NNK Group Ltd (3773) AI Stock Analysis

• Market Cap: HK$664.00M
• Dividend Yield: N/A
• Average Volume (3M): 40.47K
• Price to Earnings (P/E): 26.7
• Beta (1Y): -0.07
• Revenue Growth: 12.63%
• EPS Growth: -37.50%
• Country: HK
• Employees: 156
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Infrastructure
• EPS (TTM): 0.03
• Shares Outstanding: 415,000,000
• 10 Day Avg. Volume: 53,000
• 30 Day Avg. Volume: 40,466
• PEG Ratio: 0.37
• Price to Book (P/B): 3.63
• Price to Sales (P/S): 9.00
• P/FCF Ratio: -9.03
• 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: 70 Outperform
• Price Target: HK$1.50 ▼(-8.54% Downside)

NNK Group Ltd's strong financial performance, particularly in revenue and profit growth, is a key strength. However, cash flow challenges and a high P/E ratio present risks. Technical indicators show positive momentum, but caution is advised due to potential overbought conditions.

Positive Factors

Revenue Growth

A 39% year-over-year revenue jump signals durable demand and greater product-market fit across software, hardware and services. Sustained top-line expansion supports economies of scale, funds R&D and sales investments, and improves the long-run ability to absorb fixed costs and compete.

High Profitability

Very high gross and healthy operating margins point to strong pricing power and a scalable business mix, especially from software and services. Durable margin structure supports healthy cash generation potential, reinvestment capacity, and resilience through industry cycles.

Solid Equity Base and ROE

Improved ROE alongside a stable 55.5% equity ratio indicates better capital efficiency while preserving a strong equity cushion. This capital structure provides long-term financial flexibility for strategic investments, acquisitions, and cushioning versus downturns.

Negative Factors

Negative Cash Flow

Negative operating and free cash flow signal a durable cash-conversion problem despite accounting profits. Over months this can force external financing, limit capex and R&D funding, raise refinancing risk, and constrain the firm's ability to sustain growth without margin improvement.

Rising Leverage

An uptick in leverage to a 0.40 debt/equity level reduces balance sheet flexibility. If cash generation remains weak, higher debt raises interest and refinancing pressure, limits strategic optionality, and heightens vulnerability to macro shocks over the medium term.

Declining EPS Growth

A steep EPS decline indicates deteriorating per-share profitability or dilution that can erode investor returns if persistent. Over the medium term, reversing volatile EPS is essential to justify reinvestment, retain investor confidence, and sustain access to low-cost capital.

NNK Group Ltd Business Overview & Revenue Model

Company Description

Yinsheng Digifavor Company Limited provides mobile and data usage top-up services to mobile subscribers in the People's Republic of China. It operates through Top Up Services and Digital Marketing Services segments. The company offers a 007ka Top-up Platform that processes mobile top-up request received from mobile users. It provides mobile top-up services through electronic banking systems, offline channels, third-party online platforms, the company's websites, and Wechat public account. The company also engages in provision of mobile charges and all-in-one live streaming services; technical development; sale of consultation packages and products related to diabetes; and souring and delivery of virtual products, as well as value-added services. The company was formerly known as NNK Group Limited and changed its name to Yinsheng Digifavor Company Limited in July 2023. Yinsheng Digifavor Company Limited was incorporated in 2015 and is headquartered in Shenzhen, the People's Republic of China.

How the Company Makes Money

NNK Group Ltd generates revenue primarily through the sale of its software solutions and automated manufacturing systems, which are tailored to meet the specific needs of its clients. The company also earns income from consultancy services that help businesses implement these technologies effectively. Key revenue streams include licensing fees for software, sales of hardware components associated with manufacturing systems, and service contracts for ongoing support and maintenance. Additionally, NNK Group has established strategic partnerships with major technology firms, enabling it to leverage synergies in product development and market access, which further enhances its earning potential.

NNK Group Ltd Financial Statement Overview

Summary

NNK Group Ltd demonstrates strong revenue and profit growth, with robust margins indicating operational efficiency. However, cash flow challenges are evident, with negative operating and free cash flow, which could impact future liquidity.

Income Statement

The company has shown strong revenue growth with a 39.0% increase from 2023 to 2024. Gross profit margin remains high at 81.3% in 2024, indicating efficient cost management. Net profit margin improved to 25.4%, reflecting enhanced profitability. Both EBIT and EBITDA margins are healthy at 27.5% and 28.7%, respectively, showcasing strong operational performance.

Balance Sheet

The debt-to-equity ratio increased to 0.40, suggesting moderate leverage. Return on equity improved to 10.3%, indicating better utilization of equity. The equity ratio is stable at 55.5%, reflecting a strong equity base. However, the increase in total debt warrants monitoring for potential risks.

Cash Flow

The company experienced a significant decline in operating cash flow, turning negative in 2024. Free cash flow also turned negative, indicating cash management challenges. The operating cash flow to net income ratio is negative, highlighting potential issues in converting earnings to cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	135.17M	125.56M	90.30M	86.36M	90.33M	81.23M
Gross Profit	98.06M	102.10M	73.83M	72.48M	75.55M	63.00M
EBITDA	27.37M	36.07M	21.29M	28.57M	26.71M	24.73M
Net Income	23.09M	31.94M	16.35M	27.27M	26.48M	30.21M
Balance Sheet
Total Assets	626.83M	560.82M	412.53M	506.60M	379.84M	352.97M
Cash, Cash Equivalents and Short-Term Investments	141.05M	50.84M	93.00M	96.22M	32.52M	103.58M
Total Debt	181.16M	123.12M	31.85M	152.19M	51.71M	52.07M
Total Liabilities	305.88M	252.18M	133.23M	243.65M	144.16M	143.76M
Stockholders Equity	323.71M	311.25M	279.30M	262.95M	235.68M	209.21M
Cash Flow
Free Cash Flow	-4.80M	-125.16M	115.69M	-36.59M	-68.44M	-41.45M
Operating Cash Flow	-4.01M	-123.72M	117.15M	-33.50M	-67.04M	-40.66M
Investing Cash Flow	-2.22M	-2.75M	-456.00K	-984.00K	-453.00K	96.00K
Financing Cash Flow	273.00K	47.65M	-33.06M	57.55M	-3.85M	27.64M

NNK Group Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.64
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:3773, the sentiment is Positive. The current price of 1.64 is above the 20-day moving average (MA) of 1.57, above the 50-day MA of 1.59, and above the 200-day MA of 1.58, indicating a bullish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 64.48 is Neutral, neither overbought nor oversold. The STOCH value of 76.19 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:3773.

NNK Group Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3773	70 Outperform	HK$664.00M	26.67	7.35%	―	12.63%	-37.50%
8017	69 Neutral	HK$1.04B	9.20	39.26%	―	146.18%	1617.05%
8062	63 Neutral	HK$96.48M	-77.31	-0.93%	8.40%	-29.38%	-104.21%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3315	61 Neutral	HK$654.08M	14.07	2.23%	6.63%	-16.76%	-50.21%
0818	54 Neutral	HK$1.39B	9.73	1.98%	―	-17.23%	-6.20%
8613	40 Underperform	HK$84.82M	-2.26	―	―	-43.10%	-5.98%