LH Group Limited (1978) AI Stock Analysis

• Market Cap: HK$304.00M
• Dividend Yield: 23.18%
• Average Volume (3M): 174.20K
• Price to Earnings (P/E): 23.1
• Beta (1Y): 0.37
• Revenue Growth: -17.29%
• EPS Growth: -136.42%
• Country: HK
• Employees: 952
• Sector: Consumer Cyclical
• Sector Strength: 77
• Industry: Restaurants
• EPS (TTM): -0.04
• Shares Outstanding: 800,000,000
• 10 Day Avg. Volume: 242,600
• 30 Day Avg. Volume: 174,200
• PEG Ratio: 0.03
• Price to Book (P/B): 1.37
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 8.54
• 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

The overall stock score of 54 reflects significant financial challenges, including declining revenue and profitability, which weigh heavily on the score. Technical analysis supports a bearish outlook with weak momentum indicators. While the high dividend yield is a positive factor, the negative P/E ratio raises concerns about valuation. The company must improve profitability and market sentiment to enhance its stock performance.

LH Group Limited Business Overview & Revenue Model

Company Description

LH Group Limited, established in 1978, operates in a diverse range of sectors including manufacturing, real estate, and technology services. The company is known for its innovative solutions and high-quality products that cater to both industrial and consumer markets. Its core offerings include advanced manufacturing components, property development projects, and cutting-edge software services aimed at enhancing business efficiency.

How the Company Makes Money

LH Group Limited generates revenue through multiple streams. In the manufacturing sector, it earns money by producing and selling specialized components to various industries including automotive and electronics. Its real estate division profits from the development and sale of commercial and residential properties, as well as from rental income. In the technology services sector, the company makes money by offering software development, IT consulting, and support services to businesses seeking to improve operational efficiencies. Key partnerships with industry leaders and a strategic focus on innovation and quality contribute significantly to the company's earnings.

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
	EBIT
261.80M	103.94M	168.47M	100.01M	119.08M
	EBITDA
43.31M	269.26M	239.49M	237.86M	271.77M
	Net Income Common Stockholders
-32.06M	88.06M	77.70M	90.08M	140.33M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
144.81M	252.72M	341.91M	325.36M	338.77M
	Total Assets
786.01M	759.65M	846.59M	783.86M	747.50M
	Total Debt
324.48M	255.18M	223.66M	179.29M	189.15M
	Net Debt
179.67M	107.53M	27.20M	-62.65M	10.01M
	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
0.00	231.97M	170.47M	208.94M	159.73M
	Operating Cash Flow
0.00	252.02M	207.44M	251.71M	178.09M
	Investing Cash Flow
0.00	29.03M	-96.51M	34.20M	-42.83M
	Financing Cash Flow
0.00	-329.85M	-156.41M	-223.12M	-86.88M

LH Group Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.38
• 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:1978, the sentiment is Negative. The current price of 0.38 is below the 20-day moving average (MA) of 0.38, below the 50-day MA of 0.41, and below the 200-day MA of 0.44, indicating a bearish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 43.42 is Neutral, neither overbought nor oversold. The STOCH value of 18.52 is Positive, 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
3306	76 Outperform	$7.49B	8.10	37.41%	11.04%	5.01%	3.59%
3311	71 Outperform	$58.42B	5.95	14.62%	6.94%	1.21%	2.15%
3360	64 Neutral	HK$26.80B	6.45	7.81%	8.70%	-2.96%	-39.02%
Sector *	61 Neutral	$6.98B	11.29	2.93%	3.90%	2.60%	-21.72%
1978	54 Neutral	HK$304.00M	23.14	-12.09%	23.18%	-17.29%	-136.42%
3300	36 Underperform	HK$410.95M	―	-97.33%	―	6.51%	-112.30%

LH Group Limited Corporate Events

LH Group Limited Reports Financial Loss for 2024 Amid Revenue Decline

LH Group Limited announced its annual financial results for the year ended 31 December 2024, reporting a revenue of HK$1,056.0 million, a decrease from HK$1,276.8 million in 2023. The company faced a loss attributable to shareholders of HK$32.1 million, compared to a profit of HK$88.1 million the previous year, indicating a challenging year with increased provisions for impairment and reduced finance income impacting its financial performance.

LH Group Limited Schedules Board Meeting to Discuss Annual Results and Dividend

LH Group Limited has announced a board meeting scheduled for March 27, 2025, to discuss and approve the company’s annual results for the year ending December 31, 2024. The meeting will also consider the potential payment of a final dividend, which could impact shareholder returns and reflect the company’s financial health.

LH Group Limited Issues Profit Warning Amid Revenue Decline

LH Group Limited has issued a profit warning, indicating an expected loss of up to HK$36.0 million for the year ended December 31, 2024, compared to a profit of approximately HK$88.1 million in 2023. The downturn is attributed to decreased revenue due to weak local spending on catering and impairment provisions for underperforming stores. Despite these challenges, the company has taken proactive steps to mitigate the impact, including negotiating rental reductions, optimizing supplier terms, and launching promotional campaigns to maintain a healthy cash flow.