Perennial Energy Holdings Ltd. (2798) AI Stock Analysis

• Market Cap: HK$1.92B
• Dividend Yield: 4.17%
• Average Volume (3M): 1.15M
• Price to Earnings (P/E): 9.5
• Beta (1Y): 0.50
• Revenue Growth: -26.28%
• EPS Growth: -69.55%
• Country: HK
• Employees: 3,699
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Coal
• EPS (TTM): <0.01
• Shares Outstanding: 1,600,000,000
• 10 Day Avg. Volume: 1,331,500
• 30 Day Avg. Volume: 1,145,723
• PEG Ratio: -0.26
• Price to Book (P/B): 0.45
• Price to Sales (P/S): 0.83
• P/FCF Ratio: -1.79
• 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: 69 Neutral
• Price Target: HK$1.50 ▲(27.12% Upside)

Perennial Energy Holdings Ltd. has a stable financial structure with strong margins but faces challenges in profitability and cash flow. The technical analysis indicates bullish momentum, though caution is advised due to overbought signals. The stock's valuation is attractive, with a low P/E ratio and high dividend yield, enhancing its appeal despite liquidity concerns.

Positive Factors

Strong Balance Sheet

A strong balance sheet with high equity and manageable debt provides financial stability and resilience against market fluctuations.

Sustainable Business Model

Focus on renewable energy aligns with global sustainability trends, positioning the company for long-term growth and regulatory support.

Strategic Partnerships

Partnerships enhance project opportunities and profitability, providing a competitive edge in the energy sector.

Negative Factors

Negative Cash Flow

Negative cash flow from operations indicates potential liquidity issues, which could affect the company's ability to fund projects and operations.

Declining Profitability

Decreasing profitability suggests challenges in maintaining cost efficiency and could impact future earnings potential.

Revenue Decline

Negative revenue growth indicates challenges in sales expansion, which could hinder long-term growth prospects.

Perennial Energy Holdings Ltd. Business Overview & Revenue Model

Company Description

Perennial Energy Holdings Ltd. (2798) is a leading energy company based in Singapore, specializing in the development, investment, and management of energy-related projects across the Asia-Pacific region. The company operates primarily in the renewable energy and conventional power sectors, focusing on sustainable solutions that contribute to energy efficiency and environmental sustainability. Core products and services include the generation of electricity from renewable sources such as solar and wind, as well as investments in energy infrastructure and technology.

How the Company Makes Money

Perennial Energy Holdings Ltd. generates revenue primarily through the sale of electricity produced from its renewable energy projects. This includes power purchase agreements (PPAs) with utility companies and large industrial clients, which provide a steady stream of income. Additionally, the company earns revenue from investments in energy infrastructure, including joint ventures and partnerships with other energy firms. Key revenue streams include operating renewable energy plants, selling carbon credits from sustainable practices, and potential government incentives for renewable energy production. Strategic partnerships with local governments and energy companies also bolster its position in the market, allowing for expanded project opportunities and enhanced profitability.

Perennial Energy Holdings Ltd. Financial Statement Overview

Summary

Perennial Energy Holdings Ltd. has a mixed financial performance. The income statement shows strong margins but declining profitability and revenue growth. The balance sheet is robust with a strong equity position and manageable debt levels, providing financial stability. However, the cash flow statement indicates significant challenges, with negative operating cash flow and deteriorating free cash flow, raising concerns about liquidity and cash management.

Income Statement

Perennial Energy Holdings Ltd. shows a mixed performance in its income statement. The gross profit margin for 2024 is strong at 51.9%, indicating effective cost management. However, the net profit margin has decreased to 25.8% from 29.4% in 2023, reflecting a decline in profitability. Revenue growth has been negative over the past year, with a decrease of 0.6%, indicating potential challenges in sales expansion. The EBIT margin stands at 33.8%, and the EBITDA margin is 42.7%, both showing a decline from the previous year, suggesting pressure on operational efficiency.

Balance Sheet

The balance sheet of Perennial Energy Holdings Ltd. is robust with a high equity ratio of 64.9%, reflecting a strong capital structure. The debt-to-equity ratio is moderate at 0.38, indicating manageable leverage. Return on equity is healthy at 13.9%, although it has decreased from 18.1% in the previous year, suggesting a slight decline in shareholder returns. Overall, the company maintains a stable financial position with a solid equity base.

Cash Flow

The cash flow statement reveals significant challenges for Perennial Energy Holdings Ltd. The operating cash flow has turned negative in 2024, indicating cash flow issues from core operations. Free cash flow has also worsened, showing a negative growth rate. The operating cash flow to net income ratio is negative, highlighting inefficiencies in converting income to cash. These factors suggest potential liquidity concerns and the need for improved cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.43B	1.71B	1.72B	1.78B	1.54B	1.40B
Gross Profit	571.89M	885.13M	944.29M	1.12B	918.48M	716.00M
EBITDA	415.15M	728.64M	803.84M	1.07B	845.22M	624.30M
Net Income	185.59M	440.23M	504.19M	743.96M	301.77M	345.48M
Balance Sheet
Total Assets	4.78B	4.86B	4.33B	4.08B	3.24B	2.68B
Cash, Cash Equivalents and Short-Term Investments	146.93M	205.46M	129.96M	202.06M	180.85M	139.60M
Total Debt	1.15B	1.19B	915.15M	788.55M	525.84M	378.69M
Total Liabilities	1.62B	1.70B	1.54B	1.62B	1.47B	1.16B
Stockholders Equity	3.16B	3.16B	2.79B	2.46B	1.77B	1.52B
Cash Flow
Free Cash Flow	-1.04B	-789.30M	-515.67M	-293.73M	98.07M	249.94M
Operating Cash Flow	-681.43M	-423.94M	213.38M	180.74M	553.43M	492.27M
Investing Cash Flow	-453.08M	-590.49M	-866.80M	-734.56M	-662.75M	-756.70M
Financing Cash Flow	1.18B	1.10B	545.07M	575.02M	150.57M	160.72M

Perennial Energy Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.18
• 50DMA: Positive
• 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:2798, the sentiment is Positive. The current price of 1.18 is above the 20-day moving average (MA) of 1.17, above the 50-day MA of 1.09, and above the 200-day MA of 0.86, indicating a bullish trend. The MACD of 0.02 indicates Positive momentum. The RSI at 56.72 is Neutral, neither overbought nor oversold. The STOCH value of 21.58 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:2798.

Perennial Energy Holdings Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1733	73 Outperform	HK$2.46B	8.93	3.21%	20.45%	-23.72%	-86.69%
2798	69 Neutral	HK$1.92B	9.54	6.31%	4.17%	-26.28%	-69.55%
1303	66 Neutral	HK$504.75M	7.64	4.33%	―	39.98%	-73.77%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
0866	46 Neutral	HK$6.65B	18.19	81.71%	1.53%	-20.71%	209.68%
6885	44 Neutral	HK$556.84M	-1.64	-9.96%	―	-26.97%	-76.57%
1393	41 Neutral	HK$303.95M	-0.53	-48.57%	―	15.80%	51.68%

Perennial Energy Holdings Ltd. Corporate Events

Perennial Energy Revises Coal Mine Consolidation Strategy

Perennial Energy Holdings Ltd. announced that it will not proceed with a previously proposed consolidation plan involving three coal mines due to various strategic and regulatory considerations. However, the company remains committed to coal resource integration and has submitted a new proposal for consolidating two coal mines, which could significantly increase production capacity and strengthen its position in the regional coal industry, pending regulatory approval.

Perennial Energy Revises Electricity Supply Caps for 2025 and 2026

Perennial Energy Holdings Ltd. has announced a revision of its annual caps for electricity supply under the 2023 Electricity Supply Agreements for fiscal years 2025 and 2026. The company has increased the caps to RMB45,000,000 for FY2025 and RMB55,000,000 for FY2026, up from the original RMB18,410,000 per year, to meet the growing demand for electricity in its production and operations. This revision reflects the company’s strategic adjustments to ensure sufficient electricity supply for its operations, involving connected transactions with Guizhou Yue Bang, which are subject to specific reporting and compliance requirements under the Hong Kong Listing Rules.