Microware Group Ltd. (1985) AI Stock Analysis

• Market Cap: HK$360.00M
• Dividend Yield: 8.33%
• Average Volume (3M): 151.40K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.19
• Revenue Growth: -1.86%
• EPS Growth: -105.19%
• Country: HK
• Employees: 273
• Sector: Technology
• Sector Strength: 88
• Industry: Information Technology Services
• EPS (TTM): <0.01
• Shares Outstanding: 300,000,000
• 10 Day Avg. Volume: 259,000
• 30 Day Avg. Volume: 151,400
• PEG Ratio: -0.58
• Price to Book (P/B): 1.60
• Price to Sales (P/S): 0.24
• P/FCF Ratio: 4.49
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 55 Neutral
• Price Target: HK$1.00 ▼(-16.67% Downside)

Microware Group Ltd. has a moderate financial performance with strong cash flow and a stable balance sheet, but faces challenges in profitability and valuation. The technical analysis indicates bearish momentum, which is a significant risk. The high dividend yield is a positive aspect but is overshadowed by the negative P/E ratio and technical indicators.

Positive Factors

Cash Generation

Strong cash generation capabilities enhance the company's ability to reinvest in growth opportunities and maintain financial flexibility.

Balance Sheet Health

Low leverage and financial stability provide a solid foundation for long-term growth and resilience against economic fluctuations.

Revenue Streams

Diverse revenue streams from software, services, and partnerships reduce dependency on a single source and enhance business stability.

Negative Factors

Profitability Margins

Declining profitability margins indicate challenges in maintaining operational efficiency, which could impact long-term earnings potential.

Revenue Growth

Negative revenue growth suggests potential market challenges or competitive pressures, impacting future business expansion.

Earnings Growth

Significant decline in EPS growth indicates potential issues in profitability and could affect investor confidence and stock performance.

Microware Group Ltd. Business Overview & Revenue Model

Company Description

Microware Group Limited, an investment holding company, provides information technology (IT) infrastructure solutions and IT managed services for the government, educational institutions, public bodies, non-profits organizations, and commercial organizations in Hong Kong. The company offers consultancy and advisory; and hardware and software procurement services, as well as cyber securities training programs. In addition, it engages in the management and maintenance of the IT infrastructure solutions. The company was incorporated in 2016 and is headquartered in Kwun Tong, Hong Kong. Microware Group Limited is a subsidiary of Microware International Holdings Limited.

How the Company Makes Money

Microware Group Ltd. generates revenue through multiple streams, primarily by selling software licenses for its operating systems and development tools. The company also earns money through service contracts, providing technical support, and consulting services to clients who require assistance in integrating and optimizing their systems. Additionally, Microware Group Ltd. has established partnerships with key players in the telecommunications and automotive sectors, which help to drive sales through collaborative projects and joint ventures. The company may also receive revenue from training programs and workshops aimed at educating clients on using its products effectively.

Microware Group Ltd. Financial Statement Overview

Summary

Microware Group Ltd. demonstrates moderate financial health with consistent revenue growth and strong cash flow generation. The company maintains a stable balance sheet with low leverage, though profitability margins have faced pressure. The overall financial position is solid, with opportunities for improving operational efficiency and profitability.

Income Statement

Microware Group Ltd. has shown consistent revenue growth over the years, with a recent growth rate of 2.4%. However, profitability margins such as net profit margin and EBIT margin have declined, indicating pressure on operational efficiency. The gross profit margin has improved slightly, suggesting better cost management. Overall, the income statement reflects moderate growth with some profitability challenges.

Balance Sheet

The company maintains a healthy balance sheet with a low debt-to-equity ratio of 0.31, indicating low leverage and financial stability. Return on equity has decreased to 3.66%, reflecting reduced profitability. The equity ratio remains strong, suggesting a solid capital structure. Overall, the balance sheet is stable with low financial risk.

Cash Flow

Microware Group Ltd. has significantly improved its free cash flow, with a growth rate of over 1000%, indicating strong cash generation capabilities. The operating cash flow to net income ratio is positive, reflecting efficient cash conversion. However, the free cash flow to net income ratio has decreased, suggesting potential reinvestment or operational challenges. Overall, the cash flow statement shows robust cash generation with some areas for improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.49B	1.49B	1.23B	1.17B	1.15B	1.11B
Gross Profit	188.26M	188.26M	144.96M	121.57M	132.62M	142.03M
EBITDA	39.15M	39.15M	57.59M	45.17M	51.67M	64.97M
Net Income	8.16M	8.16M	36.23M	33.18M	31.97M	47.33M
Balance Sheet
Total Assets	727.33M	727.33M	516.94M	516.83M	543.22M	489.47M
Cash, Cash Equivalents and Short-Term Investments	170.40M	170.40M	165.19M	293.33M	269.61M	267.57M
Total Debt	70.06M	70.06M	20.57M	12.61M	22.88M	7.27M
Total Liabilities	504.72M	504.72M	335.63M	304.36M	332.42M	268.65M
Stockholders Equity	222.62M	222.62M	181.31M	212.47M	211.76M	221.79M
Cash Flow
Free Cash Flow	79.82M	79.19M	-24.86M	74.92M	43.77M	82.99M
Operating Cash Flow	86.78M	86.78M	-24.62M	77.21M	45.97M	86.47M
Investing Cash Flow	-42.36M	-60.99M	4.26M	-1.48M	-1.38M	6.84M
Financing Cash Flow	-22.47M	-24.67M	-68.10M	-52.06M	-42.56M	-67.72M

Microware Group Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.20
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1985, the sentiment is Negative. The current price of 1.2 is above the 20-day moving average (MA) of 1.19, below the 50-day MA of 1.28, and below the 200-day MA of 1.37, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 43.61 is Neutral, neither overbought nor oversold. The STOCH value of 87.50 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1985.

Microware Group Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1522	71 Outperform	HK$702.54M	3.84	6.75%	7.16%	7.39%	2.23%
0046	70 Outperform	HK$373.73M	12.69	5.83%	7.14%	-1.26%	-10.80%
1075	64 Neutral	HK$892.61M	42.02	1.79%	2.46%	8.90%	―
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
0771	61 Neutral	HK$666.96M	4.37	6.77%	3.66%	5.84%	94.89%
1985	55 Neutral	HK$360.00M	-179.10	-0.83%	8.33%	-1.86%	-105.19%
1204	54 Neutral	HK$995.00M	1,421.43	0.21%	―	1.52%	-83.72%

Microware Group Ltd. Corporate Events

Microware Group Reports Decline in Revenue and Profit for Interim 2025

Microware Group Limited reported a decrease in total revenue to approximately HK$658.8 million for the six months ending 30 September 2025, an 8.6% decline from the previous period. The company’s profit and total comprehensive income also fell significantly by 77% to HK$3.1 million, primarily due to increased administrative expenses. Despite the decline in earnings, the company maintained its decision not to declare an interim dividend, consistent with the previous period.

Microware Group Issues Profit Warning Amid Rising Expenses

Microware Group Limited has issued a profit warning, indicating a significant decrease in profit for the six months ended September 30, 2025, compared to the same period in 2024. The decline, attributed to increased operating expenses due to business expansion in the Chinese Mainland, highlights potential challenges in the company’s financial performance and market positioning.

Microware Group Schedules Board Meeting for Interim Results

Microware Group Limited has announced that its board of directors will meet on November 27, 2025, to review and approve the interim financial results for the six months ending September 30, 2025. The meeting will also consider the declaration of an interim dividend and address other business matters, which could impact the company’s financial strategy and stakeholder interests.

Microware Group Faces Delay in 2025 Annual Results Due to Expansion Challenges

Microware Group Limited announced a delay in the publication of its 2025 Annual Results due to challenges in collecting necessary information from suppliers, creditors, and investees. The delay is attributed to the company’s business expansion into Mainland China and the need for additional time to complete due diligence and valuation processes. To prevent future delays, the company plans to commence valuation work earlier, improve communication, and inform auditors of new business developments in advance.