Watts International Maritime Engineering Ltd. (2258) AI Stock Analysis

• Market Cap: HK$180.18M
• Dividend Yield: 4.64%
• Average Volume (3M): 170.85K
• Price to Earnings (P/E): 2.4
• Beta (1Y): 0.52
• Revenue Growth: -13.98%
• EPS Growth: N/A
• Country: HK
• Employees: 472
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Infrastructure Operations
• EPS (TTM): 0.02
• Shares Outstanding: 825,400,000
• 10 Day Avg. Volume: 70,800
• 30 Day Avg. Volume: 170,853
• PEG Ratio: <0.01
• Price to Book (P/B): 0.22
• Price to Sales (P/S): 0.10
• P/FCF Ratio: -10.86
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: HK$0.50 ▲(127.27% Upside)

The overall stock score is driven by a strong valuation and positive technical indicators, suggesting potential upside. However, significant financial performance challenges, particularly in revenue and cash flow, pose risks to sustaining operations and growth.

Positive Factors

Business Model Diversification

Watts International's diversified revenue streams from construction, services, and partnerships help mitigate risks and ensure steady cash flow.

Partnerships and Innovation

Collaborations with technology providers strengthen Watts International's competitive position by enhancing innovation and expanding capabilities.

Manageable Leverage

A reasonable debt-to-equity ratio suggests Watts International maintains financial flexibility, supporting long-term stability and growth potential.

Negative Factors

Declining Revenue and Profitability

The decline in revenue and profitability indicates challenges in market competitiveness and cost management, potentially affecting long-term growth.

Negative Operating Cash Flow

Negative operating cash flow suggests difficulties in converting earnings into cash, limiting investment in growth opportunities and debt servicing.

Asset and Equity Decreases

Decreases in assets and equity may pressure financial health, impacting Watts International's ability to sustain operations and invest in growth.

Watts International Maritime Engineering Ltd. Business Overview & Revenue Model

Company Description

Watts International Maritime Company Limited, an investment holding company, operates as a port, waterway, and marine and municipal public engineering services provider in the People's Republic of China. It operates through two segments, Marine Construction and Municipal Public Construction. The Marine Construction segment includes infrastructure construction of ports, waterway engineering, and other services. The Municipal Public Construction segment engages in the construction of public infrastructure within cities, urban greening, and construction of buildings. The company was formerly known as Watts International Maritime Engineering Limited and changed its name to Watts International Maritime Company Limited in January 2022. Watts International Maritime Company Limited was incorporated in 2017 and is headquartered in Shanghai, the People's Republic of China.

How the Company Makes Money

Watts International Maritime Engineering Ltd. generates revenue through multiple key streams. Primarily, the company earns income from the construction and sale of ships and offshore platforms, which involves substantial contracts with government and private sector clients. Additionally, it provides engineering services, including consultancy and maintenance support, which contribute to its service revenue. The company also benefits from partnerships with technology providers, enhancing its product offerings and capabilities. These collaborations often lead to joint ventures and shared projects, further diversifying its income sources. Furthermore, ongoing contracts for maintenance and retrofitting services ensure a steady cash flow, making them a significant aspect of the company's overall earnings strategy.

Watts International Maritime Engineering Ltd. Financial Statement Overview

Summary

The company faces significant challenges with declining revenue and profitability, impacting its income statement score. The balance sheet shows moderate stability but highlights concerns about asset and equity decreases. Cash flow issues persist, with negative operating cash flow creating potential liquidity concerns.

Income Statement

The income statement shows a concerning trend with a significant decline in revenue and profitability. The gross profit margin decreased from previous years, and the company reported a net loss for 2024. The negative revenue growth and declining profit margins indicate potential challenges in maintaining competitiveness and managing costs.

Balance Sheet

The balance sheet reveals moderate financial stability. The debt-to-equity ratio remains reasonable, indicating manageable leverage levels. However, the declining stockholders' equity and a decrease in total assets suggest potential pressure on the company's financial health. The equity ratio is stable, but there are concerns about the company's ability to generate sufficient returns on equity.

Cash Flow

Cash flow analysis highlights challenges in generating positive operating cash flow, with the company consistently reporting negative figures in recent years. Although free cash flow has improved slightly, the operating cash flow to net income ratio remains unfavorable, reflecting difficulties in converting earnings into cash. This could impact the company's ability to invest in growth opportunities or service its debt.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.57B	1.53B	2.14B	2.08B	2.26B	1.82B
Gross Profit	104.12M	98.54M	173.57M	171.13M	207.77M	202.64M
EBITDA	85.07M	-29.51M	89.98M	85.14M	93.51M	102.01M
Net Income	70.32M	-69.25M	30.75M	27.10M	47.06M	46.84M
Balance Sheet
Total Assets	3.30B	3.35B	3.24B	3.44B	3.34B	3.43B
Cash, Cash Equivalents and Short-Term Investments	371.37M	342.66M	257.58M	541.48M	443.83M	423.75M
Total Debt	352.55M	280.83M	207.08M	250.41M	129.44M	60.59M
Total Liabilities	2.59B	2.65B	2.49B	2.71B	2.63B	2.77B
Stockholders Equity	710.48M	696.92M	752.10M	731.67M	703.36M	663.72M
Cash Flow
Free Cash Flow	76.13M	-14.17M	-231.75M	11.80M	-23.09M	19.34M
Operating Cash Flow	82.28M	-10.06M	-224.08M	19.88M	-14.50M	32.56M
Investing Cash Flow	-437.00K	40.92M	2.61M	-31.99M	-20.78M	-32.74M
Financing Cash Flow	17.77M	55.75M	-63.21M	101.51M	59.10M	-38.25M

Watts International Maritime Engineering Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 0.22
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2258, the sentiment is Neutral. The current price of 0.22 is below the 20-day moving average (MA) of 0.22, above the 50-day MA of 0.22, and above the 200-day MA of 0.20, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 50.10 is Neutral, neither overbought nor oversold. The STOCH value of 93.33 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:2258.

Watts International Maritime Engineering Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8502	73 Outperform	HK$240.00M	4.05	10.04%	―	0.89%	-3.77%
1785	72 Outperform	HK$3.43B	6.42	10.26%	5.25%	3.78%	-17.34%
2258	64 Neutral	HK$180.18M	2.37	10.40%	4.64%	-13.98%	―
1576	64 Neutral	HK$3.62B	7.68	10.92%	6.05%	-21.80%	-8.00%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
1823	54 Neutral	HK$474.50M	-9.88	-5.81%	―	-44.12%	-3110.53%
6888	49 Neutral	HK$149.21M	33.41	0.63%	―	-78.51%	388.89%

Watts International Maritime Engineering Ltd. Corporate Events

Watts International Renews Construction Services Agreement with Watts Gallop

Watts International Maritime Engineering Ltd. has announced the renewal of its Master Construction Services Agreement with Watts Gallop, effective from January 1, 2026, to December 31, 2028. This agreement allows Watts International to continue providing engineering construction services to Watts Gallop Group, with pricing determined by expected gross profit margins compared to recent similar projects. The agreement’s execution is contingent upon approval by independent shareholders, highlighting the company’s ongoing commitment to maintaining competitive service terms.

Watts International Enhances Governance with New Nomination Committee

Watts International Maritime Engineering Ltd. has established a Nomination Committee as per a resolution passed by its Board of Directors. The committee, which will consist of at least three members, primarily independent non-executive directors, aims to enhance governance by ensuring diverse representation, including at least one director of a different gender. This move is expected to strengthen the company’s governance structure, potentially improving its industry positioning and stakeholder confidence.

Watts International Announces Board Changes with New Executive Director Appointment

Watts International Maritime Engineering Ltd. announced a significant change in its board composition, appointing Ms. Wang Lifang as an executive director and a member of the nomination committee, effective December 1, 2025. This appointment follows the resignation of Mr. Wang Shizhong as a non-executive director. Ms. Wang brings extensive experience from her roles in related companies and holds a significant shareholding in the company. The board welcomes her appointment, which is expected to strengthen the company’s leadership and potentially influence its strategic direction.

Watts International Maritime Engineering Ltd. Announces Board Composition and Roles

Watts International Maritime Engineering Ltd. has announced the composition of its Board of Directors and the roles and functions of its members. The board includes both executive and independent non-executive directors, with specific members assigned to the Audit, Remuneration, and Nomination committees. This announcement is significant as it outlines the governance structure of the company, which is crucial for stakeholders to understand the leadership and decision-making processes within the organization.

Watts International Maritime Engineering Ltd. Updates Share Award Scheme Details

Watts International Maritime Engineering Ltd. has issued a supplemental announcement regarding its Share Award Scheme, which is part of its 2024 Annual Report. The scheme is designed to reward individuals who contribute to the company, including employees, directors, officers, and service providers. The announcement clarifies eligibility criteria for participation in the scheme, emphasizing compliance with local laws and regulations. This move is likely aimed at enhancing employee motivation and aligning interests with the company’s growth objectives.