Windmill Group Ltd. (1850) AI Stock Analysis

• Market Cap: HK$169.34M
• Dividend Yield: N/A
• Average Volume (3M): 2.08M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.25
• Revenue Growth: -5.12%
• EPS Growth: -85.86%
• Country: HK
• Employees: 61
• Sector: Industrials
• Sector Strength: 72
• Industry: Security & Protection Services
• EPS (TTM): -0.02
• Shares Outstanding: 172,800,000
• 10 Day Avg. Volume: 1,005,000
• 30 Day Avg. Volume: 2,075,636
• PEG Ratio: -0.61
• Price to Book (P/B): 0.11
• Price to Sales (P/S): 0.09
• P/FCF Ratio: -1.31
• 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: 50 Neutral
• Price Target: HK$0.98 ▲(58.06% Upside)
• Action: Reiterated Date: 03/24/26
• Date: Action: Reiterated 03/24/26

The score is held down mainly by deteriorating fundamentals—revenue decline, razor-thin margins, and persistent negative operating/free cash flow—despite a relatively manageable leverage position. Technicals provide some support with a constructive longer-term trend and neutral-to-positive momentum, while valuation is not supportive due to a negative P/E and no dividend yield data.

Positive Factors

Manageable leverage

A low debt-to-equity ratio (~0.21) supports balance-sheet resilience and provides financial flexibility for 2-6 months and beyond. Manageable leverage reduces refinancing and interest-rate stress, enabling the company to withstand cyclical downturns and retain capacity to fund operations or opportunistic investments.

Growing capital base

An expanding equity base and rising total assets indicate the company has been building capital resources, which improves solvency and underpins long-term operations. A stronger capital base can support scaling, absorb shocks to earnings, and reduce reliance on external funding over time.

Positive reported earnings in 2025

Reported positive net income in 2025 shows the business can still generate profits despite margin pressure. Sustained profitability, even if slim, provides a foundation to rebuild margins and cash generation if cost control or revenue stabilization initiatives succeed over the medium term.

Negative Factors

Revenue decline & margin compression

A near-15% revenue decline combined with razor-thin margins materially weakens the company's ability to absorb costs and invest for growth. Structural revenue deterioration and margin compression reduce cash flow potential and increase dependence on operational improvements to restore durable profitability.

Persistent negative cash flow

Multi-year negative operating and free cash flow erode financial flexibility and constrain reinvestment. Persistent cash outflows force reliance on balance-sheet resources or external financing, raising execution risk for strategic initiatives and reducing the firm's ability to sustain operations during prolonged downturns.

Very low returns and earnings volatility

Extremely low ROE and a history of volatile earnings, including prior losses, signal weak profitability and inconsistent business performance. Poor capital returns limit shareholder value creation and suggest the company may struggle to generate sustainable excess returns without structural changes to margins or revenue stability.

Windmill Group Ltd. Business Overview & Revenue Model

Company Description

WINDMILL Group Limited operates as a fire service installation contractor in Hong Kong. It engages in the design, supply, and installation of fire safety systems for buildings under construction or re-development. The company is also involved in the maintenance and repair of fire safety systems for built premises; and administrative services. In addition, it trades in fire service accessories, including branded fire services equipment, as well as engages in the wholesale of health supplement products. The company was incorporated in 2016 and is based in Kowloon Bay, Hong Kong.

Windmill Group Ltd. Financial Statement Overview

Summary

Financial quality is pressured by weak operating trends and cash conversion: 2025 revenue fell 14.9% YoY with very thin profitability (gross margin ~6.9%, net margin ~0.2%), and operating/free cash flow have been negative for four straight years (2022–2025). The balance sheet is a relative strength with modest leverage (debt-to-equity ~0.21), but returns on equity are very low (~0.2% in 2025), limiting overall strength.

Income Statement

Profitability has weakened materially: revenue declined in 2025 (down 14.9% year over year) and margins compressed (gross margin ~6.9%, net margin ~0.2%). Earnings remain positive in 2025, but net income dropped sharply versus 2024, indicating a thinner cushion against cost pressure. Longer-term results show volatility (losses in 2020 and 2022), which lowers confidence in the stability of the earnings profile despite prior recovery in 2021–2024.

Balance Sheet

Leverage looks manageable with a low debt-to-equity ratio around 0.21 in 2024–2025, supporting balance-sheet resilience. Equity has grown versus earlier years, and total assets expanded, suggesting a strengthening capital base. The main drawback is weak shareholder returns recently (return on equity near 0.2% in 2025, down from 1.1% in 2024), implying the company is not currently generating much profit from its equity base.

Cash Flow

Cash generation is the key pressure point: operating cash flow is negative in each of the last four annual periods (2022–2025), and free cash flow is also negative across those years. While 2025 free cash flow improved versus 2024 (positive growth rate), it remains meaningfully below zero, which can constrain reinvestment flexibility and increase reliance on balance-sheet capacity. The company did produce positive operating and free cash flow in 2021, but the subsequent multi-year reversal weighs on quality and sustainability.

Breakdown	TTM	Apr 2024	Apr 2023	Apr 2022	Apr 2021	Apr 2020
Income Statement
Total Revenue	371.64M	374.35M	394.54M	277.68M	231.26M	197.60M
Gross Profit	23.14M	25.91M	29.00M	30.45M	24.23M	27.45M
EBITDA	-277.00K	7.93M	10.39M	14.56M	-3.91M	9.35M
Net Income	-4.53M	568.00K	2.93M	7.80M	-6.99M	4.89M
Balance Sheet
Total Assets	477.35M	434.56M	397.06M	258.82M	194.63M	180.81M
Cash, Cash Equivalents and Short-Term Investments	46.78M	8.84M	16.89M	25.12M	62.72M	51.44M
Total Debt	53.05M	60.54M	56.60M	59.66M	18.26M	32.36M
Total Liabilities	117.36M	141.38M	123.16M	115.37M	57.57M	66.02M
Stockholders Equity	361.20M	294.37M	275.28M	144.11M	137.06M	114.79M
Cash Flow
Free Cash Flow	-42.71M	-24.60M	-131.77M	-71.21M	-3.06M	26.60M
Operating Cash Flow	-41.50M	-23.99M	-131.69M	-70.99M	-2.02M	27.11M
Investing Cash Flow	-1.32M	-397.00K	6.37M	-2.67M	-4.73M	-1.16M
Financing Cash Flow	66.33M	16.91M	121.17M	35.03M	14.64M	-19.61M

Windmill Group Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.62
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1850, the sentiment is Positive. The current price of 0.62 is below the 20-day moving average (MA) of 0.99, below the 50-day MA of 0.83, and below the 200-day MA of 0.68, indicating a neutral trend. The MACD of 0.05 indicates Positive momentum. The RSI at 53.98 is Neutral, neither overbought nor oversold. The STOCH value of 35.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:1850.

Windmill Group Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3822	69 Neutral	HK$102.48M	0.44	10.95%	10.17%	52.69%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
3728	55 Neutral	HK$62.81M	6.49	6.32%	―	46.37%	-22.94%
2147	51 Neutral	HK$40.99M	-0.17	-18.01%	―	56.39%	-86.79%
1850	50 Neutral	HK$169.34M	-6.69	-1.38%	―	-5.12%	-85.86%
2195	49 Neutral	HK$65.97M	-1.06	-19.64%	―	48.86%	54.49%
6189	38 Underperform	HK$17.35M	-0.35	9.17%	―	―	―

Windmill Group Ltd. Corporate Events

HSC Resources Swings to Interim Loss Despite Stable Revenue

HSC Resources Group Limited reported interim results for the six months ended 31 October 2025 showing largely stable revenue but a swing into loss. Revenue edged down 1.0% year-on-year to approximately HK$268.8 million, while the Group recorded a net loss of about HK$3.0 million versus a profit of HK$2.0 million a year earlier, with basic and diluted loss per share at HK1.72 cents compared with earnings of HK1.23 cents previously. The deterioration in profitability, despite relatively flat sales and cost of sales, reflects higher administrative expenses and finance costs, and the board has decided not to declare an interim dividend, signalling a more cautious capital stance for shareholders.

The most recent analyst rating on (HK:1850) stock is a Hold with a HK$0.50 price target. To see the full list of analyst forecasts on Windmill Group Ltd. stock, see the HK:1850 Stock Forecast page.

HSC Resources Updates Market on Executive Director’s Previous Directorship

HSC Resources Group Limited has issued a supplemental announcement regarding the appointment of executive director Ms. Ma Man Chi, clarifying her previous directorship at another Hong Kong-listed company. The company disclosed that Ms. Ma served as an executive director of China New Holdings Limited, a GEM-board listed firm, from July 2024 to December 2025, updating investors on her background and reinforcing transparency around the composition and experience of its current board.

The most recent analyst rating on (HK:1850) stock is a Hold with a HK$0.50 price target. To see the full list of analyst forecasts on Windmill Group Ltd. stock, see the HK:1850 Stock Forecast page.

HSC Resources Warns of Interim Loss on Margin Pressure and Higher Costs

HSC Resources Group Limited has issued a profit warning, indicating it expects to report an unaudited consolidated loss of at least HK$2.5 million for the six months ended 31 October 2025, reversing from an unaudited profit of about HK$2.0 million in the corresponding period of 2024. The deterioration is mainly attributed to a decline in gross profit margin and higher administrative expenses driven by increased legal and professional fees, signaling margin pressure and rising cost burdens that may concern shareholders and potential investors ahead of the formal interim results announcement expected on 31 December 2025.

The most recent analyst rating on (HK:1850) stock is a Hold with a HK$0.50 price target. To see the full list of analyst forecasts on Windmill Group Ltd. stock, see the HK:1850 Stock Forecast page.