Prosperous Industrial (Holdings) Ltd. (1731) AI Stock Analysis

• Market Cap: HK$873.60M
• Dividend Yield: 9.33%
• Average Volume (3M): 239.07K
• Price to Earnings (P/E): 4.5
• Beta (1Y): 0.47
• Revenue Growth: 6.92%
• EPS Growth: 4.74%
• Country: HK
• Employees: 8,429
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Apparel - Footwear & Accessories
• EPS (TTM): 0.10
• Shares Outstanding: 1,120,000,000
• 10 Day Avg. Volume: 180,000
• 30 Day Avg. Volume: 239,066
• PEG Ratio: 0.04
• Price to Book (P/B): 0.72
• Price to Sales (P/S): 0.50
• P/FCF Ratio: 4.88
• 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: Moderate Buy
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: HK$1.00 ▲(33.33% Upside)

Prosperous Industrial (Holdings) Ltd. is well-positioned with strong financial performance and attractive valuation metrics. The primary concern is the cash flow situation, which needs improvement to support continued growth. Technical indicators suggest stability but lack strong momentum.

Positive Factors

Revenue Growth

Consistent revenue growth indicates expanding market reach and product demand, supporting long-term business sustainability and competitive positioning.

Margin Improvement

Improved margins reflect enhanced operational efficiency and cost management, contributing to stronger profitability and financial health over the long term.

Balance Sheet Strength

A strong balance sheet with minimal leverage enhances financial stability and provides flexibility for strategic investments and growth opportunities.

Negative Factors

Cash Flow Concerns

Lack of cash flow despite profitability raises concerns about liquidity and the ability to fund operations and growth without external financing.

Cash Generation Issues

Inadequate cash generation could limit the company's ability to invest in growth initiatives and manage financial obligations, impacting long-term viability.

Liquidity Risk

Ongoing liquidity issues may constrain operational flexibility and necessitate reliance on external funding, posing a risk to financial stability.

Prosperous Industrial (Holdings) Ltd. Business Overview & Revenue Model

Company Description

Prosperous Industrial (Holdings) Ltd. (1731) is a diversified investment holding company based in Hong Kong, primarily engaged in the manufacturing and trading of various industrial products. The company operates in multiple sectors, including textiles, plastics, and electronic components, focusing on providing high-quality products to both local and international markets. With a commitment to innovation and sustainability, Prosperous Industrial aims to enhance its portfolio by exploring new opportunities and expanding its operational capabilities.

How the Company Makes Money

The company generates revenue through several key streams, including the manufacturing and sale of industrial products, which are distributed to wholesalers and retailers globally. By maintaining a diverse product range, Prosperous Industrial mitigates risks associated with market fluctuations in specific sectors. Additionally, the company engages in strategic partnerships with suppliers and distributors, allowing it to optimize its supply chain and reduce costs. These partnerships also facilitate access to new markets, further driving sales growth. Furthermore, Prosperous Industrial invests in research and development to innovate its product offerings, ensuring they meet evolving customer demands and industry standards, ultimately contributing to its revenue growth.

Prosperous Industrial (Holdings) Ltd. Financial Statement Overview

Summary

The company shows strong revenue and profit growth with improved margins and a robust balance sheet. However, the cash flow situation is concerning, with zero operating and free cash flow in 2024, which needs to be addressed to ensure liquidity.

Income Statement

The company exhibits strong revenue growth with a 17% increase from 2023 to 2024. Gross profit margin improved to 25%, and net profit margin increased to 12%, indicating enhanced efficiency and profitability. EBIT and EBITDA margins also showed positive trends, reflecting effective cost management and operational strength.

Balance Sheet

The balance sheet is robust with a low debt-to-equity ratio of 0.01, suggesting minimal leverage and financial stability. Equity ratio is high at 77%, indicating strong shareholder equity backing. Return on equity improved to 17%, highlighting effective utilization of equity to generate profits.

Cash Flow

Cash flow analysis shows a concerning trend with zero operating and free cash flow in 2024. This raises questions about cash generation capabilities despite strong profitability. Previous years showed positive free cash flow, indicating potential for recovery if cash management is addressed.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	239.88M	243.61M	208.14M	218.19M	146.67M	156.02M
Gross Profit	59.47M	61.01M	43.75M	40.59M	31.27M	31.02M
EBITDA	29.70M	31.41M	21.16M	14.16M	6.00M	7.41M
Net Income	25.09M	29.84M	14.88M	10.35M	3.90M	2.99M
Balance Sheet
Total Assets	219.95M	220.56M	195.69M	189.83M	190.78M	192.61M
Cash, Cash Equivalents and Short-Term Investments	87.73M	77.12M	58.51M	48.63M	53.69M	82.52M
Total Debt	1.70M	2.50M	3.22M	5.13M	7.54M	7.90M
Total Liabilities	44.14M	49.65M	46.74M	48.21M	51.24M	47.80M
Stockholders Equity	175.81M	170.91M	148.95M	141.62M	139.54M	144.81M
Cash Flow
Free Cash Flow	23.85M	25.13M	16.56M	3.87M	-10.01M	32.04M
Operating Cash Flow	25.85M	27.04M	18.55M	6.39M	-9.13M	32.64M
Investing Cash Flow	-7.92M	11.05M	-4.72M	-1.37M	22.02M	-29.48M
Financing Cash Flow	-9.14M	-9.06M	-7.73M	-7.43M	-12.79M	-2.46M

Prosperous Industrial (Holdings) Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.75
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1731, the sentiment is Negative. The current price of 0.75 is below the 20-day moving average (MA) of 0.76, below the 50-day MA of 0.77, and below the 200-day MA of 0.77, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 38.40 is Neutral, neither overbought nor oversold. The STOCH value of 22.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1731.

Prosperous Industrial (Holdings) Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2683	73 Outperform	HK$355.50M	5.53	28.87%	5.23%	31.25%	147.52%
1731	73 Outperform	HK$873.60M	4.47	14.86%	9.33%	6.92%	4.74%
0210	70 Outperform	$890.37M	7.17	15.44%	4.55%	―	―
1023	62 Neutral	HK$500.61M	-2.81	-10.55%	11.76%	-1.38%	-275.02%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
0676	47 Neutral	HK$723.34M	-64.71	-1.85%	1.01%	-33.72%	-550.00%
8285	44 Neutral	HK$23.52M	-5.83	―	―	-48.40%	66.36%

Prosperous Industrial (Holdings) Ltd. Corporate Events

Prosperous Industrial Faces Compliance Challenge Following Director Resignation

Prosperous Industrial (Holdings) Limited announced the resignation of Mr. Wong Kwun Ho, an independent non-executive director, who stepped down to focus on family commitments. His resignation follows an investigation by the Independent Commission Against Corruption of Hong Kong, although the company states this does not impact its operations. The resignation has led to non-compliance with certain Hong Kong Stock Exchange listing rules, prompting the company to seek a replacement to restore compliance.

Prosperous Industrial Announces Board Composition and Committee Roles

Prosperous Industrial (Holdings) Limited has announced the composition of its board of directors and the roles within its committees. The board includes executive, non-executive, and independent non-executive directors, with specific members assigned to the audit, nomination, and remuneration committees. This announcement highlights the company’s commitment to structured governance and strategic oversight, which is crucial for its operational efficiency and stakeholder confidence.

Prosperous Industrial Announces Major Construction Contract for Panyu City Industrial Park

Prosperous Industrial (Holdings) Ltd. has announced a significant construction contract for the development of the Glorieux Intelligent Manufacturing Industrial Park in Panyu City. The project, which will be executed in phases, has its first phase covering a site area of 21,128 square meters and includes three main buildings. The contract, valued at RMB152.36 million, was signed with China Railway Beijing Engineering Group Co., Ltd. This development is expected to enhance the company’s industrial capabilities and strengthen its market position.