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Stella International Holdings Limited (HK:1836)
:1836
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Stella International Holdings Limited
(1836)
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Rating:82Outperform
Price Target:
HK$18.00
â–²(14.29% Upside)
Stella International Holdings Limited scores highly due to its strong financial performance, characterized by robust profitability, low leverage, and excellent cash flow generation. The valuation is attractive with a high dividend yield, appealing to income investors. Technical analysis indicates stability with no significant bullish or bearish trends. The absence of earnings call and corporate events data did not impact the overall score.
Positive Factors
Cash Generation
Strong cash generation supports operational and financial activities, ensuring the company can invest in growth and manage obligations efficiently.
Balance Sheet Health
A strong balance sheet with low leverage enhances financial stability and flexibility, positioning the company well for future growth opportunities.
Profitability
High profitability margins indicate efficient operations and the ability to generate significant earnings, supporting long-term business sustainability.
Negative Factors
Revenue Growth
While there is positive growth, revenue levels remain below the 2019 peak, suggesting challenges in fully recovering market position.
Revenue Growth Decline
The decline in revenue growth rate indicates potential market or operational challenges that could impact long-term growth prospects.
EPS Growth
A significant drop in EPS growth suggests pressure on earnings, which could affect investor confidence and the company's ability to reinvest in growth.
Stella International Holdings Limited (1836) vs. iShares MSCI Hong Kong ETF (EWH)
Market Cap
$13.83B
Dividend Yield10.03%
Average Volume (3M)1.48M
Price to Earnings (P/E)11.1
Beta (1Y)0.15
Revenue Growth-0.14%
EPS Growth-14.24%
CountryHK
Employees42,600
SectorConsumer Cyclical
Sector Strength84
IndustryApparel - Footwear & Accessories
Share Statistics
EPS (TTM)0.73
Shares Outstanding839,346,500
10 Day Avg. Volume1,094,403
30 Day Avg. Volume1,475,751
Financial Highlights & Ratios
PEG Ratio0.61
Price to Book (P/B)1.58
Price to Sales (P/S)1.12
P/FCF Ratio8.81
Enterprise Value/Market Cap0.73
Enterprise Value/Revenue8.72
Enterprise Value/Gross Profit37.19
Enterprise Value/Ebitda66.22
Forecast
1Y Price Target
$17.98Price Target Upside14.13% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
Stella International Holdings Limited Business Overview & Revenue Model
Company DescriptionStella International Holdings Limited (1836) is a leading investment holding company based in Hong Kong, primarily engaged in the manufacturing and marketing of footwear and other related products. The company operates through various segments, including footwear, apparel, and accessories, catering to a diverse clientele across global markets. With a strong emphasis on quality and innovation, Stella International also invests in technology to enhance production efficiency and sustainability in its operations.
How the Company Makes MoneyStella International generates revenue primarily through the manufacturing and sale of footwear, which constitutes a significant portion of its business. The company operates on a business-to-business model, supplying products to well-known international brands and retailers. Key revenue streams include direct sales from footwear manufacturing, licensing agreements, and partnerships with global brands for exclusive product lines. Additionally, the company benefits from economies of scale and a diversified product portfolio, which help to stabilize earnings. Strategic partnerships with major retailers further enhance its market reach, while investments in advanced manufacturing technologies contribute to cost efficiency and improved profit margins.
Stella International Holdings Limited Earnings Call Summary
Earnings Call Date:Mar 21, 2024
(Q4-2023)
| % Change Since: |
Next Earnings Date:Mar 19, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted solid performance in the fourth quarter, with increased revenue and shipment volumes. The company is focusing on operational efficiency and has a strong order book for 2024. However, there are challenges such as a decline in annual revenue, issues in the retail segment, and a weaker luxury market. Overall, the highlights and expectations for efficiency improvements and full order books for 2024 create a balanced sentiment.Q4-2023 Updates
Positive Updates
Fourth Quarter Revenue Increase
The group's unaudited consolidated revenue increased by 13.5% to $389.5 million for the fourth quarter of 2023.
Positive ASP and Operating Margin Trends
The ASP increased by 2.1% for the fourth quarter and by 4.2% for the full year. The company also reported enhanced gross profit margins, better production efficiency, and cost controls supporting the operating margin.
Shipment Volume Growth in Q4
Shipment volume for the fourth quarter increased by about 10.9% year-on-year.
Strong Order Book for 2024
The non-sports side of the business is fully booked for 2024, with some orders turned down due to capacity limitations.
Operational Efficiency Improvements
The company has been enhancing internal structures, which is expected to improve operating margins in 2024.
Negative Updates
Annual Revenue Decline
For the year ended 31st December 2023, the group's unaudited consolidated revenue decreased by approximately 8.5% to $1,492.7 million.
Full Year Shipment Volume Decrease
Shipment volumes for the full year decreased by about 12.5% due to product and customer mix reshaping and destocking by customers.
Retail Segment Challenges
The company is in the process of shutting down most of its retail operations, which has been a challenge over the past few years.
Luxury Segment Weakness
The luxury market is weaker than before, within expectations, but still presents challenges.
Company Guidance
During the earnings call for Stella International Holdings Limited, the company provided detailed guidance for the fourth quarter and the full year of 2023. The group's unaudited consolidated revenue for the fourth quarter increased by 13.5% to $389.5 million, while the full year revenue decreased by 8.5% to $1,492.7 million. The manufacturing business experienced a similar pattern, with a 13.5% revenue increase in the fourth quarter to $380.3 million and an 8.9% decrease for the full year to $1,044.3 million. Shipment volumes rose by 10.9% year-on-year in the fourth quarter but fell by 12.5% for the year. The average selling price (ASP) saw an increase of 2.1% in the fourth quarter and 4.2% for the year, attributed to changes in the customer and product mix. The company remains optimistic about its medium-term goals, aiming for a 10% operating margin and a low teens annualized growth rate in profit after tax over its three-year plan. For 2024, the company anticipates volume growth to be flat to mid-single digits, with ASP likely remaining flat, supported by gross margin improvements, better production efficiency, and cost controls.Stella International Holdings Limited Financial Statement Overview
Summary
Stella International Holdings Limited presents a strong financial profile characterized by steady revenue growth, high profitability, low leverage, and robust cash flow generation. The company's strategic management and financial health position it well for sustained growth. While revenue has not yet returned to its 2019 peak, the consistent improvement in profit margins and cash flow metrics highlights a positive trajectory. Overall, Stella International Holdings is financially sound with a promising outlook.Income Statement
The income statement reveals strong profitability with a Gross Profit Margin of 24.8% and a notable Net Profit Margin of 11.1% for the latest year. Revenue has grown by 3.5% year-over-year, indicating positive growth trends. The EBIT Margin stands at 11.9%, demonstrating efficient operational performance. Overall, Stella International Holdings exhibits solid revenue growth and profitability metrics, though the revenue levels are still lower than peak levels seen in 2019.85
Very Positive
Balance Sheet
The balance sheet is robust with a low Debt-to-Equity Ratio of 0.01, indicating minimal leverage risk. The Return on Equity is strong at 15.5%, showcasing effective management of shareholder capital. Additionally, the company maintains a high Equity Ratio of 77.4%, suggesting financial stability. With increasing equity and low debt levels, Stella International Holdings is well-positioned for future growth.88
Very Positive
Cash Flow
Cash flow analysis shows a healthy Free Cash Flow Growth Rate of 22.0%, with Free Cash Flow reaching $197 million. The Operating Cash Flow to Net Income Ratio is 1.54, underscoring excellent cash generation capabilities. Furthermore, the Free Cash Flow to Net Income Ratio of 1.15 indicates efficient cash conversion from profits. Stella International Holdings demonstrates strong cash flow performance, supporting its operational and financial activities.90
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.16B | 1.55B | 1.49B | 1.63B | 1.54B | 1.14B |
| Gross Profit | 272.65M | 383.96M | 366.73M | 352.13M | 316.85M | 201.66M |
| EBITDA | 153.13M | 220.01M | 218.50M | 192.62M | 160.62M | 54.14M |
| Net Income | 118.42M | 171.05M | 141.07M | 118.03M | 89.69M | 1.69M |
Balance Sheet | ||||||
| Total Assets | 1.45B | 1.42B | 1.36B | 1.26B | 1.30B | 1.15B |
| Cash, Cash Equivalents and Short-Term Investments | 350.80M | 423.55M | 294.48M | 213.65M | 135.69M | 109.31M |
| Total Debt | 67.72M | 12.00M | 15.24M | 22.17M | 29.00M | 22.55M |
| Total Liabilities | 357.47M | 305.83M | 292.24M | 242.13M | 281.49M | 225.72M |
| Stockholders Equity | 1.08B | 1.10B | 1.05B | 998.86M | 998.60M | 924.59M |
Cash Flow | ||||||
| Free Cash Flow | 107.42M | 197.09M | 161.51M | 182.14M | 64.55M | 119.37M |
| Operating Cash Flow | 166.84M | 264.07M | 229.15M | 240.08M | 120.26M | 170.46M |
| Investing Cash Flow | -28.30M | -31.35M | -56.57M | -53.77M | -71.35M | -71.30M |
| Financing Cash Flow | -84.30M | -102.64M | -90.79M | -106.41M | -22.62M | -51.90M |
Stella International Holdings Limited Technical Analysis
Negative
15.75
Price Trends
16.02
Negative
15.78
Negative
15.04
Positive
Market Momentum
-0.02
Positive
39.54
Neutral
10.27
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1836, the sentiment is Negative. The current price of 15.75 is below the 20-day moving average (MA) of 16.13, below the 50-day MA of 16.02, and above the 200-day MA of 15.04, indicating a neutral trend. The MACD of -0.02 indicates Positive momentum. The RSI at 39.54 is Neutral, neither overbought nor oversold. The STOCH value of 10.27 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1836.
Stella International Holdings Limited Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $13.83B | 11.09 | 14.55% | 10.03% | -0.14% | -14.24% | |
81 Outperform | HK$12.16B | 9.28 | 12.52% | 5.18% | 14.63% | 15.55% | |
74 Outperform | $23.20B | 7.87 | 8.72% | 7.71% | 5.75% | 0.93% | |
73 Outperform | HK$355.50M | 5.53 | 28.87% | 5.45% | 31.25% | 147.52% | |
62 Neutral | HK$500.61M | -2.81 | -10.55% | 11.32% | -1.38% | -275.02% | |
61 Neutral | $18.38B | 12.79 | -2.54% | 3.03% | 1.52% | -15.83% | |
49 Neutral | $331.18M | -9.90 | -2.53% | 4.15% | 2.32% | -88.07% |
* Consumer Cyclical Sector Average
HK:1836
Stella International Holdings Limited
15.75
2.46
18.47%
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Stella International Holdings Limited Corporate Events
Stella International Holdings Sees Revenue Growth in Q3 2025
Oct 16, 2025
Stella International Holdings Limited reported a 3.7% increase in consolidated revenue for the third quarter of 2025, driven by a rise in shipment volumes, particularly in the sports segment. The company is addressing challenges in expanding its production facilities in Indonesia and the Philippines, which will aid future operations. Stella plans to return up to US$60 million annually to shareholders through share repurchases and special dividends in 2025 and 2026.
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.