WK Group (Holdings) Limited (2535) AI Stock Analysis

• Market Cap: HK$2.04B
• Dividend Yield: N/A
• Average Volume (3M): 5.67M
• Price to Earnings (P/E): 70.3
• Beta (1Y): 0.16
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: HK
• Employees: 137
• Sector: Industrials
• Sector Strength: 72
• Industry: Manufacturing - Metal Fabrication
• EPS (TTM): <0.01
• Shares Outstanding: 2,000,000,000
• 10 Day Avg. Volume: 3,798,000
• 30 Day Avg. Volume: 5,669,000
• PEG Ratio: 1.21
• Price to Book (P/B): 4.67
• Price to Sales (P/S): 2.97
• P/FCF Ratio: 153.43
• 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: 68 Neutral
• Price Target: HK$1.00 ▲(78.57% Upside)

The overall stock score is driven by strong financial performance and positive technical indicators. However, the high P/E ratio suggests potential overvaluation, and liquidity concerns due to negative cash flows pose a risk. The absence of earnings call and corporate events data limits further insights.

Positive Factors

Revenue Growth

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

Profitability Margins

Stable and improving profit margins reflect efficient cost management and pricing strategies, enhancing the company's financial health and competitiveness.

Low Leverage

Low leverage reduces financial risk and interest burden, providing the company with greater flexibility to invest in growth opportunities and weather economic downturns.

Negative Factors

Liquidity Concerns

Negative cash flows highlight liquidity challenges, potentially limiting the company's ability to fund operations and invest in growth without external financing.

Cash and Short-term Investments

A decrease in cash reserves can strain the company's ability to meet short-term obligations and invest in strategic initiatives, impacting operational flexibility.

Cash Generation Ability

Inadequate cash generation compared to net income suggests potential issues in converting earnings into cash, which can affect the company's financial sustainability.

WK Group (Holdings) Limited Business Overview & Revenue Model

Company Description

WK Group (Holdings) Limited (2535) is a diversified investment holding company based in Hong Kong, primarily engaged in the manufacturing and distribution of a range of products including industrial machinery, consumer electronics, and construction materials. The company operates across multiple sectors, focusing on innovation and quality to meet the demands of its clients in various industries. WK Group also invests in strategic partnerships and joint ventures to enhance its market presence and product offerings.

How the Company Makes Money

WK Group generates revenue through multiple streams, primarily from the sale of its manufactured products, which include industrial machinery and consumer electronics. The company also earns income from its construction materials division, where it supplies essential materials for various construction projects. Additionally, WK Group benefits from strategic partnerships and joint ventures that enable it to access new markets and technologies, thereby enhancing its product portfolio and driving sales. The company may also engage in service contracts related to its machinery and equipment, providing after-sales services and maintenance, which further contributes to its revenue.

WK Group (Holdings) Limited Financial Statement Overview

Summary

The company demonstrates strong revenue growth and efficient profitability margins, with low leverage enhancing financial stability. However, liquidity concerns arise from negative cash flow trends, necessitating a focus on cash generation.

Income Statement

The company exhibits a strong revenue growth trajectory with a 7.63% increase in the latest year. Gross profit margin is stable at approximately 18%, and net profit margin improved to 7.91%, indicating efficient cost management. EBIT and EBITDA margins are healthy at 9.94% and 11.76%, respectively, showcasing operational efficiency.

Balance Sheet

The balance sheet is robust with a debt-to-equity ratio of 0.05, indicating low leverage. Return on Equity (ROE) is strong at 12.43%, reflecting effective use of equity. The equity ratio stands at 80.89%, signifying a solid asset base backed by equity, though there is a slight concern with the decrease in cash and short-term investments year on year.

Cash Flow

The cash flow statement highlights volatility with negative operating and free cash flows in the latest year, posing a potential liquidity risk. The operating cash flow to net income ratio is not available, emphasizing the need for improved cash generation to support operational and investment activities.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	392.27M	398.46M	370.23M	336.38M	228.78M	324.29M
Gross Profit	64.35M	71.39M	70.90M	66.04M	34.54M	54.05M
EBITDA	38.22M	48.09M	40.12M	52.28M	26.59M	48.62M
Net Income	28.93M	31.50M	25.20M	39.27M	17.34M	36.71M
Balance Sheet
Total Assets	311.61M	313.31M	257.06M	201.38M	154.10M	166.41M
Cash, Cash Equivalents and Short-Term Investments	121.16M	109.50M	11.01M	72.64M	11.73M	14.54M
Total Debt	12.46M	12.75M	12.89M	19.18M	7.32M	16.87M
Total Liabilities	47.67M	59.92M	120.83M	70.79M	56.26M	85.27M
Stockholders Equity	263.94M	253.38M	136.23M	130.59M	97.84M	81.14M
Cash Flow
Free Cash Flow	-5.32M	7.71M	-24.39M	78.45M	9.99M	4.58M
Operating Cash Flow	10.46M	24.75M	-22.97M	78.76M	11.12M	8.25M
Investing Cash Flow	7.66M	-31.31M	-4.18M	-6.62M	-1.17M	-4.20M
Financing Cash Flow	0.00	97.72M	-32.87M	-15.10M	-12.78M	-7.92M

WK Group (Holdings) Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.56
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2535, the sentiment is Positive. The current price of 0.56 is below the 20-day moving average (MA) of 0.91, below the 50-day MA of 0.93, and below the 200-day MA of 0.66, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 62.02 is Neutral, neither overbought nor oversold. The STOCH value of 81.16 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:2535.

WK Group (Holdings) Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2535	68 Neutral	HK$2.04B	70.34	11.59%	―	―	―
1891	65 Neutral	HK$148.00M	3.73	9.55%	―	1.65%	35.96%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
3816	60 Neutral	HK$276.00M	6.22	7.82%	2.71%	28.78%	185.71%
8027	56 Neutral	HK$29.84M	-2.72	-15.00%	―	47.69%	-101.74%
0822	50 Neutral	HK$335.16M	-6.63	-4.46%	―	10.91%	11.01%

WK Group (Holdings) Limited Corporate Events

WK Group Announces Change of Auditor Amid Cost Concerns

WK Group (Holdings) Limited announced the resignation of PricewaterhouseCoopers as its auditor due to a disagreement over audit fees. The company has appointed OOP CPA & Co. as the new auditor, citing their competitive fees and expertise. This change is not expected to significantly impact the company’s annual audit or financial results, and it aligns with the company’s cost control measures.

The most recent analyst rating on (HK:2535) stock is a Hold with a HK$1.00 price target. To see the full list of analyst forecasts on WK Group (Holdings) Limited stock, see the HK:2535 Stock Forecast page.