Royal Deluxe Holdings Ltd. (3789) AI Stock Analysis

• Market Cap: HK$64.80M
• Dividend Yield: N/A
• Average Volume (3M): 24.27K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.18
• Revenue Growth: 3.63%
• EPS Growth: -106.98%
• Country: HK
• Employees: 89
• Sector: Industrials
• Sector Strength: 84
• Industry: Engineering & Construction
• EPS (TTM): >-0.01
• Shares Outstanding: 1,200,000,000
• 10 Day Avg. Volume: 20,400
• 30 Day Avg. Volume: 24,266
• PEG Ratio: 0.03
• Price to Book (P/B): 0.45
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 8.19
• 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

• Rating: 62 Neutral
• Price Target: ―

Royal Deluxe Holdings Ltd. shows strong revenue growth and cash flow generation, supported by a solid balance sheet with minimal leverage. However, challenges in profitability and efficiency, combined with a negative P/E ratio and lack of dividend yield, weigh down the overall assessment. Technical indicators show mixed signals, suggesting caution in short-term momentum.

Royal Deluxe Holdings Ltd. Business Overview & Revenue Model

Company Description

Royal Deluxe Holdings Ltd. (3789) is a Hong Kong-based construction company primarily engaged in the provision of foundation works and ancillary services. The company operates mainly in the sectors of construction and engineering, offering a wide range of services such as site formation, excavation, and the installation of foundation piles for various building and infrastructure projects. Royal Deluxe Holdings has established itself as a key player in the Hong Kong construction industry, known for its expertise and quality in delivering complex foundation solutions.

How the Company Makes Money

Royal Deluxe Holdings Ltd. generates revenue primarily through its construction contracts for foundation works. The company's key revenue streams include project-based contracts where it provides comprehensive foundation engineering services. These contracts are typically awarded by property developers and government entities for residential, commercial, and infrastructure projects. Royal Deluxe Holdings earns money by completing these contracts, which often include various stages such as project design, planning, construction, and maintenance services. Significant partnerships with construction firms and developers help the company secure continuous project pipelines, contributing to its earnings. The company's revenue is influenced by factors such as the demand for new construction projects in Hong Kong, competitive bidding processes, and its ability to deliver projects on time and within budget.

Royal Deluxe Holdings Ltd. Financial Statement Overview

Summary

Royal Deluxe Holdings Ltd. demonstrates robust revenue growth and strong cash flow generation, signifying operational resilience. The balance sheet is solid with minimal leverage and a high equity ratio. However, declining net profit margins and low profitability metrics like ROE and EBIT margins highlight potential areas for improvement in cost management and operational efficiency.

Income Statement

The company shows a positive revenue growth rate of 11.60% from 2023 to 2024, indicating strong sales performance. However, the net profit margin decreased from 3.05% in 2023 to 1.25% in 2024, suggesting profitability challenges. Gross profit margin remains stable at around 7.91% in 2024. EBIT and EBITDA margins are relatively low at 0.92% and 3.45%, respectively, reflecting operational efficiency issues.

Balance Sheet

The company maintains a low debt-to-equity ratio of 0.002, showcasing financial prudence. The return on equity (ROE) decreased to 3.09% in 2024, indicating lower profitability for shareholders. The equity ratio is strong at 65.95%, denoting a solid equity base compared to total assets.

Cash Flow

Free cash flow grew substantially by 110.05% from 2023 to 2024, reflecting strong cash generation capabilities. The operating cash flow to net income ratio is healthy at 4.12, indicating robust cash flow in relation to net income. However, the free cash flow to net income ratio of 3.62 suggests that not all cash generation is translating into net income effectively.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
758.21M	783.58M	702.11M	470.42M	870.20M	706.68M
	Gross Profit
49.24M	66.45M	61.35M	64.86M	60.95M	88.13M
	EBIT
-10.24M	7.23M	1.54M	3.90M	-8.97M	24.47M
	EBITDA
2.98M	27.01M	40.72M	22.49M	52.53M	41.99M
	Net Income Common Stockholders
-713.00K	9.77M	21.40M	6.78M	37.11M	26.97M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
110.38M	88.22M	68.96M	70.53M	85.87M	65.66M
	Total Assets
458.23M	480.00M	405.37M	415.71M	445.24M	434.96M
	Total Debt
530.00K	632.00K	16.17M	34.71M	43.21M	47.23M
	Net Debt
-61.15M	-87.58M	-52.80M	-35.82M	-42.66M	-18.43M
	Total Liabilities
144.52M	163.37M	98.51M	130.27M	166.56M	188.00M
	Stockholders Equity
313.71M	316.63M	306.86M	285.50M	278.72M	247.00M
Cash Flow		Free Cash Flow
26.49M	35.39M	16.85M	-6.82M	24.24M	-14.68M
	Operating Cash Flow
31.27M	40.24M	25.47M	576.00K	42.14M	2.40M
	Investing Cash Flow
-14.80M	-11.74M	-8.49M	-7.40M	-14.12M	-16.95M
	Financing Cash Flow
-13.52M	-16.26M	-18.55M	-8.52M	-7.80M	-12.52M

Royal Deluxe Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.05
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:3789, the sentiment is Negative. The current price of 0.05 is below the 20-day moving average (MA) of 0.06, below the 50-day MA of 0.05, and below the 200-day MA of 0.06, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 30.32 is Neutral, neither overbought nor oversold. The STOCH value of -11.11 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:3789.

Royal Deluxe Holdings Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1109	76 Outperform	$189.68B	6.84	9.66%	9.18%	9.97%	-19.80%
3311	71 Outperform	HK$63.39B	6.46	14.62%	4.75%	1.21%	2.15%
Sector *	66 Neutral	$4.44B	12.06	5.34%	6.22%	4.17%	-11.81%
3789	62 Neutral	HK$64.80M	―	-0.23%	―	3.63%	-106.98%

Royal Deluxe Holdings Ltd. Corporate Events

Royal Deluxe Holdings Renews Key Framework Agreements

Royal Deluxe Holdings Limited has announced the renewal of its GTM and GTS Framework Agreements, which involve transactions with GT Material and GT Scaffolding, companies wholly-owned by a relative of several of Royal Deluxe’s directors. These transactions are considered continuing connected transactions under the Listing Rules, requiring independent shareholder approval due to the percentage ratios exceeding 5%. An extraordinary general meeting will be held for shareholders to consider and approve these agreements, with relevant details to be provided in a forthcoming circular.