Rego Interactive Co., Ltd. (2422) AI Stock Analysis

• Market Cap: HK$780.00M
• Dividend Yield: N/A
• Average Volume (3M): 554.40K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.03
• Revenue Growth: 10.61%
• EPS Growth: -1448.48%
• Country: HK
• Employees: 311
• Sector: Communication Services
• Sector Strength: 97
• Industry: Advertising Agencies
• EPS (TTM): -0.01
• Shares Outstanding: 1,500,000,000
• 10 Day Avg. Volume: 765,000
• 30 Day Avg. Volume: 554,400
• PEG Ratio: 0.10
• Price to Book (P/B): 3.57
• Price to Sales (P/S): 5.25
• P/FCF Ratio: -94.01
• 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: 54 Neutral
• Price Target: HK$0.50 ▼(-3.85% Downside)

The overall stock score is primarily influenced by the company's financial performance challenges and valuation concerns. While technical analysis shows strong momentum, the overbought indicators and lack of earnings call data or corporate events limit the potential upside.

Positive Factors

Revenue Growth

The company has shown a revenue growth rate of over 10%, indicating a positive trend in market expansion and product adoption, which is crucial for long-term sustainability in the competitive tech industry.

Business Model

The freemium model allows for broad user acquisition with potential for monetization through in-game purchases, providing a scalable revenue stream that can adapt to market demands.

Partnerships

Strategic partnerships enhance service offerings and market reach, fostering innovation and potentially leading to new revenue streams, strengthening the company's competitive position.

Negative Factors

Profitability Challenges

The negative net profit margin and declining gross profit margin highlight ongoing profitability challenges, which may affect the company's ability to reinvest in growth and innovation.

Cash Flow Volatility

Volatile cash flow generation limits financial flexibility and could hinder the company's ability to fund operations and strategic initiatives, posing a risk to long-term stability.

Operational Inefficiencies

Negative EBIT and EBITDA margins indicate operational inefficiencies, which can erode competitive advantage and reduce the company's ability to sustain growth in the long term.

Rego Interactive Co., Ltd. Business Overview & Revenue Model

Company Description

Rego Interactive Co., Ltd. (2422) is a technology-focused company that specializes in providing innovative digital solutions and services across various sectors, including software development, mobile applications, and digital marketing. The company aims to enhance user engagement and streamline business processes through its core offerings, which include custom software solutions, e-commerce platforms, and enterprise resource planning (ERP) systems.

How the Company Makes Money

Rego Interactive generates revenue primarily through the sale of its software and digital solutions to businesses across different industries. Key revenue streams include licensing fees from proprietary software, subscription fees for cloud-based services, and project-based income from custom development projects. Additionally, the company may have partnerships with other technology firms, enabling it to offer integrated solutions and enhance its service offerings, contributing to its overall earnings. The focus on recurring revenue models, such as Software as a Service (SaaS), also provides a stable income stream as clients subscribe to ongoing services and support.

Rego Interactive Co., Ltd. Financial Statement Overview

Summary

Rego Interactive Co., Ltd. faces significant financial challenges, particularly in terms of profitability and cash flow generation. The income statement and cash flow metrics highlight operational inefficiencies and cash management issues, although the balance sheet remains relatively stable.

Income Statement

Rego Interactive Co., Ltd. has experienced a volatile revenue trajectory, with a recent decline in revenue and profitability. The gross profit margin has decreased significantly, and the company reported a negative net profit margin in the latest year, indicating challenges in maintaining profitability. The EBIT and EBITDA margins have also turned negative, reflecting operational inefficiencies.

Balance Sheet

The company's balance sheet shows a relatively stable equity position with a debt-to-equity ratio that remains manageable. However, the decline in stockholders' equity and total assets over the years raises concerns about asset management and financial stability. The equity ratio remains healthy, indicating a strong equity base relative to total assets.

Cash Flow

Cash flow analysis reveals inconsistent free cash flow generation, with recent periods showing negative free cash flow. The operating cash flow to net income ratio has improved but remains volatile. The company's ability to convert net income into cash flow is a concern, impacting its financial flexibility.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	264.21M	244.65M	191.06M	256.59M	219.55M	113.04M
Gross Profit	45.88M	65.81M	101.67M	133.46M	110.21M	75.87M
EBITDA	-51.60M	-27.39M	24.22M	84.77M	69.04M	50.20M
Net Income	-61.06M	-37.96M	12.56M	68.50M	49.98M	45.78M
Balance Sheet
Total Assets	599.59M	531.95M	637.38M	399.70M	235.06M	154.31M
Cash, Cash Equivalents and Short-Term Investments	103.67M	138.99M	186.48M	186.85M	61.48M	32.06M
Total Debt	114.32M	94.05M	156.35M	38.35M	21.10M	10.38M
Total Liabilities	263.16M	173.16M	244.73M	102.24M	129.16M	51.66M
Stockholders Equity	338.43M	359.62M	392.66M	297.46M	105.90M	102.65M
Cash Flow
Free Cash Flow	47.57M	-13.65M	-80.46M	-9.51M	24.28M	7.20M
Operating Cash Flow	74.17M	14.33M	-77.74M	-7.18M	26.59M	15.96M
Investing Cash Flow	17.63M	5.86M	-100.82M	-2.33M	-7.22M	-21.52M
Financing Cash Flow	-71.71M	-67.68M	178.19M	134.88M	10.05M	-4.72M

Rego Interactive Co., Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.52
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2422, the sentiment is Positive. The current price of 0.52 is below the 20-day moving average (MA) of 0.59, below the 50-day MA of 0.60, and above the 200-day MA of 0.46, indicating a neutral trend. The MACD of -0.03 indicates Positive momentum. The RSI at 43.29 is Neutral, neither overbought nor oversold. The STOCH value of 22.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:2422.

Rego Interactive Co., Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9919	71 Outperform	HK$781.98M	8.56	26.71%	8.86%	-9.72%	-13.36%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
2422	54 Neutral	HK$780.00M	-12.13	-16.52%	―	10.61%	-1448.48%
0205	49 Neutral	HK$700.68M	-50.00	-6.02%	―	-4.13%	76.38%
1753	45 Neutral	HK$239.05M	-4.64	-3.55%	―	-5.89%	-330.91%
1917	43 Neutral	HK$296.45M	-19.57	-31.88%	―	-5.03%	-35.29%
1993	39 Underperform	HK$277.33M	-5.39	―	―	-38.24%	-31.99%

Rego Interactive Co., Ltd. Corporate Events

Rego Interactive Redirects Rights Issue Proceeds to Working Capital

Rego Interactive Co., Ltd. announced a change in the use of proceeds from its recent rights issue, which initially aimed to fund an acquisition, expand its goods delivery business, and support general working capital. The company has decided to reallocate the remaining proceeds of approximately HK$47.8 million entirely to general working capital due to the acquisition project not proceeding as planned. This strategic shift reflects a reassessment of the company’s operational priorities and financial strategy, potentially impacting its market positioning and stakeholder interests.