Zonqing Environmental Limited (1855) AI Stock Analysis

• Market Cap: HK$5.11B
• Dividend Yield: 0.42%
• Average Volume (3M): 1.29M
• Price to Earnings (P/E): 117.9
• Beta (1Y): 0.13
• Revenue Growth: -27.05%
• EPS Growth: -70.72%
• Country: HK
• Employees: 799
• Sector: Industrials
• Sector Strength: 94
• Industry: Engineering & Construction
• EPS (TTM): <0.01
• Shares Outstanding: 825,000,000
• 10 Day Avg. Volume: 1,307,000
• 30 Day Avg. Volume: 1,292,200
• PEG Ratio: -1.77
• Price to Book (P/B): 7.39
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -26.44
• 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: HK$6.50
• Price Target Upside: 2.69% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 0

• Rating: 42 Neutral
• Price Target: HK$6.00 ▼(-5.21%Downside)

The most significant factor impacting the score is the challenging financial performance with declining revenues and negative cash flows. Technical analysis further indicates a strong bearish trend, and valuation metrics show the stock is overvalued. These factors suggest a high-risk investment with limited upside potential.

Zonqing Environmental Limited Business Overview & Revenue Model

Company Description

Zonqing Environmental Limited (1855) is a company focused on providing environmental protection services and solutions. Operating within the environmental sector, the company offers a range of services including waste management, environmental consulting, and pollution control. Their core services are aimed at helping businesses and government entities meet regulatory standards and improve their environmental impact.

How the Company Makes Money

Zonqing Environmental Limited generates revenue through a combination of service contracts, consulting fees, and partnerships. The company secures contracts with both public and private sector clients to provide waste management and pollution control services, which constitute a significant portion of its revenue. Additionally, Zonqing offers consulting services to help organizations comply with environmental regulations, further enhancing its revenue streams. The company may also engage in strategic partnerships with other environmental firms to expand its service offerings and market reach, thereby contributing to its financial performance.

Zonqing Environmental Limited Financial Statement Overview

Summary

Zonqing Environmental Limited shows declining revenues and net income, high leverage, and negative cash flows. Despite stable gross margins, the company's financial health is strained with significant risks tied to its debt levels and cash flow generation capabilities.

Income Statement

The income statement shows a declining trend in revenues and net income over the past year, with total revenue dropping from 2.36 billion to 1.74 billion and net income significantly decreasing from 135.2 million to 39.97 million. However, the gross profit margin remains relatively stable at around 18%, and there is a positive trend in EBITDA margin at approximately 8.7% indicating some operational efficiency. The company faces challenges in revenue growth and profitability, which affects its score.

Balance Sheet

The balance sheet reveals a stable equity position with stockholders' equity increasing slightly to 668.97 million. The debt-to-equity ratio remains high at 1.33, indicating significant leverage, which is a risk factor. However, the equity ratio is stable at about 15.3%, showing a moderate reliance on equity financing. Overall, the balance sheet presents a mixed picture with potential risks due to high debt levels.

Cash Flow

The cash flow statement indicates a concerning trend with negative operating cash flow of 42.25 million. The free cash flow also turned negative, highlighting liquidity issues. The operating cash flow to net income ratio is negative, suggesting operational inefficiencies. This negative cash flow generation significantly impacts the overall cash flow score.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.74B	2.36B	1.12B	896.75M	1.00B
Gross Profit	314.03M	450.85M	193.75M	191.80M	238.43M
EBITDA	151.03M	250.89M	-35.92M	73.53M	142.44M
Net Income	39.97M	135.21M	-96.34M	28.53M	68.50M
Balance Sheet
Total Assets	4.38B	3.85B	4.18B	2.25B	2.07B
Cash, Cash Equivalents and Short-Term Investments	122.78M	210.41M	220.23M	46.67M	144.00M
Total Debt	891.75M	809.48M	1.06B	509.23M	480.90M
Total Liabilities	3.59B	3.08B	3.26B	1.66B	1.58B
Stockholders Equity	668.97M	649.60M	867.75M	585.31M	474.24M
Cash Flow
Free Cash Flow	-42.26M	209.37M	86.30M	-104.76M	137.59M
Operating Cash Flow	-42.26M	221.53M	99.35M	-101.22M	139.90M
Investing Cash Flow	-79.65M	164.98M	-84.02M	-6.67M	17.27M
Financing Cash Flow	34.27M	-396.33M	116.04M	10.56M	-86.77M

Zonqing Environmental Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 6.33
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1855, the sentiment is Negative. The current price of 6.33 is above the 20-day moving average (MA) of 6.31, below the 50-day MA of 7.37, and below the 200-day MA of 7.24, indicating a bearish trend. The MACD of -0.26 indicates Negative momentum. The RSI at 35.37 is Neutral, neither overbought nor oversold. The STOCH value of 19.81 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1855.

Zonqing Environmental Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1556	79 Outperform	HK$525.00M	4.13	16.58%	5.71%	17.12%	5.48%
2236	62 Neutral	HK$1.69B	11.01	5.53%	―	44.19%	―
Sector *	58 Neutral	HK$14.89B	4.77	-2.78%	5.38%	3.80%	-54.55%
1707	51 Neutral	HK$179.76M	―	-9.34%	―	-40.18%	3.09%
1855	42 Neutral	HK$5.11B	117.90	6.07%	0.42%	-27.05%	-70.72%
2193	38 Underperform	HK$84.76M	―	-8.07%	17.86%	-12.81%	-224.37%

Zonqing Environmental Limited Corporate Events

Zonqing Environmental Limited Strengthens Governance with New Appointment

Zonqing Environmental Limited has announced the appointment of Ms. Lyu Hongyan as a member of its nomination committee, effective June 27, 2025. This appointment is part of the company’s ongoing efforts to strengthen its governance structure, potentially enhancing its strategic decision-making and industry positioning.

Zonqing Environmental Limited Announces Board Composition and Roles

Zonqing Environmental Limited has announced the composition of its board of directors and the roles and functions of each member. The board includes executive, non-executive, and independent non-executive directors, with specific members serving on the audit, remuneration, and nomination committees. This announcement outlines the leadership structure and governance framework, which is crucial for stakeholders to understand the company’s strategic direction and decision-making processes.

Zonqing Environmental Limited Updates Nomination Committee Terms

Zonqing Environmental Limited has revised the terms of reference for its Nomination Committee, which was initially established in December 2020. The committee’s main role is to ensure a fair and transparent process for appointing directors by assessing the board’s balance and effectiveness, and identifying suitable candidates. The revised terms emphasize the importance of diversity and independent non-executive directors in the committee’s composition, aiming to enhance the company’s governance and operational efficiency.

Zonqing Environmental Limited Successfully Concludes AGM with Unanimous Support for Resolutions

Zonqing Environmental Limited held its Annual General Meeting on May 27, 2025, where all proposed resolutions were passed with overwhelming support. Key resolutions included the adoption of the company’s financial statements, reappointment of KPMG as auditors, re-election of directors, and granting mandates for share issuance and repurchase. These decisions reflect strong shareholder confidence and provide the company with flexibility for future growth and operational strategies.