Ernest Borel Holdings Ltd (1856) AI Stock Analysis

• Market Cap: HK$536.78M
• Dividend Yield: N/A
• Average Volume (3M): 967.80K
• Price to Earnings (P/E): 35.3
• Beta (1Y): -0.11
• Revenue Growth: -39.83%
• EPS Growth: -351.13%
• Country: HK
• Employees: 542
• Sector: Consumer Cyclical
• Sector Strength: 73
• Industry: Luxury Goods
• EPS (TTM): -0.12
• Shares Outstanding: 360,257,500
• 10 Day Avg. Volume: 109,800
• 30 Day Avg. Volume: 967,800
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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$1.50
• Price Target Upside: 0.67% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 47 Neutral
• Price Target: HK$1.50 ▲(0.67% Upside)

The overall stock score is heavily impacted by significant financial challenges, with declining revenues, high leverage, and liquidity issues being major concerns. Technical analysis provides some short-term positive momentum, but potential overbought conditions and unattractive valuation metrics temper optimism.

Ernest Borel Holdings Ltd Business Overview & Revenue Model

Company Description

Ernest Borel Holdings Limited, an investment holding company, engages in the designing, manufacturing, marketing, and selling Swiss-made mechanical and quartz watches for men and women in the People's Republic of China, Hong Kong, Macau, Europe, and internationally. It also provides assembly and after-sales services. It sells its products under the Ernest Borel brand. The company was founded in 1856 and is headquartered in Mong Kok, Hong Kong. Ernest Borel Holdings Limited is a subsidiary of VGB Limited.

How the Company Makes Money

Ernest Borel Holdings Ltd generates revenue primarily through the sale of its luxury watches. The company's revenue model is centered around its extensive distribution network, which includes authorized retailers, department stores, and exclusive boutiques worldwide. Key revenue streams include direct sales of timepieces to consumers and wholesale transactions with retail partners. Additionally, the company's brand strength and heritage allow it to command premium pricing for its products, contributing to its profitability. Significant factors in its earnings include strategic marketing campaigns and collaborations with influential figures or events in the luxury market, which enhance brand visibility and consumer appeal.

Ernest Borel Holdings Ltd Financial Statement Overview

Summary

Ernest Borel Holdings Ltd is facing significant financial challenges. The income statement shows declining revenue and negative margins, the balance sheet indicates high leverage with a negative ROE, and cash flow is constrained with zero free and operating cash flow. These factors highlight potential financial instability.

Income Statement

Ernest Borel Holdings Ltd shows a decline in total revenue from the previous year, with a significant decrease from HK$164.99M to HK$99.28M. The gross profit margin stands at 8.7%, reflecting a steep decrease in profitability. The company has experienced negative EBIT and EBITDA margins, indicating operational inefficiencies. Net profit margin is also negative, further emphasizing financial distress.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio of approximately 3.41, indicating substantial leverage risk. Stockholders' equity has decreased, and the ROE is negative due to losses. However, the company maintains a reasonable equity ratio of 18.4%, suggesting some stability in its asset base.

Cash Flow

The cash flow statement reveals a concerning zero free cash flow, indicating challenges in generating cash. The operating cash flow is also zero, reflecting potential issues in cash conversion from operations. The absence of positive cash flow metrics suggests liquidity constraints.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	99.28M	164.99M	137.37M	149.25M	122.60M
Gross Profit	8.62M	87.06M	75.15M	90.83M	72.98M
EBITDA	-60.73M	51.02M	10.88M	-5.09M	11.03M
Net Income	-47.94M	18.87M	-12.07M	-31.82M	1.33M
Balance Sheet
Total Assets	553.00M	656.00M	447.94M	467.38M	474.70M
Cash, Cash Equivalents and Short-Term Investments	36.72M	38.32M	6.27M	7.58M	18.40M
Total Debt	347.02M	56.31M	40.67M	29.24M	37.01M
Total Liabilities	451.10M	488.21M	340.10M	354.61M	322.85M
Stockholders Equity	101.91M	167.79M	107.84M	112.78M	151.84M
Cash Flow
Free Cash Flow	-32.74M	-12.99M	-4.15M	-4.01M	-27.80M
Operating Cash Flow	-27.27M	-9.55M	-1.66M	3.15M	-22.04M
Investing Cash Flow	-294.00K	8.95M	-3.24M	-5.74M	-5.72M
Financing Cash Flow	32.14M	-262.00K	3.02M	-6.80M	25.84M

Ernest Borel Holdings Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.49
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1856, the sentiment is Positive. The current price of 1.49 is above the 20-day moving average (MA) of 1.40, above the 50-day MA of 1.16, and above the 200-day MA of 1.32, indicating a bullish trend. The MACD of 0.10 indicates Positive momentum. The RSI at 69.29 is Neutral, neither overbought nor oversold. The STOCH value of 95.56 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:1856.

Ernest Borel Holdings Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	56 Neutral	HK$25.46B	5.06	-2.69%	5.60%	-0.43%	-53.15%
1856	47 Neutral	HK$536.78M	35.26	-35.55%	―	-39.83%	-351.13%
CEBTF	―	$205.79M	65.56	-6.53%	―	―	―
CHOWF	―	$755.46M	7.86	6.25%	10.78%	―	―
CJEWF	―	$18.09B	23.49	22.73%	3.64%	―	―
EPRJF	―	$352.43M	8.65	4.99%	1.36%	―	―
LKFLF	―	$1.75B	13.60	8.44%	4.70%	―	―

Ernest Borel Holdings Ltd Corporate Events

Ernest Borel Holdings Ltd Successfully Passes All AGM Resolutions

Ernest Borel Holdings Ltd announced that all resolutions proposed at their Annual General Meeting held on May 29, 2025, were passed by shareholders. These resolutions included the adoption of financial statements, re-election and appointment of directors, and granting mandates for share issuance and buyback, reflecting strong shareholder support and potentially enhancing the company’s governance and operational flexibility.

Ernest Borel Holdings Ltd Announces Board Composition

Ernest Borel Holdings Ltd has announced the composition of its board of directors, detailing the roles and functions of its executive, non-executive, and independent non-executive directors. This announcement is crucial for stakeholders as it outlines the leadership structure and governance, potentially impacting the company’s strategic direction and operational efficiency.