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Sterling Group Holdings Limited (HK:1825)
:1825
Hong Kong Market

Sterling Group Holdings Limited (1825) AI Stock Analysis

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HK

Sterling Group Holdings Limited

(1825)

Rating:47Neutral
Price Target:
Sterling Group Holdings Limited's overall score reflects significant financial challenges, including declining revenue and profitability, high debt, and poor cash flow metrics. Despite some technical strength, valuation metrics are weak due to unprofitability and lack of dividends. The stock requires strategic improvements to enhance its financial health and investor appeal.

Sterling Group Holdings Limited (1825) vs. iShares MSCI Hong Kong ETF (EWH)

Sterling Group Holdings Limited Business Overview & Revenue Model

Company DescriptionSterling Group Holdings Limited, an investment holding company, manufactures and trades in apparel products in Hong Kong, the United States, the United Kingdom, Italy, and internationally. The company offers outerwear, including jackets, coats, and blazers; bottoms, such as pants, shorts, and skirts; tops comprising shirts, blouses, and tank tops; and other products that include dresses, suits, gowns, scarfs, jumpsuits, sleepwear, masks, and vests. It also manages and licenses trademarks. The company serves international apparel brand customers. Sterling Group Holdings Limited was founded in 1993 and is headquartered in San Po Kong, Hong Kong.
How the Company Makes MoneySterling Group Holdings Limited generates revenue primarily through the manufacturing and sale of its apparel products. The company sources raw materials, designs clothing items, and manages the production process to deliver finished garments to retailers and distributors. The key revenue streams for Sterling Group Holdings are wholesale sales to large retail chains, direct sales to smaller boutiques, and strategic partnerships with fashion brands that require manufacturing expertise. Additionally, the company may engage in licensing agreements, allowing other brands to use its designs or manufacturing capabilities. Significant factors contributing to its earnings include maintaining competitive pricing, ensuring high-quality production standards, and expanding its client base in international markets.

Sterling Group Holdings Limited Financial Statement Overview

Summary
Sterling Group Holdings Limited is facing significant financial difficulties, with declining revenues and negative profitability margins. High debt levels and negative return on equity indicate financial instability, while poor cash flow metrics exacerbate concerns. Strategic adjustments are necessary to improve financial health.
Income Statement
50
Neutral
The company has experienced a significant decline in revenue from the previous year, with a revenue growth rate of -8.34%. Gross profit margin stands at 15.29%, which is relatively low for the industry. The net profit margin is negative at -3.21%, indicating financial challenges. EBIT and EBITDA margins are also negative, reflecting operational inefficiencies.
Balance Sheet
45
Neutral
The debt-to-equity ratio is high at 7.11, suggesting heavy reliance on debt financing. The equity ratio is low at 8.50%, hinting at potential financial instability. Return on equity is negative at -67.18%, highlighting difficulties in generating shareholder value.
Cash Flow
30
Negative
The company has a negative free cash flow growth rate of -151.17%, indicating a significant deterioration in cash-generating ability. The operating cash flow to net income ratio is -0.91, and the free cash flow to net income ratio is -1.02, both indicating poor cash flow management relative to net income.
Breakdown
TTMMar 2024Mar 2023Mar 2022Mar 2021Mar 2020
Income StatementTotal Revenue
522.80M571.39M623.43M455.97M371.28M590.87M
Gross Profit
92.49M87.40M107.18M61.07M43.85M111.37M
EBIT
3.73M-10.79M24.08M-52.28M-34.87M-46.53M
EBITDA
16.31M495.00K45.00M-28.02M-14.58M-30.45M
Net Income Common Stockholders
-7.19M-18.36M19.93M-38.85M-33.25M-58.64M
Balance SheetCash, Cash Equivalents and Short-Term Investments
22.61M26.96M20.85M33.39M63.85M47.84M
Total Assets
304.03M321.48M301.57M324.24M384.58M372.73M
Total Debt
121.61M194.10M151.02M189.93M246.62M246.96M
Net Debt
99.00M167.13M130.17M156.53M182.77M199.13M
Total Liabilities
268.26M294.15M254.57M297.39M327.57M316.04M
Stockholders Equity
35.77M27.33M47.00M26.84M57.00M56.69M
Cash FlowFree Cash Flow
25.62M-18.66M36.47M17.02M-15.02M-47.56M
Operating Cash Flow
26.06M-16.79M37.91M19.49M-13.41M-22.55M
Investing Cash Flow
1.21M-8.41M-3.71M4.10M-1.71M-28.07M
Financing Cash Flow
-16.18M31.38M-45.96M-51.81M30.97M22.41M

Sterling Group Holdings Limited Technical Analysis

Technical Analysis Sentiment
Negative
Last Price0.08
Price Trends
50DMA
0.08
Negative
100DMA
0.08
Negative
200DMA
0.09
Negative
Market Momentum
MACD
<0.01
Positive
RSI
46.50
Neutral
STOCH
20.10
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1825, the sentiment is Negative. The current price of 0.08 is below the 20-day moving average (MA) of 0.08, below the 50-day MA of 0.08, and below the 200-day MA of 0.09, indicating a bearish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 46.50 is Neutral, neither overbought nor oversold. The STOCH value of 20.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1825.

Sterling Group Holdings Limited Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
62
Neutral
$6.82B11.052.80%4.32%2.67%-24.92%
47
Neutral
HK$29.38M-18.90%-14.00%-1233.33%
$33.10B15.0128.11%2.61%
$3.23B8.4611.12%8.17%
$15.29B17.4320.60%2.98%
$10.28B11.8018.17%4.84%
65
Neutral
HK$161.28M23.184.61%4.77%-53.19%
* Consumer Cyclical Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
HK:1825
Sterling Group Holdings Limited
0.08
-0.04
-33.33%
ANPDF
ANTA Sports Products
11.58
1.49
14.77%
HEGIF
Hengan International Group Co
2.37
-0.61
-20.47%
PRDSF
Prada SpA
6.18
-1.37
-18.15%
SZHIF
Shenzhou International Group Holdings
6.80
-3.54
-34.24%
HK:1338
BaWang International (Group) Holding Limited
0.05
0.00
0.00%

Sterling Group Holdings Limited Corporate Events

Sterling Group Holdings Benefits from Early Loan Repayment
Apr 30, 2025

Sterling Group Holdings Limited announced the receipt of an early loan repayment from Santai, amounting to HK$3.3 million. This early repayment is considered beneficial to the company’s financial condition and cash flow, as it improves the overall business stability and reduces outstanding liabilities.

Sterling Group Holdings Benefits from Early Loan Repayment
Apr 24, 2025

Sterling Group Holdings Limited announced the early repayment of a loan by Santai, amounting to HK$10 million, which is part of a larger principal amount of US$4,212,811. This early repayment is seen as beneficial to the company’s financial health and cash flow, indicating positive implications for its overall business operations.

Sterling Group Announces Key Executive Resignation and Leadership Changes
Apr 16, 2025

Sterling Group Holdings Limited announced the resignation of Mr. Chung Sam Kwok Wai from multiple key positions within the company, including executive director, chief financial officer, and chief operating officer, due to personal health reasons. The company has appointed Mr. Wong Sai Hung as the new authorised representative and process agent, ensuring a smooth transition in leadership roles.

Sterling Group Holdings Limited Announces Board Composition
Apr 16, 2025

Sterling Group Holdings Limited has announced the current composition of its board of directors and their roles within the company. The board includes both executive and independent non-executive directors, with specific members serving on the audit, remuneration, and nomination committees. This announcement provides clarity on the governance structure of the company, which is crucial for stakeholders to understand the leadership dynamics and decision-making processes within the organization.

Sterling Group Holdings Ratifies Key Loan Agreement at EGM
Mar 14, 2025

Sterling Group Holdings Limited announced that all proposed ordinary resolutions were approved by shareholders at the extraordinary general meeting held on March 14, 2025. This includes the ratification of a loan agreement between its subsidiary, Sterling Apparel Limited, and Santai Global Asset Management Ltd, involving a principal sum of approximately US$4.2 million. The approval of this agreement is expected to impact the company’s financial operations positively, reinforcing its strategic financial engagements.

Sterling Group Holdings Announces Strategic Financial Agreements
Feb 26, 2025

Sterling Group Holdings Limited has announced an extraordinary general meeting to approve several agreements involving its subsidiary, Sterling Apparel Limited. These agreements include a loan agreement with Santai Global Asset Management Ltd and two agreements with Santai and JP Outfitters Inc. The agreements involve financial transactions, termination of previous support letters, and the provision of financial assistance, reflecting strategic financial restructuring and operational adjustments that may impact the company’s market positioning and stakeholder interests.

Sterling Group Announces Key Agreement Extensions and Amendments
Feb 20, 2025

Sterling Group Holdings Limited has announced a supplemental agreement involving its subsidiary, Asiamax Holdings Limited, and JP Outfitters, LLC, which appoints Asiamax as the exclusive manufacturer for apparel products for 20 years. The agreement also amends previous loan terms, extending the long stop date for satisfaction of conditions to 30 April 2025 due to additional time needed for various preparations. This extension is crucial for the company’s operational timelines and stakeholder planning, ensuring all conditions are met for the agreements to proceed as intended.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.