Golden Faith Group Holdings Limited (2863) AI Stock Analysis

• Market Cap: HK$279.25M
• Dividend Yield: 8.33%
• Average Volume (3M): 81.50K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.36
• Revenue Growth: 0.94%
• EPS Growth: 82.30%
• Country: HK
• Employees: 1,107
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): -0.04
• Shares Outstanding: 689,511,000
• 10 Day Avg. Volume: 33,900
• 30 Day Avg. Volume: 81,500
• PEG Ratio: -0.08
• Price to Book (P/B): 1.09
• Price to Sales (P/S): 0.56
• P/FCF Ratio: -8.02
• 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: 50 Neutral
• Price Target: HK$0.41 ▲(26.56% Upside)
• Action: Reiterated Date: 02/19/26
• Date: Action: Reiterated 02/19/26

The score is held back primarily by deteriorating profitability and weak cash flow (negative operating and free cash flow in the latest two years), despite the benefit of a strong, low-debt balance sheet. Technical signals are broadly neutral, and valuation is mixed—an attractive dividend yield is offset by loss-driven negative P/E.

Positive Factors

Low leverage / conservative balance sheet

Very low debt levels and sizeable equity provide a durable solvency cushion. With leverage around 1–2% or less, the company has flexibility to withstand operating stress, fund working capital needs, or access credit without immediate solvency risk, supporting medium-term resilience.

Prior track record of profitability

Historic profitable years (2020–2022) indicate the business model can generate operating profits under the right conditions. That operational capability implies recoverable margins and management experience in delivering profit, offering a foundation for potential turnaround when demand or execution normalizes.

Attractive dividend yield supporting shareholder returns

A sustained high dividend yield signals a shareholder-return focus and can attract stable income investors. Combined with a low-debt balance sheet, this payout capacity can persist longer than for highly leveraged peers, providing a durable cash return channel if management maintains prudent allocation.

Negative Factors

Sustained profitability deterioration

A multi-year shift to net losses and negative operating profit erodes retained earnings and signals structural margin or demand issues. Persistent unprofitability weakens reinvestment capacity, depresses ROE, and makes recovery dependent on substantive operational or market improvements rather than short-term fixes.

Negative operating and free cash flow

Consecutive years of negative operating and free cash flow indicate the business is consuming cash rather than generating it. This raises funding risk, pressures liquidity, and limits capacity for capex, dividends, or debt repayment absent asset sales, external financing, or a swift turnaround in operations.

Revenue volatility and very thin recent gross margins

High revenue volatility and compressed gross margins reduce earnings predictability and leave little buffer against cost shocks. Structural margin pressure makes sustainable profit restoration harder and increases sensitivity to bidding, input costs, and contract mix over the medium term.

Golden Faith Group Holdings Limited Business Overview & Revenue Model

Company Description

Golden Faith Group Holdings Limited, an investment holding company, engages in the provision of electrical and mechanical engineering services in Hong Kong. The company provides engineering services, including electrical and extra-low voltage (ELV) system work and ventilation, and air-conditioning system works. It also offers management installation, supervising, and testing of the electrical and ELV installation services. In addition, it is involved in the property investment business. It undertakes projects in public and private sectors, which comprise residential and commercial buildings, institutional buildings, government buildings, hotels, and hospitals. The company was founded in 1987 and is headquartered in Causeway Bay, Hong Kong.

Golden Faith Group Holdings Limited Financial Statement Overview

Summary

Operating performance is weak: the company shifted from profits (2020–2022) to losses (2023–2025), with volatile revenue, very thin recent gross margins, and negative operating profit in the latest year. Cash generation is a major drag with negative operating cash flow and free cash flow in 2024–2025. Offsetting this, the balance sheet is conservatively financed with very low leverage, which reduces near-term solvency risk despite negative ROE.

Income Statement

Profitability has deteriorated meaningfully: the company moved from solid profits in 2020–2022 to losses in 2023–2025, with the latest year showing negative operating profit and a net loss. Revenue is also volatile—after strong growth in 2023 and growth in 2024, revenue declined sharply in 2025—while gross margin remains very thin in the last two years, limiting the ability to absorb costs. A key positive is that the business has demonstrated it can be profitable (2020–2022), but the current trajectory is weak and inconsistent.

Balance Sheet

The balance sheet appears conservatively financed, with very low leverage across all years (debt-to-equity consistently around ~1–2% or less). Equity remains sizeable relative to assets, providing a cushion despite recent losses. The main concern is negative returns on equity in the last three years, reflecting that capital is not currently generating profits even though leverage risk is limited.

Cash Flow

Cash generation has weakened: operating cash flow and free cash flow are negative in 2024 and 2025 (and operating cash flow was also negative in 2021), indicating the business is consuming cash in the current period. While free cash flow roughly tracks net income in the loss years (i.e., losses are translating into cash outflow rather than being purely non-cash), the magnitude of outflows in 2024–2025 raises funding and sustainability risk unless operating performance improves.

Breakdown	Sep 2025	Sep 2024	Sep 2023	Sep 2022	Sep 2021
Income Statement
Total Revenue	467.14M	736.68M	671.47M	348.61M	254.86M
Gross Profit	14.64M	13.38M	23.27M	46.35M	43.83M
EBITDA	-15.33M	-11.45M	-12.99M	18.47M	24.66M
Net Income	-17.94M	-6.31M	-21.57M	11.59M	16.99M
Balance Sheet
Total Assets	280.61M	337.69M	368.19M	369.37M	320.90M
Cash, Cash Equivalents and Short-Term Investments	91.16M	146.05M	179.01M	134.83M	114.58M
Total Debt	3.48M	5.82M	2.46M	2.50M	3.03M
Total Liabilities	45.71M	64.38M	80.27M	64.14M	33.22M
Stockholders Equity	240.85M	278.41M	282.57M	302.63M	287.12M
Cash Flow
Free Cash Flow	-32.82M	-39.11M	-774.00K	22.23M	-92.41M
Operating Cash Flow	-31.23M	-38.86M	-40.00K	22.90M	-91.03M
Investing Cash Flow	1.94M	612.00K	39.84M	-3.10M	-1.57M
Financing Cash Flow	-23.61M	-3.80M	-1.57M	908.00K	2.53M

Golden Faith Group Holdings Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.32
• 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:2863, the sentiment is Positive. The current price of 0.32 is below the 20-day moving average (MA) of 0.38, below the 50-day MA of 0.36, and below the 200-day MA of 0.36, indicating a bullish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 57.73 is Neutral, neither overbought nor oversold. The STOCH value of 57.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:2863.

Golden Faith Group Holdings Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
0385	71 Outperform	HK$246.88M	2.85	2.38%	5.26%	9.48%	-53.42%
1582	65 Neutral	HK$175.00M	2.21	6.22%	9.71%	27.42%	-32.34%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
1447	62 Neutral	HK$264.00M	6.75	6.62%	15.38%	13.59%	-12.52%
0368	61 Neutral	HK$408.00M	11.37	8.75%	3.63%	6.27%	―
2863	50 Neutral	HK$279.25M	-14.68	-6.83%	8.33%	0.94%	82.30%
1865	48 Neutral	HK$606.24M	-1.14	-14.52%	―	9.19%	84.15%

Golden Faith Group Holdings Limited Corporate Events

Golden Faith Calls 2026 AGM, Seeks Share Issue Mandate and Director Re-election

Golden Faith Group Holdings Limited has convened its annual general meeting for 27 March 2026 in Hong Kong, where shareholders will be asked to receive and adopt the audited consolidated financial statements, directors’ report and independent auditor’s report for the year ended 30 September 2025. The agenda includes the proposed re-election of executive director Ms. Ko Yung Lai Jackie and independent non-executive director Mr. Wong Jovi Chi Wing, approval for the board to fix directors’ remuneration, re-appointment of Deloitte Touche Tohmatsu as auditors with authority for the board to set their fees, and a general mandate authorising the board to allot and issue new shares and related securities up to 20% of the company’s issued share capital, potentially enhancing its capital-raising flexibility and governance continuity for the coming year.

The most recent analyst rating on (HK:2863) stock is a Hold with a HK$0.50 price target. To see the full list of analyst forecasts on Golden Faith Group Holdings Limited stock, see the HK:2863 Stock Forecast page.

Golden Faith Posts Wider Annual Loss on Revenue Slump but Maintains Solid Liquidity

Golden Faith Group Holdings Limited reported a sharp decline in revenue to HK$467.1 million for the year ended 30 September 2025 from HK$736.7 million a year earlier, though gross profit improved slightly to HK$14.6 million. The Group’s loss attributable to owners widened significantly to HK$17.9 million, translating to a basic and diluted loss per share of 2.69 HK cents, as administrative expenses remained high despite lower sales and other income and gains diminished compared with the prior year. The company’s balance sheet remains relatively strong, with cash and cash equivalents of HK$71.0 million and net current assets of HK$228.0 million, although cash levels fell from the previous year and trade receivables decreased markedly while contract assets more than doubled, highlighting ongoing working capital swings tied to project execution. Overall, the results underscore continued pressure on profitability and revenue visibility for stakeholders, even as the Group maintains a solid liquidity position and modest leverage, leaving its near-term focus likely on cost control, project conversion and disciplined capital management.

The most recent analyst rating on (HK:2863) stock is a Hold with a HK$0.50 price target. To see the full list of analyst forecasts on Golden Faith Group Holdings Limited stock, see the HK:2863 Stock Forecast page.