Precious Dragon Technology Holdings Ltd. (1861) AI Stock Analysis

• Market Cap: HK$500.58M
• Dividend Yield: 2.76%
• Average Volume (3M): 15.53K
• Price to Earnings (P/E): 8.0
• Beta (1Y): 0.13
• Revenue Growth: 17.38%
• EPS Growth: 15.93%
• Country: HK
• Employees: 468
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Specialty Retail
• EPS (TTM): 0.23
• Shares Outstanding: 233,917,250
• 10 Day Avg. Volume: 1,800
• 30 Day Avg. Volume: 15,533
• PEG Ratio: -0.20
• Price to Book (P/B): 0.79
• Price to Sales (P/S): 0.42
• P/FCF Ratio: 9.93
• 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: 77 Outperform
• Price Target: HK$2.50 ▲(28.21% Upside)

The score is driven primarily by solid financial health (notably a strong, low-leverage balance sheet) and supportive technical uptrend signals. Valuation is also favorable with a low P/E and dividend yield, but the overall score is capped by declining revenue, softer net margins, and zero free cash flow in 2024.

Positive Factors

Balance Sheet Strength

Very low leverage and a high equity ratio provide durable financial flexibility. This reduces refinancing and solvency risk, supports funding for strategic investments or contract performance, and gives resilience through industry cycles over the next several months.

High Gross Margin

A sustained gross margin near 37% indicates effective cost control and pricing power for core services. This margin buffer helps absorb topline volatility, supports reinvestment in tech and talent, and underpins longer-term profitability if revenue stabilizes or grows.

Diversified Service Revenue Model

Multiple revenue streams (project fees, maintenance, licensing, telco and government partnerships) reduce client concentration and create recurring income elements. Structural diversity improves predictability of revenues and supports steady contract pipelines over months ahead.

Negative Factors

Zero Free Cash Flow in 2024

Absent free cash flow constrains the company's ability to self-fund growth, pay dividends, or build cash buffers. Over a multi-month horizon this forces reliance on external financing or equity, reducing operational flexibility and increasing exposure to financing costs or capital constraints.

Declining Net Profit Margin

A falling net margin implies rising operating costs or pressure on pricing that erodes bottom-line returns. Persisting margin compression weakens ROE and cash available for reinvestment, making it harder to sustain long-term competitiveness and fund strategic initiatives.

Revenue Decline from 2023

Topline contraction reduces scale benefits and harms leverage over fixed costs. If revenue weakness persists, it undermines margin recovery and investment capacity, necessitating structural remedies (new markets, product expansion) to restore growth and long-term financial health.

Precious Dragon Technology Holdings Ltd. Business Overview & Revenue Model

Company Description

Precious Dragon Technology Holdings Limited engages in the design, development, manufacture, and sale of aerosol and non-aerosol products used in automotive beauty and maintenance products in the Mainland China, Japan, Asia, the Middle East, the Americas, and internationally. The company operates through two segments, Automotive Beauty and Maintenance Products, and Personal Care Products. Its automotive beauty and maintenance products include auto cleaning and maintenance products, such as auto interior decoration cleaning products, and tyre and wheel cleaning and care products; paint and coating products comprising chrome aerosol spray; winter and summer specials, such as refrigerant and cold cranking agents; and air-fresheners. The company also offers personal care products, including foaming facial wash, sunscreens, moisturizer, deodorizer, and hand wash; household products, such as paint and floor polish; and packaging materials. In addition, it engages in the content filling of aerosol cans. The company sells its original brand manufacturing products under own or licensed brand names, including BOTNY, ATM, ETOMAN, NISSEI, WIN, FOX-D, PISCIS, and PARLUX through distributors and the online retail stores at Tmall and JD.com. Further, it offers contract manufacturing service products; sells ethanol; and trades in aerosol and non-aerosol products. Precious Dragon Technology Holdings Limited was founded in 2000 and is headquartered in Guangzhou, China.

How the Company Makes Money

Precious Dragon Technology Holdings Ltd. generates revenue primarily through the provision of technology services, including software development, system integration, and consulting services. The company's revenue model is built on charging clients for project-based contracts, ongoing maintenance and support services, and licensing fees for proprietary technology products. Key revenue streams include service contracts with corporate clients, long-term partnerships with telecommunications providers, and potential revenue from technology licensing agreements. Additionally, the company may benefit from strategic collaborations with other tech firms and government contracts, which can provide stable income and opportunities for growth.

Precious Dragon Technology Holdings Ltd. Financial Statement Overview

Summary

The company demonstrates strong cost management and a solid balance sheet with a high equity ratio and low leverage. However, declining revenue, net profit margins, and cash flow issues are significant concerns that need addressing.

Income Statement

The company shows a strong gross profit margin of 37.07% in 2024, reflecting good cost management and pricing power. However, the net profit margin of 5.56% indicates room for improvement, as it has dropped from the previous year. EBIT and EBITDA margins demonstrate stable operational efficiency, but revenue growth is a concern, with a decline from 2023.

Balance Sheet

The balance sheet is solid with a strong equity base, as evidenced by an improving equity ratio of 68.39% in 2024. The debt-to-equity ratio of 0.13 suggests low leverage, minimizing financial risk. ROE decreased to 10.45%, indicating a need for more efficient capital use.

Cash Flow

Cash flow management is an area for improvement, with zero free cash flow reported in 2024. Previous years showed positive free cash flow, highlighting potential fluctuations. The operating cash flow to net income ratio is not available for 2024, making it difficult to assess cash conversion efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	663.47M	612.97M	557.22M	559.78M	610.35M	665.65M
Gross Profit	280.94M	227.25M	175.90M	154.19M	157.09M	223.52M
EBITDA	72.07M	60.92M	99.32M	83.33M	56.00M	117.36M
Net Income	62.80M	34.07M	56.92M	42.00M	18.09M	53.16M
Balance Sheet
Total Assets	531.89M	476.53M	484.76M	475.21M	522.81M	521.27M
Cash, Cash Equivalents and Short-Term Investments	155.87M	105.61M	114.15M	104.63M	110.13M	161.62M
Total Debt	38.72M	25.32M	35.54M	50.94M	120.37M	68.78M
Total Liabilities	150.78M	151.05M	176.84M	207.56M	276.48M	295.55M
Stockholders Equity	381.54M	325.91M	308.37M	267.88M	246.50M	225.82M
Cash Flow
Free Cash Flow	37.06M	25.91M	57.76M	47.41M	-20.06M	22.33M
Operating Cash Flow	51.18M	48.35M	76.45M	67.72M	59.99M	78.84M
Investing Cash Flow	21.18M	-20.00M	-17.16M	-19.38M	-79.93M	-56.65M
Financing Cash Flow	-30.66M	-32.04M	-39.27M	-43.63M	-56.65M	-1.55M

Precious Dragon Technology Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.95
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1861, the sentiment is Positive. The current price of 1.95 is below the 20-day moving average (MA) of 2.04, above the 50-day MA of 1.89, and above the 200-day MA of 1.49, indicating a bullish trend. The MACD of 0.08 indicates Negative momentum. The RSI at 56.88 is Neutral, neither overbought nor oversold. The STOCH value of 47.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:1861.

Precious Dragon Technology Holdings Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1861	77 Outperform	HK$500.58M	7.97	17.60%	2.76%	17.38%	15.93%
2420	77 Outperform	HK$1.75B	9.58	27.30%	4.07%	23.59%	―
2101	64 Neutral	HK$510.80M	33.52	1.04%	―	-36.58%	-84.25%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
0178	56 Neutral	HK$1.83B	19.34	8.44%	4.75%	-3.18%	-36.46%
8536	48 Neutral	HK$50.15M	-5.00	-13.87%	―	3.82%	68.82%
1759	44 Neutral	HK$211.68M	-17.52	-3.11%	―	50.72%	-434.09%

Precious Dragon Technology Holdings Ltd. Corporate Events

Precious Dragon Technology Invests RMB34.8 Million to Expand Guangzhou Production Plant

Precious Dragon Technology Holdings has entered into a RMB34.8 million construction agreement via its subsidiary Euro Asia Aerosol for the construction and renovation of a production plant in Guangzhou, engaging an independent contractor to build new facilities for household, plastic and aerosol product manufacturing and to upgrade safety features. Classified as a discloseable transaction under Hong Kong listing rules, the investment signals an expansion and modernization of the company’s production infrastructure, which may enhance operational capacity, safety standards and competitiveness within its core product markets.

The most recent analyst rating on (HK:1861) stock is a Buy with a HK$2.00 price target. To see the full list of analyst forecasts on Precious Dragon Technology Holdings Ltd. stock, see the HK:1861 Stock Forecast page.