Kato (Hong Kong) Holdings Ltd. (2189) AI Stock Analysis

• Market Cap: HK$470.00M
• Dividend Yield: 4.26%
• Average Volume (3M): 102.28K
• Price to Earnings (P/E): 21.5
• Beta (1Y): 0.11
• Revenue Growth: 16.87%
• EPS Growth: -65.89%
• Country: HK
• Employees: 581
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Care Facilities
• EPS (TTM): >-0.01
• Shares Outstanding: 1,000,000,000
• 10 Day Avg. Volume: 152,800
• 30 Day Avg. Volume: 102,283
• PEG Ratio: -0.33
• Price to Book (P/B): 1.08
• Price to Sales (P/S): 1.48
• P/FCF Ratio: 6.61
• 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: HK$0.50
• Price Target Upside: 6.38% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 60 Neutral
• Price Target: HK$0.50 ▲(6.38% Upside)

Kato (Hong Kong) Holdings Ltd. receives a moderate score of 60. The company's strong revenue growth and high gross profit margin are offset by declining net profit margins and cash flow challenges. The stock's technical indicators suggest it is overbought, and while the valuation is reasonable, the P/E ratio is on the higher side. The attractive dividend yield provides some support to the overall score.

Kato (Hong Kong) Holdings Ltd. Business Overview & Revenue Model

Company Description

Kato (Hong Kong) Holdings Limited, an investment holding company, engages in the provision of residential and day care services for the elderly in Hong Kong. The company provides a range of residential care services for the elderly, including accommodation, professional nursing and care-taking, nutritional management, medical, physiotherapy and occupational therapy, psychological and social care, individual care, and recreational services; and sells healthcare and medical goods, as well as offers add-on healthcare services to its residents. It also operates home care support services; and invests in properties, as well as provides properties management services. As of March 31, 2022, it operated eight care and attention homes for the elderly with 1,129 residential care places across four districts in Hong Kong under the Fai To, Kato, Happy Luck Home, Tsuen Wan Centre, and Pine Villa brand names. The company was founded in 1991 and is based in Tuen Mun, Hong Kong. Kato (Hong Kong) Holdings Limited is a subsidiary of Sheung Fung Limited.

How the Company Makes Money

Kato (Hong Kong) Holdings Ltd. generates revenue primarily through the sale and leasing of residential and commercial properties. Its core revenue streams include income from property sales, rental income from leased properties, and service fees from real estate management. The company also benefits from strategic partnerships with local contractors and suppliers, which help in reducing construction costs and improving project timelines. Additionally, Kato may engage in joint ventures or collaborations with other developers to expand its portfolio and enhance its market presence, thereby contributing to its overall earnings.

Kato (Hong Kong) Holdings Ltd. Financial Statement Overview

Summary

Kato (Hong Kong) Holdings Ltd. shows strong revenue growth and a high gross profit margin, but faces challenges with declining net profit margins and cash flow. Improved leverage is a positive, but lower return on equity indicates reduced profitability.

Income Statement

Kato (Hong Kong) Holdings Ltd. has shown a mixed performance in its income statement. The company achieved a strong gross profit margin of 93.61% in the latest year, indicating effective cost management. However, the net profit margin has decreased significantly from previous years, now at 6.90%, reflecting challenges in maintaining profitability. Revenue growth of 11.60% is a positive sign, but the decline in EBIT and EBITDA margins suggests pressure on operational efficiency.

Balance Sheet

The balance sheet of Kato (Hong Kong) Holdings Ltd. demonstrates moderate financial stability. The debt-to-equity ratio has improved to 0.76, indicating a reduction in leverage compared to previous years. However, the return on equity has decreased to 5.01%, suggesting lower profitability from shareholders' investments. The equity ratio remains stable, reflecting a balanced capital structure.

Cash Flow

Cash flow analysis reveals some concerns for Kato (Hong Kong) Holdings Ltd. The free cash flow growth rate has declined by 44.47%, indicating potential cash flow challenges. The operating cash flow to net income ratio is slightly above 1, showing adequate cash generation relative to net income. However, the free cash flow to net income ratio has decreased, suggesting reduced cash available for reinvestment or debt repayment.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	284.15M	317.11M	271.33M	408.30M	320.34M	256.53M
Gross Profit	143.09M	296.85M	135.21M	185.43M	143.75M	123.15M
EBITDA	75.11M	96.84M	133.61M	206.90M	161.67M	131.88M
Net Income	69.92M	21.88M	64.19M	126.15M	98.94M	79.87M
Balance Sheet
Total Assets	839.00M	809.57M	863.30M	699.30M	621.62M	602.60M
Cash, Cash Equivalents and Short-Term Investments	52.53M	52.66M	68.71M	78.53M	58.24M	109.12M
Total Debt	357.84M	332.96M	384.30M	270.03M	294.79M	342.05M
Total Liabilities	398.03M	367.34M	428.77M	326.36M	329.41M	369.44M
Stockholders Equity	440.89M	436.75M	434.29M	372.63M	291.53M	232.63M
Cash Flow
Free Cash Flow	128.06M	71.11M	108.10M	103.78M	42.00M	111.80M
Operating Cash Flow	103.75M	90.89M	132.42M	159.91M	118.98M	117.95M
Investing Cash Flow	-125.31M	9.29M	-236.10M	-55.89M	-75.39M	-105.33M
Financing Cash Flow	36.22M	-86.55M	69.67M	-84.02M	-93.67M	52.25M

Kato (Hong Kong) Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.47
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2189, the sentiment is Positive. The current price of 0.47 is above the 20-day moving average (MA) of 0.43, above the 50-day MA of 0.43, and above the 200-day MA of 0.44, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 91.29 is Negative, neither overbought nor oversold. The STOCH value of 65.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:2189.

Kato (Hong Kong) Holdings Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0722	78 Outperform	400.47M	12.56	0.00%	6.80%	-2.88%	-21.65%
3689	71 Outperform	658.76M	8.63	1.07%	8.12%	0.47%	50.46%
1518	64 Neutral	341.67M	-7.31	8.55%	3.16%	-21.31%	-149.92%
2189	60 Neutral	HK$470.00M	21.46	5.02%	4.26%	16.87%	-65.89%
1419	55 Neutral	379.55M	18.63	0.00%	2.80%	-0.69%	0.00%
3869	48 Neutral	939.72M	6.46	0.00%	―	2.30%	0.00%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Kato (Hong Kong) Holdings Ltd. Corporate Events

Kato Holdings Announces Successful AGM Resolutions

Kato (Hong Kong) Holdings Limited, a company incorporated in the Cayman Islands, announced the successful passing of all proposed resolutions during its Annual General Meeting held on September 10, 2025. The resolutions, which were approved by shareholders through a poll, included the adoption of audited financial statements, re-election of directors, approval of directors’ remuneration, declaration of a final dividend, reappointment of the company’s auditor, and granting of mandates to the directors for share issuance and repurchase. This outcome reflects strong shareholder support and positions the company for continued governance and operational activities in the upcoming year.

Kato (Hong Kong) Holdings Announces 2025 AGM and Key Resolutions

Kato (Hong Kong) Holdings Limited has announced its upcoming annual general meeting, scheduled for September 10, 2025, where shareholders will consider various resolutions including the adoption of financial statements, re-election of directors, and the declaration of a final dividend. The meeting will also address the re-appointment of PricewaterhouseCoopers as the company’s independent auditor and authorize the board to manage directors’ remuneration and the issuance of shares, impacting the company’s governance and shareholder value.

Kato Holdings Announces Changes to AGM and Dividend Schedule

Kato (Hong Kong) Holdings Ltd. has announced changes to the schedule of its annual general meeting (AGM), the proposed dividend payment date, and the closure of its register of members. The AGM, initially set for August 29, 2025, will now take place on September 10, 2025. Consequently, the dividend payment date has been moved from September 17, 2025, to September 29, 2025. These adjustments are crucial for shareholders as they affect the timing of dividend receipts and voting rights at the AGM.

Kato Holdings Announces Updated Final Dividend for FY2025

Kato (Hong Kong) Holdings Ltd. has announced an updated final cash dividend of HKD 0.02 per share for the financial year ending March 31, 2025. This update includes key dates such as the ex-dividend date on September 15, 2025, and the payment date on September 29, 2025, reflecting the company’s commitment to providing returns to its shareholders.

Kato Holdings Proposes Amendments to Articles of Association

Kato (Hong Kong) Holdings Limited has announced proposed amendments to its articles of association to align with changes in the Listing Rules and Cayman Islands laws. These amendments aim to enhance electronic communication, facilitate electronic and hybrid meetings, and improve corporate governance and operational flexibility. The company also plans to adopt a new set of articles incorporating these changes, which include provisions for electronic communication, hybrid meetings, management of treasury shares, and updates for clarity and consistency.

Kato Holdings Reports Revenue Growth but Decline in Profit for 2025

Kato (Hong Kong) Holdings Ltd. announced its annual results for the year ending March 31, 2025, reporting a total revenue of approximately HK$317.1 million, marking a 16.9% increase from the previous year. Despite the revenue growth, the company’s profit attributable to owners decreased by 65.9% to approximately HK$21.9 million. The board recommended a final dividend of HK2.0 cents per share, pending shareholder approval. The results reflect a challenging year with increased expenses across several categories, impacting overall profitability.

Kato Holdings Declares Final Dividend for 2025

Kato (Hong Kong) Holdings Limited has announced a final ordinary cash dividend of HKD 0.02 per share for the financial year ending March 31, 2025. This announcement, made on June 23, 2025, outlines key dates including the ex-dividend date on September 3, 2025, and the payment date on September 17, 2025. The dividend decision reflects the company’s financial performance and commitment to returning value to its shareholders.

Kato Holdings Enhances Board Governance with New Nomination Committee

Kato (Hong Kong) Holdings Ltd. has announced the adoption of terms of reference for its Nomination Committee, which is part of its board of directors. The committee will consist of at least three members, primarily independent non-executive directors, with a focus on diversity by including at least one member of a different gender. This move is expected to enhance the governance structure and ensure a diverse and independent oversight within the company’s board operations.

Kato Holdings Issues Profit Warning Amidst Decline in Property Values

Kato (Hong Kong) Holdings Limited has issued a profit warning, indicating a significant decrease in profit for the year ending March 31, 2025. The expected profit is not less than HK$18.0 million, a sharp decline from the previous year’s HK$64.2 million, primarily due to a fair value loss on investment properties. This announcement suggests potential challenges for the company and advises shareholders and potential investors to exercise caution.