EC Healthcare (2138) AI Stock Analysis

• Market Cap: HK$604.46M
• Dividend Yield: 1.72%
• Average Volume (3M): 629.78K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.52
• Revenue Growth: -3.49%
• EPS Growth: -1567.01%
• Country: HK
• Employees: 2,872
• Sector: Healthcare
• Sector Strength: 45
• Industry: Household & Personal Products
• EPS (TTM): >-0.01
• Shares Outstanding: 1,185,211,300
• 10 Day Avg. Volume: 673,306
• 30 Day Avg. Volume: 629,783
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.46
• Price to Sales (P/S): 0.20
• P/FCF Ratio: 1.19
• 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: 48 Neutral
• Price Target: HK$0.51 ▼(-11.40% Downside)
• Action: Reiterated Date: 03/04/26
• Date: Action: Reiterated 03/04/26

The score is driven down primarily by deteriorating financial performance (sharp revenue decline and ongoing losses) and bearish technical signals (price below all key moving averages with negative MACD and weak RSI). Cash flow resilience and a modest dividend provide limited offset, while valuation is constrained by a negative P/E.

Positive Factors

High gross margin (80.7%)

An 80.7% gross margin indicates structural pricing power and low direct service costs in EC Healthcare's clinic model. This margin buffer supports recovery efforts by absorbing fixed overheads and enables operating leverage if demand stabilizes, offering durable protection to profitability over months.

Positive free cash flow growth

FCF growth and near-par conversion to net income (0.92) show the business can generate real cash despite accounting losses. Reliable cash generation supports clinic upkeep, targeted reinvestment, and liability servicing, reducing refinancing pressure and preserving optionality over the medium term.

Diversified clinic network and service mix

A branded clinic network offering both recurring preventive care and higher-margin aesthetic treatments creates multiple revenue streams and cross-sell opportunities. Structural demand for preventive health and aesthetics supports resilience and long-term customer relationships across economic cycles.

Negative Factors

Sharp revenue decline (-29.9% YoY)

A nearly 30% revenue drop materially reduces scale benefits, weakens fixed-cost absorption and limits the firm's ability to invest in growth. Sustained top-line contraction can erode clinic utilization and staff productivity, making margin recovery and cash flow improvements harder to achieve over several quarters.

Negative net margin and ongoing losses

Persisting negative net margins show operating and overhead costs exceed core gross profitability, signaling structural cost or mix issues. Ongoing losses constrain reinvestment and dividend sustainability, increase dependence on cash reserves or financing, and impair long-term shareholder returns unless corrected.

Weak operating cash conversion (OCF/net income 0.39)

Low operating cash conversion relative to net losses points to earnings quality and working-capital or timing issues. This makes the company's cash buffer vulnerable to further revenue shocks and raises the risk of needing external funding to cover operations if FCF growth stalls.

EC Healthcare Business Overview & Revenue Model

Company Description

EC Healthcare, an investment holding company, engages in the provision of medical and healthcare services in Hong Kong, Macau, and the People's Republic of China. The company operates through three segments: Medical, Aesthetic Medical and Beauty and Wellness, and Others. It provides quasi-medical, beauty and wellness, medical imaging, medical surgery, aesthetic medical beauty, aesthetic medical, dental, hair treatment, vaccine, chiropractic, psychological, and orthopedics services. It also offers administrative, management, laboratory testing, performance marketing, marketing, and travel agency services; sells beauty and skincare products; operates in healthcare machines and property investment holding businesses; and provides multi-channel networking and related services, and veterinary services. The company offers products and services primarily under private-label brands, such as PRODERMA LAB, Swissline, Suissebeaute, and re:HEALTH. The company was formerly known as Union Medical Healthcare Limited and changed its name to EC Healthcare in April 2021. EC Healthcare was founded in 2005 and is headquartered in Mong Kok, Hong Kong.

How the Company Makes Money

EC Healthcare generates revenue primarily through the provision of healthcare services across its various clinics and facilities. Key revenue streams include consultation fees, treatment charges, and diagnostic services. The company also earns income from its aesthetic services, which have gained popularity in recent years. Additionally, EC Healthcare may have partnerships with insurance companies, which can provide a steady flow of patients and reimbursement for services rendered. The company’s expansion strategy, including potential mergers and acquisitions, further enhances its revenue potential by increasing its market presence and service offerings.

EC Healthcare Financial Statement Overview

Summary

Weak profitability and shrinking operations: revenue declined 29.9% YoY and net margin is negative despite a high 80.7% gross margin. Balance sheet leverage is moderate (debt-to-equity 0.75) but ROE is negative. Cash flow is a relative support with free cash flow up 8.5%, though operating cash flow is not fully covering losses.

Income Statement

EC Healthcare's income statement shows a concerning trend with declining revenue and profitability. The gross profit margin remains high at 80.7% for 2025, but the net profit margin is negative, indicating losses. Revenue has decreased by 29.9% compared to the previous year, and EBIT and EBITDA margins have also declined, suggesting operational challenges.

Balance Sheet

The balance sheet reflects moderate financial stability with a debt-to-equity ratio of 0.75, which is manageable but has increased over the years. The return on equity is negative, indicating inefficiencies in generating returns for shareholders. However, the equity ratio remains stable, suggesting a reasonable proportion of equity financing.

Cash Flow

Cash flow analysis shows a positive trend with an 8.5% growth in free cash flow. The operating cash flow to net income ratio is 0.39, indicating that cash flows are not fully covering net losses. However, the free cash flow to net income ratio is strong at 0.92, suggesting efficient cash generation relative to net income.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	4.14B	4.21B	3.88B	2.92B	2.08B
Gross Profit	3.34B	3.54B	3.32B	2.57B	1.85B
EBITDA	619.28M	743.26M	786.56M	802.68M	599.41M
Net Income	-167.19M	-18.95M	69.65M	197.50M	192.87M
Balance Sheet
Total Assets	5.03B	5.37B	5.51B	4.86B	3.79B
Cash, Cash Equivalents and Short-Term Investments	1.07B	606.32M	726.84M	872.07M	938.70M
Total Debt	1.34B	1.60B	1.53B	941.11M	1.03B
Total Liabilities	2.82B	2.97B	3.14B	2.51B	2.16B
Stockholders Equity	1.79B	1.96B	1.85B	1.88B	1.27B
Cash Flow
Free Cash Flow	686.07M	527.88M	195.83M	348.09M	471.71M
Operating Cash Flow	743.24M	689.10M	608.32M	608.36M	620.81M
Investing Cash Flow	341.28M	-358.36M	-715.62M	-571.19M	-369.02M
Financing Cash Flow	-633.79M	-486.46M	-51.31M	-99.95M	156.78M

EC Healthcare Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.57
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2138, the sentiment is Negative. The current price of 0.57 is below the 20-day moving average (MA) of 0.60, below the 50-day MA of 0.59, and below the 200-day MA of 0.65, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 31.78 is Neutral, neither overbought nor oversold. The STOCH value of 2.78 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:2138.

EC Healthcare Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2367	66 Neutral	HK$31.87B	11.64	29.64%	1.84%	36.70%	22.26%
3332	62 Neutral	HK$696.65M	6.41	3.92%	―	-0.92%	-71.88%
2145	61 Neutral	HK$22.39B	14.20	39.62%	2.53%	20.78%	18.37%
2023	58 Neutral	HK$383.60M	2.21	10.92%	―	11.10%	-4.38%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%
2138	48 Neutral	HK$604.46M	-20.98	-10.08%	1.72%	-3.49%	-1567.01%
0157	41 Neutral	HK$1.00B	25.19	-12.38%	―	39.29%	-71.82%

EC Healthcare Corporate Events

EC Healthcare Clarifies Share Award Pool and Vesting Terms in Supplemental Filing

EC Healthcare has issued a supplemental announcement to its annual report for the year ended 31 March 2025, detailing additional information on its share award scheme adopted in June 2016. The company clarified the scheme’s limits, vesting conditions and compliance framework, underscoring its approach to staff incentives and alignment with Hong Kong listing rules.

The board confirmed that the total number of award shares available for future grants as at 31 March 2025 was 111,324,126, after 7,197,000 shares previously granted under the scheme were either vested or forfeited. EC Healthcare also emphasized that any future awards will observe a minimum 12-month vesting period and require no payment on application or acceptance, reinforcing long-term employee retention while meeting updated regulatory requirements.

The most recent analyst rating on (HK:2138) stock is a Hold with a HK$0.65 price target. To see the full list of analyst forecasts on EC Healthcare stock, see the HK:2138 Stock Forecast page.

EC Healthcare Raises Stake in Subsidiary via HK$21 Million Connected Deal

EC Healthcare has moved to increase its stake in a non-wholly owned medical subsidiary, referred to as the Target Company, by acquiring an additional 14.6313% interest for HK$21 million through an indirect wholly owned subsidiary. The consideration is being fully settled via set-off against part of a HK$28.13 million settlement fee owed by departing doctors, allowing the group to avoid any cash outflow while facilitating the doctors’ orderly exit from their indirect equity interests. Following completion, which is due within 21 days, the Target Company will remain a non-wholly owned subsidiary whose results continue to be consolidated, while the deal is classified as a connected transaction under Hong Kong’s Listing Rules but benefits from exemptions from circular, independent financial advice and shareholder approval requirements due to its size and terms.

The most recent analyst rating on (HK:2138) stock is a Hold with a HK$0.50 price target. To see the full list of analyst forecasts on EC Healthcare stock, see the HK:2138 Stock Forecast page.