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

• Market Cap: HK$450.00M
• Dividend Yield: 4.49%
• Average Volume (3M): 297.35K
• Price to Earnings (P/E): 19.4
• Beta (1Y): 0.10
• Revenue Growth: 20.85%
• EPS Growth: -66.81%
• Country: HK
• Employees: 581
• Sector: Healthcare
• Sector Strength: 45
• Industry: Medical - Care Facilities
• EPS (TTM): 0.03
• Shares Outstanding: 1,000,000,000
• 10 Day Avg. Volume: 72,800
• 30 Day Avg. Volume: 297,350
• 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: 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: 65 Neutral
• Price Target: HK$0.50 ▲(11.11% Upside)

Kato (Hong Kong) Holdings Ltd. presents a mixed investment case. Strong revenue growth and a high gross profit margin are offset by declining net profit margins and cash flow challenges. Technical indicators suggest a neutral trend, while the valuation is moderate with a reasonable P/E ratio and attractive dividend yield. The absence of earnings call and corporate events data limits further insights.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective sales strategies, supporting long-term business expansion and stability.

Gross Profit Margin

A high gross profit margin reflects efficient cost management, allowing the company to maintain profitability and invest in growth opportunities.

Improved Leverage

Reduced leverage enhances financial stability, providing more flexibility for future investments and reducing risk associated with debt obligations.

Negative Factors

Declining Net Profit Margin

A declining net profit margin indicates challenges in maintaining profitability, which could impact long-term financial health and shareholder returns.

Cash Flow Challenges

Reduced free cash flow growth limits the company's ability to reinvest in the business, repay debt, or distribute dividends, affecting future growth prospects.

Lower Return on Equity

A lower return on equity suggests reduced profitability from shareholders' investments, potentially impacting investor confidence and capital attraction.

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 issues. 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	317.11M	317.11M	271.33M	408.30M	320.34M	256.53M
Gross Profit	126.54M	296.85M	135.21M	185.43M	143.75M	123.15M
EBITDA	101.67M	96.84M	133.61M	206.90M	161.67M	131.88M
Net Income	21.88M	21.88M	64.19M	126.15M	98.94M	79.87M
Balance Sheet
Total Assets	809.57M	809.57M	863.30M	699.30M	621.62M	602.60M
Cash, Cash Equivalents and Short-Term Investments	52.66M	52.66M	68.71M	78.53M	58.24M	109.12M
Total Debt	332.96M	332.96M	384.30M	270.03M	294.79M	342.05M
Total Liabilities	367.34M	367.34M	428.77M	326.36M	329.41M	369.44M
Stockholders Equity	436.75M	436.75M	434.29M	372.63M	291.53M	232.63M
Cash Flow
Free Cash Flow	71.11M	71.11M	108.10M	103.78M	42.00M	111.80M
Operating Cash Flow	90.89M	90.89M	132.42M	159.91M	118.98M	117.95M
Investing Cash Flow	15.70M	9.29M	-236.10M	-55.89M	-75.39M	-105.33M
Financing Cash Flow	-80.73M	-86.55M	69.67M	-84.02M	-93.67M	52.25M

Kato (Hong Kong) Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.45
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• 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 0.45 is above the 20-day moving average (MA) of 0.45, above the 50-day MA of 0.44, and above the 200-day MA of 0.44, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 62.28 is Neutral, neither overbought nor oversold. The STOCH value of 66.67 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	HK$380.45M	11.93	4.28%	7.10%	-2.88%	-22.83%
3689	71 Outperform	HK$601.91M	7.29	5.33%	9.14%	0.47%	50.46%
2189	65 Neutral	HK$450.00M	19.40	5.24%	4.49%	20.85%	-66.81%
3869	56 Neutral	HK$801.53M	5.51	30.40%	―	2.30%	―
1419	55 Neutral	HK$311.23M	11.82	3.40%	3.75%	9.07%	8.95%
1518	54 Neutral	HK$322.15M	-6.90	-8.40%	3.16%	-21.31%	-149.92%
Sector *	51 Neutral	$7.86B	-0.30	-43.30%	2.27%	22.53%	-2.21%

Kato (Hong Kong) Holdings Ltd. Corporate Events

Kato Holdings Reports Revenue and Profit Growth for H1 2025

Kato (Hong Kong) Holdings Limited reported a significant financial performance for the six months ending September 30, 2025, with a 17.8% increase in revenue to approximately HK$174.2 million and a 5.1% rise in profit attributable to owners, amounting to HK$27.0 million. Despite the growth, the Board decided not to recommend an interim dividend, indicating a strategic decision to potentially reinvest profits into the business, which could impact future growth and stakeholder expectations.

The most recent analyst rating on (HK:2189) stock is a Hold with a HK$0.50 price target. To see the full list of analyst forecasts on Kato (Hong Kong) Holdings Ltd. stock, see the HK:2189 Stock Forecast page.

Kato Holdings Schedules Board Meeting to Review Interim Results

Kato (Hong Kong) Holdings Limited has announced a board meeting scheduled for November 27, 2025, to consider and approve the unaudited interim results for the six months ending September 30, 2025. The meeting will also discuss the potential payment of an interim dividend, which could impact shareholder returns and reflect the company’s financial health.

The most recent analyst rating on (HK:2189) stock is a Hold with a HK$0.50 price target. To see the full list of analyst forecasts on Kato (Hong Kong) Holdings Ltd. stock, see the HK:2189 Stock Forecast page.