Microware Group Ltd. (1985) AI Stock Analysis

• Market Cap: HK$423.00M
• Dividend Yield: 3.19%
• Average Volume (3M): 1.97M
• Price to Earnings (P/E): 10.9
• Beta (1Y): -0.05
• Revenue Growth: 32.84%
• EPS Growth: 36.36%
• Country: HK
• Employees: 273
• Sector: Technology
• Sector Strength: 82
• Industry: Information Technology Services
• EPS (TTM): 0.04
• Shares Outstanding: 300,000,000
• 10 Day Avg. Volume: 2,819,400
• 30 Day Avg. Volume: 1,971,363
• PEG Ratio: 0.00
• Price to Book (P/B): 1.20
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 3.40
• 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: 68 Neutral
• Price Target: ―

Microware Group Ltd. receives a moderate overall stock score of 68. This reflects a balanced financial performance, with stable revenue growth and profitability, offset by recent cash flow challenges. The stock's valuation is relatively attractive, supported by a fair P/E ratio and a good dividend yield. The technical analysis suggests a slight upward trend, although more detailed indicators are unavailable.

Microware Group Ltd. Business Overview & Revenue Model

Company Description

Microware Group Ltd., established in 1985, is a company that operates in the technology sector, focusing on providing advanced software solutions and IT services. The company specializes in developing innovative software products, offering IT consulting services, and delivering comprehensive enterprise solutions to a diverse range of industries.

How the Company Makes Money

Microware Group Ltd. generates revenue through multiple streams, primarily by selling proprietary software products and offering subscription-based services. The company also earns income from providing IT consulting and implementation services to businesses looking to optimize their technology infrastructure. Additionally, Microware partners with leading technology firms to enhance its offerings and expand its market reach, contributing to its revenue growth.

Microware Group Ltd. Financial Statement Overview

Summary

Microware Group Ltd. demonstrates moderate financial performance with stable growth in revenue and profitability. The company shows a solid gross profit margin of 11.7% and net profit margin of 2.9%, with a conservative debt-to-equity ratio of 0.11 and a healthy equity ratio of 35.1%. However, recent cash flow challenges with negative free cash flow and operating cash flow pose risks, despite historically strong free cash flow generation.

Income Statement

Microware Group Ltd. shows a solid gross profit margin of 11.7% and net profit margin of 2.9% for the latest year. The revenue growth rate of 5.8% indicates moderate growth. However, the EBIT margin of 3.4% suggests room for improvement in operational efficiency.

Balance Sheet

The company maintains a conservative debt-to-equity ratio of 0.11, indicating low leverage and financial stability. The equity ratio stands at 35.1%, reflecting a healthy balance between debt and equity. Return on Equity (ROE) is moderate at 20.0%, showcasing decent profitability for shareholders.

Cash Flow

The free cash flow has turned negative, indicating potential cash flow challenges. The operating cash flow is negative compared to net income, suggesting difficulties in converting earnings into cash. However, the company has shown strong free cash flow generation historically, which is a positive sign.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
1.46B	1.23B	1.17B	1.15B	1.11B	1.37B
	Gross Profit
154.76M	144.96M	121.57M	132.62M	142.03M	150.25M
	EBIT
39.09M	41.97M	31.28M	39.98M	54.69M	50.17M
	EBITDA
53.31M	57.59M	45.17M	51.67M	64.97M	52.47M
	Net Income Common Stockholders
36.88M	36.23M	33.18M	31.97M	47.33M	40.62M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
89.72M	165.19M	293.33M	269.61M	267.57M	252.30M
	Total Assets
636.95M	516.94M	516.83M	543.22M	489.47M	551.94M
	Total Debt
139.24M	20.57M	12.61M	22.88M	7.27M	8.10M
	Net Debt
69.53M	-139.23M	-275.56M	-246.72M	-255.20M	-228.78M
	Total Liabilities
445.70M	335.63M	304.36M	332.42M	268.65M	318.04M
	Stockholders Equity
191.25M	181.31M	212.47M	211.76M	221.79M	234.46M
Cash Flow		Free Cash Flow
6.82M	-24.86M	74.92M	43.77M	82.99M	7.02M
	Operating Cash Flow
10.09M	-24.62M	77.21M	45.97M	86.47M	9.72M
	Investing Cash Flow
-91.72M	4.26M	-1.48M	-1.38M	6.84M	3.92M
	Financing Cash Flow
35.88M	-68.10M	-52.06M	-42.56M	-67.72M	-17.01M

Microware Group Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.41
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1985, the sentiment is Positive. The current price of 1.41 is below the 20-day moving average (MA) of 1.45, above the 50-day MA of 1.36, and above the 200-day MA of 1.29, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 53.51 is Neutral, neither overbought nor oversold. The STOCH value of 58.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:1985.

Microware Group Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1686	80 Outperform	€17.52B	18.18	19.23%	1.51%	12.91%	5.31%
0855	76 Outperform	$10.33B	7.06	11.34%	8.21%	-16.07%	-14.55%
0763	74 Outperform	HK$159.37B	13.19	11.39%	2.93%	-2.65%	-14.96%
0728	71 Outperform	€738.23B	14.73	7.35%	3.48%	0.01%	5.43%
3888	71 Outperform	$48.17B	27.36	7.07%	0.44%	19.66%	169.54%
1985	68 Neutral	HK$423.00M	10.93	19.22%	3.19%	32.84%	36.36%
Sector *	62 Neutral	$11.92B	10.48	-7.50%	2.95%	7.40%	-8.18%

Microware Group Ltd. Corporate Events

Microware Group Clarifies Offer Form Error, Confirms Correct Share Price

Microware Group Limited, in collaboration with Weiye Holdings Group Limited, has issued a joint announcement to clarify a clerical error in the Form of Acceptance related to a composite offer. The error involved the consideration amount, which was incorrectly stated as HK$0.10 instead of the correct HK$1.36 per share. The company will dispatch a revised form to shareholders by May 6, 2025. Despite the error, the offer price remains HK$1.36 per share, and shareholders who have already submitted the original form will still have their acceptance considered valid if completed correctly.

Microware Group Limited Announces Despatch of Composite Document for Share Acquisition Offer

Microware Group Limited has announced the despatch of a composite document related to a voluntary conditional cash offer by Astrum Capital Management Limited on behalf of Weiye Holdings Group Limited to acquire all issued shares of Microware Group Limited not already owned by the offeror. This move signifies a strategic financial maneuver that could impact the company’s market positioning and shareholder value, with the offer opening for acceptance on April 28, 2025.

Microware Group Issues Clarification on Profit Warning Amidst Decreased Earnings

Microware Group Limited has issued a clarification on its profit warning, indicating a significant decrease in profit before taxation for the year ended March 31, 2025, compared to the previous year. The decrease is primarily due to share-based compensation expenses related to a share award scheme. The company is still finalizing its annual results and advises caution to shareholders and potential investors regarding the profit warning, as it does not meet the standard required by the Takeovers Code.

Microware Group Issues Profit Warning Amid Share-Based Compensation Impact

Microware Group Limited has issued a profit warning, indicating a significant decrease in profits for the year ending March 31, 2025, compared to the previous year. The decrease is primarily attributed to share-based compensation expenses related to a share award scheme. The company is in the process of finalizing its annual results and advises caution to shareholders and potential investors regarding the profit warning, as it does not meet the standard required by the Hong Kong Code on Takeovers and Mergers.

Microware Group Delays Dispatch of Composite Document for Cash Offer

Microware Group Limited and Weiye Holdings Group Limited have announced a delay in the dispatch of their composite document related to a voluntary conditional cash offer by Astrum Capital Management Limited. The delay, extending the dispatch deadline from April 10 to April 29, 2025, is due to the need for additional time to finalize certain information, including advice from the Independent Financial Adviser and statements on the company’s financial position. This extension has been approved by the Executive, and further announcements will be made regarding the dispatch of the document.

Microware Group Receives Voluntary Cash Offer for Shares

Microware Group Limited has announced a voluntary conditional cash offer made by Astrum Capital Management Limited on behalf of an offeror to acquire all issued shares of the company, excluding those already owned by the offeror and its affiliates. The offer price is set at HK$1.36 per share, with the offeror currently holding approximately 30.33% of the company’s shares. The offer is compliant with the Takeovers Code and will be extended to all independent shareholders. The company has not declared any dividends or distributions and does not intend to do so before the offer closes. The offeror has stated it will not increase the offer price.