA) of 0.08, below the 50-day MA of 0.08, and above the 200-day MA of 0.07, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 59.42 is Neutral, neither overbought nor oversold. The STOCH value of 66.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:1690.

Lap Kei Engineering (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%
3878	63 Neutral	HK$115.10M	28.92	1.45%	―	-19.27%	-47.47%
1690	56 Neutral	HK$115.62M	100.00	0.82%	13.51%	57.78%	-78.95%
1741	48 Neutral	HK$120.00M	-10.00	-47.66%	―	-34.70%	-388.24%
1413	47 Neutral	HK$126.28M	-0.91	-40.10%	―	-70.99%	-2956.76%
6080	44 Neutral	HK$115.40M	-7.46	-9.58%	―	-9.82%	-309.09%