LH Group Limited (1978) AI Stock Analysis

• Market Cap: HK$292.00M
• Dividend Yield: 24.14%
• Average Volume (3M): 165.00K
• Price to Earnings (P/E): 23.1
• Beta (1Y): 0.43
• Revenue Growth: -17.29%
• EPS Growth: -136.42%
• Country: HK
• Employees: 952
• Sector: Consumer Cyclical
• Sector Strength: 68
• Industry: Restaurants
• EPS (TTM): >-0.01
• Shares Outstanding: 800,000,000
• 10 Day Avg. Volume: 246,600
• 30 Day Avg. Volume: 165,000
• PEG Ratio: 0.03
• Price to Book (P/B): 1.24
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 7.68
• 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

• Rating: 53 Neutral
• Price Target: HK$0.50 ▲(38.89%Upside)

The overall stock score of 53 reflects significant financial performance challenges, including fluctuating revenues and profitability concerns, alongside increased leverage. Technical analysis shows neutral market sentiment, while a negative P/E ratio highlights valuation issues, albeit offset slightly by a high dividend yield.

LH Group Limited Business Overview & Revenue Model

Company Description

LH Group Limited, together with its subsidiaries, operates as a full service multi-brand restaurant company in Hong Kong. Its restaurants specialize in Asian cuisines, including Japanese, Korean, Cantonese, and Shanghainese cuisines. As of December 31, 2021, the company operated one Cantonese restaurant under the Pot Master self-owned brand name; and 44 Asian restaurants under the Mou Mou Club, Peace Cuisine, and Wing Wah Allday self-owned brands, as well as Gyu-Kaku, Gyu-Kaku Jinan-Bou, On-Yasai, and Yoogane franchised brands. The company also sells food ingredients to related parties, and external third parties and other businesses; and provides plant-based burger steaks, Omnipork, and Impossible foods in dim sum, dishes, and hot pot dishes. In addition, it engages in the property holding activities; provision of management services; and provision of procurement and logistics services, as well as trades in ingredients. LH Group Limited was incorporated in 2017 and is based in Kowloon Bay, Hong Kong. LH Group Limited is a subsidiary of LHG Holdings Limited.

How the Company Makes Money

LH Group Limited generates revenue through multiple streams including logistics services, which involve transportation and warehousing solutions for a wide array of clients. The manufacturing division contributes significantly to earnings by producing high-quality products tailored to client specifications, often leveraging advanced technology for efficiency. Additionally, the company offers technology solutions that include software and systems integration services, which are vital for clients looking to enhance their operational capabilities. Strategic partnerships with key industry players further bolster revenue, allowing for expanded service offerings and access to new markets. Overall, the diverse portfolio and adaptability to market demands play a crucial role in the company's financial success.

LH Group Limited Financial Statement Overview

Summary

LH Group Limited faces challenges with declining revenue and profitability, resulting in negative net income. The balance sheet shows moderate leverage but low equity ratios, which may pose financial risks. Limited cash flow data restricts a full assessment, but historical data suggests some ability to generate free cash flow. The company needs to address revenue growth and profitability to improve financial stability.

Income Statement

The company experienced a revenue decline from the previous year, with a negative revenue growth rate. Gross profit margin is moderate at 31.3%. However, the net profit margin is negative due to a net loss, indicating profitability challenges.

Balance Sheet

The debt-to-equity ratio is 1.39, showing moderate leverage. The equity ratio stands at 29.6%, which is relatively low and suggests a dependency on debt. The return on equity is negative, reflecting the net loss and impacting shareholder returns.

Cash Flow

There is a lack of available cash flow data for the current year, making it difficult to assess cash flow performance. Historically, the company has managed positive free cash flow, but recent trends are unclear.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.06B	1.28B	1.06B	997.92M	802.85M
Gross Profit	331.74M	505.16M	431.55M	391.29M	336.92M
EBITDA	43.31M	269.26M	239.49M	237.86M	271.77M
Net Income	-32.06M	88.06M	77.70M	90.08M	140.33M
Balance Sheet
Total Assets	786.01M	759.65M	846.59M	783.86M	747.50M
Cash, Cash Equivalents and Short-Term Investments	144.81M	252.72M	341.91M	325.36M	338.77M
Total Debt	324.48M	255.18M	223.66M	179.29M	189.15M
Total Liabilities	553.14M	462.24M	437.09M	403.66M	332.90M
Stockholders Equity	232.87M	297.41M	409.50M	380.20M	414.60M
Cash Flow
Free Cash Flow	54.68M	231.97M	170.47M	208.94M	159.73M
Operating Cash Flow	120.56M	252.02M	207.44M	251.71M	178.09M
Investing Cash Flow	43.01M	29.03M	-96.51M	34.20M	-42.83M
Financing Cash Flow	-166.41M	-329.85M	-156.41M	-223.12M	-86.88M

LH Group Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.36
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1978, the sentiment is Negative. The current price of 0.36 is below the 20-day moving average (MA) of 0.36, below the 50-day MA of 0.36, and below the 200-day MA of 0.42, indicating a bearish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 48.40 is Neutral, neither overbought nor oversold. The STOCH value of 56.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1978.

LH Group Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8371	73 Outperform	HK$704.65M	7.35	37.72%	7.24%	23.80%	6.14%
1314	62 Neutral	HK$268.83M	21.20	2.54%	17.95%	-2.52%	45.64%
1443	58 Neutral	HK$88.40M	10.67	-41.01%	5.00%	1.74%	-46.43%
Sector *	57 Neutral	HK$24.98B	3.78	-1.97%	5.91%	-0.17%	-66.83%
1978	53 Neutral	HK$292.00M	23.14	-12.09%	24.14%	-17.29%	-136.42%
0126	49 Neutral	HK$188.56M	―	-4.46%	―	-7.62%	-46.31%
BVI	―	€33.40M	7.60	-4.41%	35.44%	―	―

LH Group Limited Corporate Events

LH Group Limited Announces Board Composition and Committee Roles

LH Group Limited has announced the composition of its Board of Directors, which includes both executive and independent non-executive directors. The Board has also established three committees: the Audit Committee, the Remuneration Committee, and the Nomination Committee, with specific directors assigned as members or chairpersons of these committees. This announcement provides clarity on the governance structure of LH Group Limited, potentially impacting its strategic decision-making and operational oversight.

LH Group Limited Sets New Terms for Nomination Committee

LH Group Limited has announced the terms of reference for its Nomination Committee, effective from June 5, 2025. The committee, established by the board in 2017, will adhere to the Listing Rules of the Hong Kong Stock Exchange and other regulatory requirements. The committee will consist of at least three members, primarily independent non-executive directors, ensuring gender diversity. This move is expected to enhance governance and transparency, potentially impacting the company’s operational efficiency and stakeholder confidence.

LH Group Limited AGM Resolutions Passed

LH Group Limited recently held its Annual General Meeting (AGM) on June 5, 2025, where all proposed resolutions were passed by poll. The resolutions included the re-election of directors, re-appointment of auditors, and granting of mandates for share issuance and repurchase. These decisions reflect the company’s continued focus on maintaining strong governance and operational flexibility.

LH Group Limited Announces 2025 Annual General Meeting

LH Group Limited has announced its upcoming annual general meeting, set to take place on June 5, 2025, in Hong Kong. The meeting will cover the review of the company’s financial statements, re-election of directors, re-appointment of auditors, and consideration of resolutions regarding the issuance of shares. These resolutions, if approved, would empower the directors to manage share allotments and related financial maneuvers, potentially impacting shareholder value and company operations.