Guotai Junan International Holdings Limited (1788) AI Stock Analysis

• Market Cap: €25.68B
• Dividend Yield: 2.78%
• Average Volume (3M): 81.45M
• Price to Earnings (P/E): 36.6
• Beta (1Y): 2.58
• Revenue Growth: 32.03%
• EPS Growth: 154.14%
• Country: HK
• Employees: 623
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Capital Markets
• EPS (TTM): 0.06
• Shares Outstanding: 9,529,944,000
• 10 Day Avg. Volume: 52,053,114
• 30 Day Avg. Volume: 81,447,206
• PEG Ratio: 0.42
• Price to Book (P/B): 0.72
• Price to Sales (P/S): 4.94
• P/FCF Ratio: 6.16
• 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): 0.23
• Revenue Forecast (FY): €29.88B

• Rating: 49 Neutral
• Price Target: HK$2.50 ▼(-0.79% Downside)

The overall stock score is primarily influenced by financial performance and technical analysis. The company shows operational efficiency improvements but struggles with profitability and cash flow management. Technical indicators suggest bearish momentum, and the stock appears overvalued with a high P/E ratio. These factors contribute to a cautious outlook.

Positive Factors

Revenue Growth

The company has demonstrated strong revenue growth, indicating successful market penetration and the effectiveness of its diversified financial services.

Operational Efficiency

Enhanced operational efficiency, as seen in the improved EBIT margin, suggests better cost management and operational execution, supporting long-term profitability.

Stable Balance Sheet

A stable balance sheet with a reasonable debt-to-equity ratio indicates financial stability and prudent asset management, supporting sustainable growth.

Negative Factors

Profitability Challenges

The low net profit margin highlights ongoing challenges in converting revenue into profit, which could impact long-term financial health if not addressed.

Cash Flow Management

Negative free cash flow indicates cash management issues, potentially limiting the company's ability to invest in growth opportunities and manage debt.

High Liabilities

High liabilities can strain the company's financial resources, increasing risk and potentially affecting its ability to finance future operations.

Guotai Junan International Holdings Limited Business Overview & Revenue Model

Company Description

Guotai Junan International Holdings Limited, an investment holding company, provides brokerage, corporate finance, asset management, loans and financing, financial products, and market making and investment services in Hong Kong and internationally. The company's Wealth Management segment provides a range financial services and solutions to individual investors and small to medium-sized businesses and family office, including brokerage, loans and financing, and other wealth management services. Its Institutional Investor Services segment offers market making, investments, structured product solutions, lending, and other services to corporations, governments, and financial institutions. The company's Corporate Finance segment provides advisory services; and placing and underwriting services of debt and equity securities. Its Investment Management segment offers asset management and fund management services to institutions and individuals; and invests in funds, debts, and equity securities. The company's Other segment provides information channel services. It also provides securities, futures, and leveraged foreign exchange dealing and broking services; money lending and trading services; and consultancy and financial services. The company was founded in 1995 and is based in Central, Hong Kong. Guotai Junan International Holdings Limited is a subsidiary of Guotai Junan Financial Holdings Limited.

How the Company Makes Money

Guotai Junan International generates revenue through multiple channels. The primary revenue streams include commissions and fees earned from brokerage services, which involve facilitating the buying and selling of securities for clients. Additionally, the company earns income from wealth management services, where it charges fees for managing client assets and providing financial advisory services. Investment banking activities, including underwriting and advisory services for mergers and acquisitions, also contribute significantly to its revenue. Furthermore, the company engages in proprietary trading, generating profits from trading its own capital in financial markets. Strategic partnerships with other financial institutions and access to extensive networks enhance its offerings and client base, thereby contributing to its earnings potential.

Guotai Junan International Holdings Limited Financial Statement Overview

Summary

Guotai Junan International Holdings Limited shows strong operational efficiency gains but struggles with profitability and cash flow management. The balance sheet indicates stability, but high liabilities and negative cash flow trends pose risks to future financial flexibility.

Income Statement

The company has shown a mixed performance with declining revenue over the years, but an improvement in EBIT margin from 5.2% in 2023 to 12.9% in 2024 indicates better operational efficiency. However, the net profit margin remains low at 1.6% in 2024, reflecting challenges in achieving profitability.

Balance Sheet

The company maintains a stable equity position and a reasonable debt-to-equity ratio of 0.50 in 2024. However, the high total liabilities pose a potential risk. The equity ratio improved slightly over the year, indicating a stable asset financing structure.

Cash Flow

The cash flow performance is concerning with consistent negative free cash flow, indicating cash management challenges. The lack of operating cash flow and capital expenditure data in 2024 makes it difficult to assess the company's cash utilization effectively.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.71B	2.17B	3.22B	2.32B	3.97B	4.88B
Gross Profit	2.71B	3.47B	2.33B	2.11B	3.21B	3.76B
EBITDA	3.39B	2.89B	1.77B	615.02M	2.14B	2.71B
Net Income	702.93M	347.78M	201.26M	80.38M	1.09B	1.56B
Balance Sheet
Total Assets	121.79B	130.17B	107.54B	94.46B	106.29B	121.72B
Cash, Cash Equivalents and Short-Term Investments	39.80B	80.91B	59.27B	40.02B	28.13B	59.55B
Total Debt	7.63B	89.43B	69.73B	58.53B	60.12B	75.06B
Total Liabilities	106.24B	115.15B	92.57B	79.52B	90.85B	106.48B
Stockholders Equity	15.43B	14.91B	14.84B	14.81B	15.31B	15.12B
Cash Flow
Free Cash Flow	-346.70M	1.74B	-4.94B	-1.92B	38.97M	23.06M
Operating Cash Flow	-315.90M	1.78B	-4.91B	1.66B	5.88B	59.20M
Investing Cash Flow	19.03B	-50.75M	-32.67M	-39.30M	-43.06M	-36.15M
Financing Cash Flow	-14.76B	-2.23B	4.58B	801.87M	-5.98B	13.41B

Guotai Junan International Holdings Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.52
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1788, the sentiment is Negative. The current price of 2.52 is below the 20-day moving average (MA) of 2.75, below the 50-day MA of 3.38, and below the 200-day MA of 3.10, indicating a bearish trend. The MACD of -0.23 indicates Negative momentum. The RSI at 26.76 is Positive, neither overbought nor oversold. The STOCH value of 13.90 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1788.

Guotai Junan International Holdings Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
1476	64 Neutral	HK$4.97B	12.71	4.33%	―	58.09%	―
1375	60 Neutral	HK$20.11B	22.75	3.28%	1.24%	-36.99%	181.79%
1428	54 Neutral	€14.87B	24.07	43.44%	4.46%	11.40%	11.52%
1788	49 Neutral	€25.68B	36.64	4.78%	2.78%	32.03%	154.14%
0218	46 Neutral	€2.23B	-35.31	-2.44%	―	-45.13%	60.10%
0993	39 Underperform	€1.43B	―	―	―	-78.40%	-196.19%

Guotai Junan International Holdings Limited Corporate Events

Guotai Junan Secures HK$1.95 Billion Credit Facility with Contingency Clauses

Guotai Junan International Holdings Limited has entered into committed facility agreements with several banks in Hong Kong, securing revolving credit facilities totaling up to HK$1.95 billion. These agreements stipulate that a change in the controlling shareholder, Guotai Haitong Securities Co., Ltd., could trigger an event of default, allowing lenders to demand immediate repayment. This financial arrangement underscores the company’s reliance on its controlling shareholder’s stability and highlights potential risks for stakeholders should any changes occur in the ownership structure.