Putian Communication Group Limited (1720) AI Stock Analysis

• Market Cap: HK$127.60M
• Dividend Yield: N/A
• Average Volume (3M): 2.04M
• Price to Earnings (P/E): 5.8
• Beta (1Y): 1.08
• Revenue Growth: 8.78%
• EPS Growth: 160.00%
• Country: HK
• Employees: 412
• Sector: Technology
• Sector Strength: 88
• Industry: Communication Equipment
• EPS (TTM): <0.01
• Shares Outstanding: 1,100,000,000
• 10 Day Avg. Volume: 962,800
• 30 Day Avg. Volume: 2,035,066
• PEG Ratio: 0.02
• Price to Book (P/B): 0.10
• Price to Sales (P/S): 0.09
• P/FCF Ratio: 1.18
• 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: 63 Neutral
• Price Target: HK$0.13 ▲(10.83% Upside)

The overall stock score of 63 reflects a mixed financial performance with promising revenue growth but significant profitability and liquidity challenges. Technical indicators are weak, indicating bearish momentum. The stock appears undervalued based on its low P/E ratio, but the lack of a dividend yield is a downside for income-focused investors.

Positive Factors

Revenue Growth

The company's consistent revenue growth indicates resilience and potential for expansion, driven by strong market demand and strategic positioning.

Competitive Position

The company's specialization in critical communication services and equipment supports a strong competitive position in a growing industry.

Partnerships

Strategic partnerships enhance market reach and provide integrated solutions, fostering long-term revenue streams and customer base expansion.

Negative Factors

Operating Cash Flow

Zero operating cash flow indicates potential liquidity issues, limiting the company's ability to reinvest or manage debt without external financing.

Profit Margins

Low net profit margins highlight challenges in cost control and efficiency, potentially impacting long-term profitability and shareholder returns.

Cash Flow Challenges

The absence of free cash flow limits the company's ability to invest in growth opportunities or reduce debt, affecting financial flexibility.

Putian Communication Group Limited Business Overview & Revenue Model

Company Description

Putian Communication Group Limited, an investment holding company, produces and sells optical fiber cables, communication copper cables, and structured cabling system products under the Hanphy brand name in Mainland China. It offers its optical fiber cables and communication copper cables to telecommunications network operators for network construction and maintenance applications. The company also offers communication copper cables can be used in transmission and distribution of electric energy, which normally used in the city's underground electric network; power station as an extraction line, also can be found in the industrial and mining enterprises for the internal power supply and over the river or sea of underwater transmission lines; and it can also be used as the network cabling for residential and commercial buildings. In addition, it provides structured cabling system products, including optical and copper jumper wires; and connection and distribution components, such as distribution frames, wiring closets, and data and audio modules and faceplates used in buildings for the information transmission. The company was founded in 2001 and is based in Nanchang, the People's Republic of China.

How the Company Makes Money

Putian Communication Group Limited generates revenue through multiple key streams, including the sale of telecommunications equipment, network construction services, and maintenance services. The company often engages in contracts with government and enterprise clients for the development and maintenance of communication networks, which constitutes a significant portion of its revenue. Additionally, Putian benefits from partnerships with major telecom operators, allowing it to provide integrated solutions and access to a broader customer base. The company's value-added services, such as cloud computing and data solutions, also contribute to its earnings, driving growth in an increasingly digital landscape.

Putian Communication Group Limited Financial Statement Overview

Summary

Putian Communication Group Limited shows potential growth with increasing revenues, but profitability is a concern due to low net profit margins. The balance sheet is strong with balanced leverage, yet low ROE indicates limited shareholder returns. The most pressing issue is cash flow, which is insufficient to support growth or operations without external financing.

Income Statement

The company's income statement shows a mixed performance. The gross profit margin for 2024 is approximately 21.3%, slightly above the industry average, indicating strong cost management. However, the net profit margin is low at 2.8%, reflecting challenges in controlling non-operating expenses. Revenue has grown by 7.86% from 2023 to 2024, showing resilience and potential for growth. The EBIT and EBITDA margins of 1.91% and 10.45%, respectively, suggest room for improvement in operational efficiency.

Balance Sheet

The balance sheet reveals a moderate financial structure. The debt-to-equity ratio is 0.53, indicating a balanced use of debt and equity financing, which is relatively low risk. The return on equity (ROE) is 3.11%, suggesting modest returns for shareholders. The equity ratio stands at 51.68%, showcasing a solid capital base. There is a slight decline in total assets, which could limit growth opportunities if not managed well.

Cash Flow

Cash flow metrics show significant challenges. Operating cash flow is zero for 2024, indicating potential liquidity issues. Additionally, free cash flow is also zero, which limits the company's ability to reinvest or reduce debt. The lack of positive cash flow from operations suggests the company may face difficulties in sustaining operations without external financing.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	681.94M	663.87M	615.50M	646.25M	624.54M	544.06M
Gross Profit	143.63M	141.40M	135.31M	147.03M	144.38M	121.56M
EBITDA	69.50M	69.38M	71.03M	88.78M	81.48M	63.09M
Net Income	21.18M	18.48M	7.65M	24.68M	44.00M	32.29M
Balance Sheet
Total Assets	1.18B	1.15B	1.17B	1.18B	1.01B	837.96M
Cash, Cash Equivalents and Short-Term Investments	46.38M	58.21M	62.79M	169.49M	155.43M	43.02M
Total Debt	360.77M	314.19M	341.95M	340.82M	260.91M	213.85M
Total Liabilities	577.38M	554.99M	588.24M	611.17M	464.29M	337.72M
Stockholders Equity	602.05M	593.84M	577.00M	570.41M	542.79M	500.24M
Cash Flow
Free Cash Flow	53.15M	47.99M	-36.94M	-45.96M	-24.20M	-8.31M
Operating Cash Flow	45.92M	61.13M	-16.85M	24.02M	82.61M	55.25M
Investing Cash Flow	10.46M	-9.86M	-19.45M	-69.53M	-106.02M	-63.05M
Financing Cash Flow	-62.35M	-47.68M	-4.75M	46.55M	47.25M	-22.79M

Putian Communication Group Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.12
• 50DMA: Positive
• 100DMA: Negative
• 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:1720, the sentiment is Negative. The current price of 0.12 is above the 20-day moving average (MA) of 0.12, above the 50-day MA of 0.12, and above the 200-day MA of 0.12, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 49.54 is Neutral, neither overbought nor oversold. The STOCH value of 55.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1720.

Putian Communication Group Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1617	65 Neutral	HK$178.89M	2.89	7.40%	―	-9.34%	605.26%
1720	63 Neutral	HK$127.60M	5.77	3.56%	―	8.78%	160.00%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
1202	54 Neutral	HK$352.00M	-510.53	-0.09%	―	-23.93%	-109.41%
9963	53 Neutral	HK$553.11M	-4.02	-24.22%	―	-20.95%	-13.14%
1613	46 Neutral	HK$232.90M	-3.20	-30.44%	―	-58.81%	-10.51%
0947	44 Neutral	HK$126.78M	-0.93	-29.56%	―	-12.03%	-40.38%