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

• Market Cap: HK$450.00M
• Dividend Yield: 11.11%
• Average Volume (3M): 56.30K
• Price to Earnings (P/E): 20.5
• Beta (1Y): 0.12
• Revenue Growth: -15.22%
• EPS Growth: -21.37%
• Country: HK
• Employees: 581
• Sector: Healthcare
• Sector Strength: 37
• Industry: Medical - Care Facilities
• EPS (TTM): >-0.01
• Shares Outstanding: 1,000,000,000
• 10 Day Avg. Volume: 55,600
• 30 Day Avg. Volume: 56,305
• PEG Ratio: 0.71
• Price to Book (P/B): 1.02
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 3.51
• 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: 64 Neutral
• Price Target: ―

Kato (Hong Kong) Holdings Ltd. displays strong financial fundamentals with robust profitability and solid cash flow management, contributing positively to its score. However, the technical analysis suggests bearish momentum, acting as a drag on the overall score. The valuation appears favorable with a low P/E ratio and high dividend yield, enhancing the attractiveness of the stock. Despite the revenue decline, the company's financial health supports its resilience.

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 operation of its residential care homes for the elderly. The company charges fees for various services provided to residents, including room and board, personal care, and specialized nursing services. In addition to basic care services, Kato Holdings may also offer ancillary services such as physiotherapy, recreational activities, and medical consultations, which contribute additional revenue streams. The company's earnings are significantly influenced by occupancy rates in its facilities, the quality and range of services offered, and its ability to maintain a trusted reputation in the community. Kato Holdings may also benefit from partnerships with healthcare providers and government agencies supporting elderly care initiatives.

Kato (Hong Kong) Holdings Ltd. Financial Statement Overview

Summary

Kato (Hong Kong) Holdings Ltd. demonstrates strong profitability and efficient cash flow management. While revenue has decreased, profit margins and cash flow stability provide a solid financial position. The balance sheet remains healthy, with a balanced debt-to-equity ratio and high return on equity. Despite the current revenue challenges, the company is positioned well with its strong financial fundamentals.

Income Statement

The company has shown a decrease in revenue from HK$408.3M to HK$271.3M, reflecting a negative revenue growth rate. However, gross and net profit margins remain robust at 49.8% and 23.7%, respectively, indicating efficient cost management. EBIT and EBITDA margins are also strong at 43.1% and 49.2%, demonstrating operational efficiency. Despite the revenue decline, profitability metrics are solid.

Balance Sheet

The debt-to-equity ratio stands at 0.88, indicating a moderate level of leverage, while the equity ratio at 50.3% suggests a stable capital structure. Return on Equity (ROE) is strong at 14.8%, reflecting efficient use of equity capital. Overall, the balance sheet is healthy, with manageable debt levels and solid equity backing.

Cash Flow

The company has maintained a positive operating cash flow to net income ratio of 2.06, indicating good cash generation relative to net income. Free cash flow growth is positive at 4.2%, and the free cash flow to net income ratio is 1.68, highlighting effective cash flow management. Cash flow stability supports operational and financial flexibility.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	284.15M	271.33M	408.30M	320.34M	256.53M	196.10M
Gross Profit	143.09M	135.21M	185.43M	143.75M	123.15M	85.16M
EBITDA	75.11M	133.61M	206.90M	161.67M	131.88M	90.90M
Net Income	69.92M	64.19M	126.15M	98.94M	79.87M	47.87M
Balance Sheet
Total Assets	839.00M	863.30M	699.30M	621.62M	602.60M	348.87M
Cash, Cash Equivalents and Short-Term Investments	52.53M	68.71M	78.53M	58.24M	109.12M	183.74M
Total Debt	357.84M	384.30M	270.03M	294.79M	342.05M	138.26M
Total Liabilities	398.03M	428.77M	326.36M	329.41M	369.44M	156.20M
Stockholders Equity	440.89M	434.29M	372.63M	291.53M	232.63M	192.67M
Cash Flow
Free Cash Flow	128.06M	108.10M	103.78M	42.00M	111.80M	64.15M
Operating Cash Flow	103.75M	132.42M	159.91M	118.98M	117.95M	74.26M
Investing Cash Flow	-125.31M	-236.10M	-55.89M	-75.39M	-105.33M	-150.61M
Financing Cash Flow	29.94M	69.67M	-84.02M	-93.67M	52.25M	71.50M

Kato (Hong Kong) Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.45
• 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:2189, the sentiment is Negative. The current price of 0.45 is below the 20-day moving average (MA) of 0.45, below the 50-day MA of 0.46, and below the 200-day MA of 0.48, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 37.74 is Neutral, neither overbought nor oversold. The STOCH value of 16.67 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	75 Outperform	HK$368.44M	8.57	5.95%	12.17%	0.81%	27.55%
2189	64 Neutral	HK$450.00M	20.55	5.02%	11.11%	-15.22%	-21.37%
3689	64 Neutral	HK$598.57M	36.02	1.07%	8.94%	-1.20%	-87.51%
1518	59 Neutral	HK$405.12M	7.81	8.82%	2.66%	-10.82%	-44.11%
1419	58 Neutral	HK$318.82M	15.19	2.73%	3.33%	-0.69%	―
Sector *	52 Neutral	$7.52B	0.21	-63.76%	2.30%	16.15%	0.89%
3869	48 Neutral	HK$718.61M	―	-10.78%	―	-0.95%	-128.35%

Kato (Hong Kong) Holdings Ltd. Corporate Events

Kato Holdings Secures Unanimous Approval for Tenancy Renewals

Kato (Hong Kong) Holdings Limited announced that all proposed resolutions were unanimously approved by independent shareholders during an Extraordinary General Meeting held on February 19, 2025. The resolutions pertained to the renewal of various tenancy agreements related to the company’s operations. This approval ensures the continuity of Kato’s facilities and is a crucial step for maintaining its operational stability and strategic positioning in the market.