Smart-Core Holdings Ltd. (2166) AI Stock Analysis

• Market Cap: HK$1.49B
• Dividend Yield: 6.74%
• Average Volume (3M): 383.20K
• Price to Earnings (P/E): 12.4
• Beta (1Y): 0.12
• Revenue Growth: -5.58%
• EPS Growth: 22.50%
• Country: HK
• Employees: 312
• Sector: Technology
• Sector Strength: 88
• Industry: Technology Distributors
• EPS (TTM): 0.10
• Shares Outstanding: 488,681,030
• 10 Day Avg. Volume: 229,600
• 30 Day Avg. Volume: 383,200
• PEG Ratio: 0.18
• Price to Book (P/B): 0.76
• Price to Sales (P/S): 0.16
• P/FCF Ratio: 3.37
• 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: 66 Neutral
• Price Target: HK$3.50 ▲(65.09% Upside)

The score is driven primarily by mixed financial performance—stable balance sheet but clear cash flow and revenue/profitability pressures—partly offset by supportive valuation (moderate P/E and solid dividend yield). Technicals are trend-positive but heavily overbought, tempering the overall rating.

Positive Factors

Strategic Partnerships

Strategic partnerships enhance market reach and drive sales, fostering growth in rapidly evolving markets through collaborative projects.

Recurring Revenue Models

Recurring revenue models provide a steady income stream, enhancing financial stability and predictability over time.

Improved Leverage Management

Improved leverage management indicates stronger financial health, allowing for more flexibility in capital allocation and investment.

Negative Factors

Declining Revenue Trend

A declining revenue trend can hinder growth prospects and reduce the company's ability to invest in new opportunities.

Cash Flow Challenges

Cash flow challenges impact the company's ability to manage capital expenditures and growth, limiting operational flexibility.

Declining EBIT Margin

A declining EBIT margin indicates reduced operating efficiency, which can affect long-term profitability and competitiveness.

Smart-Core Holdings Ltd. Business Overview & Revenue Model

Company Description

Smart-Core Holdings Limited, an investment holding company, engages in the distribution of integrated circuits and other electronic components in the People's Republic of China, Singapore, and internationally. The company operates through Authorised Distribution and Independent Distribution segments. Its products are used in various applications, such as television products, smart terminals, memory products, optoelectronic displays, communication, security monitoring, Internet of Things, optical communication, etc. The company also engages in the provision of technical solutions and support services; e-commerce platform business; and the manufacture of optical communication chips. Its principal customers include consumer electronic product manufacturing companies, original design manufacturers, and original equipment manufacturers operating in the electronic product industry. The company was formerly known as Smart-Core Cloud Group Limited and changed its name to Smart-Core Holdings Limited in August 2016. Smart-Core Holdings Limited was founded in 2005 and is based in Kwai Chung, Hong Kong. Smart-Core Holdings Limited is a subsidiary of Smart IC Limited.

How the Company Makes Money

Smart-Core Holdings Ltd. generates revenue primarily through the sale and distribution of electronic components. The company sources these components from a network of manufacturers and suppliers and then distributes them to clients across different industries, including telecommunications, automotive, and consumer electronics. The company's revenue model is based on a markup on the components sold to its clients. Key revenue streams include direct sales to businesses, as well as long-term supply agreements with major manufacturers and distributors. Significant partnerships with global component manufacturers also contribute to its earnings, allowing the company to offer a diverse portfolio of products to its clients.

Smart-Core Holdings Ltd. Financial Statement Overview

Summary

Smart-Core Holdings Ltd. is facing financial challenges with declining revenues and profitability. Despite stable balance sheet metrics and improved leverage, significant cash flow issues pose risks. The company needs to focus on cash generation and revenue growth to improve its financial health.

Income Statement

The company shows a declining revenue trend over recent years, with a significant drop from 2022 to 2023. Gross profit margin is relatively stable, though net profit margin is affected by declining net income. EBITDA margin indicates reasonable operating efficiency, but the declining EBIT margin highlights reduced operating profitability.

Balance Sheet

Smart-Core Holdings Ltd. maintains a relatively stable equity position, with an improving debt-to-equity ratio indicating better leverage management. The equity ratio shows strong asset backing, although total assets have slightly declined. The return on equity is positive, suggesting efficient use of equity to generate profits.

Cash Flow

The cash flow position is challenging, with operating cash flow dropping to zero in the latest year. Free cash flow has been inconsistent, impacting the company's ability to manage capital expenditures and growth. The lack of free cash flow growth and poor operating cash flow to net income ratio are concerning.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.82B	4.65B	5.67B	10.01B	10.39B	5.54B
Gross Profit	330.50M	311.68M	441.46M	1.09B	989.95M	310.46M
EBITDA	118.33M	153.95M	189.30M	558.05M	542.68M	133.10M
Net Income	112.47M	100.34M	71.13M	164.74M	214.06M	71.00M
Balance Sheet
Total Assets	2.26B	1.69B	1.74B	2.86B	3.64B	2.20B
Cash, Cash Equivalents and Short-Term Investments	160.20M	297.72M	395.28M	494.40M	290.93M	238.56M
Total Debt	613.75M	315.68M	484.46M	1.05B	1.67B	754.61M
Total Liabilities	1.30B	734.14M	835.88M	1.66B	2.60B	1.50B
Stockholders Equity	967.93M	959.33M	904.74M	873.37M	805.99M	630.68M
Cash Flow
Free Cash Flow	-280.64M	215.36M	355.83M	859.24M	-447.51M	-192.11M
Operating Cash Flow	-279.93M	216.49M	361.65M	869.75M	-441.23M	-191.03M
Investing Cash Flow	52.34M	33.25M	27.93M	-74.70M	-281.13M	-11.95M
Financing Cash Flow	167.28M	-173.44M	-711.51M	-592.78M	775.02M	256.12M

Smart-Core Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.12
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2166, the sentiment is Positive. The current price of 2.12 is below the 20-day moving average (MA) of 2.15, above the 50-day MA of 2.00, and above the 200-day MA of 1.80, indicating a bullish trend. The MACD of 0.20 indicates Negative momentum. The RSI at 92.21 is Negative, neither overbought nor oversold. The STOCH value of 97.07 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:2166.

Smart-Core Holdings Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1184	76 Outperform	HK$2.75B	6.38	14.95%	8.89%	-0.06%	-6.11%
0529	73 Outperform	HK$597.63M	3.08	5.52%	0.98%	9.73%	90.98%
2166	66 Neutral	HK$1.49B	12.40	11.96%	6.74%	-5.58%	22.50%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
0400	60 Neutral	HK$6.40B	26.53	5.41%	―	33.59%	-15.98%
0595	58 Neutral	HK$358.92M	6.07	3.38%	4.94%	17.39%	-55.26%
6036	53 Neutral	HK$451.55M	30.22	5.11%	―	14.50%	247.50%

Smart-Core Holdings Ltd. Corporate Events

Smart-Core Redirects Unused Funds to Accelerate AI Components Business

Smart-Core Holdings Limited has revised its use of previously unutilised proceeds, shifting funds away from further development of its e-commerce platform and towards expanding its AI-related electronic components business. The company cited persistently offline purchasing habits among customers as a key reason for downgrading the e-commerce platform to a service and support interface, concluding that additional investment there would not be an efficient use of capital. Instead, the group plans to deploy approximately HK$23.9 million by the end of 2028, with HK$8.4 million earmarked for marketing and operating expenses to grow sales and secure new distribution authorisations for AI-related products, and HK$15.5 million for hiring R&D personnel to strengthen technical support and solution services. This reallocation aligns with strong market demand for AI technology, which has already helped lift the group’s interim sales and is expected to further entrench its positioning in the AI infrastructure and applications supply chain.

The most recent analyst rating on (HK:2166) stock is a Buy with a HK$2.50 price target. To see the full list of analyst forecasts on Smart-Core Holdings Ltd. stock, see the HK:2166 Stock Forecast page.

Smart-Core Holdings Redirects HK$23.9 Million Proceeds to AI and Edge Computing Innovations

Smart-Core Holdings Limited announced a change in the allocation of HK$23.9 million proceeds originally intended for enhancing its e-commerce platform to now be directed towards developing solutions for smart terminals, edge computing, and AI-related chip distribution and marketing. This strategic move reflects the company’s shift toward leveraging emerging technologies and signifies its efforts to strengthen industry positioning and diversify its market opportunities, potentially impacting shareholders and stakeholders positively in the high-growth tech sector.

The most recent analyst rating on (HK:2166) stock is a Buy with a HK$2.50 price target. To see the full list of analyst forecasts on Smart-Core Holdings Ltd. stock, see the HK:2166 Stock Forecast page.