Royal Deluxe Holdings Ltd. (3789) AI Stock Analysis

• Market Cap: HK$142.80M
• Dividend Yield: N/A
• Average Volume (3M): 60.67K
• Price to Earnings (P/E): 4.7
• Beta (1Y): 0.29
• Revenue Growth: -2.05%
• EPS Growth: N/A
• Country: HK
• Employees: 89
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): <0.01
• Shares Outstanding: 1,200,000,000
• 10 Day Avg. Volume: 22,400
• 30 Day Avg. Volume: 60,666
• PEG Ratio: 0.07
• Price to Book (P/B): 0.22
• Price to Sales (P/S): 0.09
• P/FCF Ratio: -1.66
• 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: 49 Neutral
• Price Target: HK$0.12 ▲(67.14% Upside)
• Action: Reiterated Date: 03/01/26
• Date: Action: Reiterated 03/01/26

The score is held down primarily by weak financial performance (declining margins, losses, and negative operating/free cash flow) and an expensive valuation (P/E 296). Technicals provide some support due to a strong uptrend and positive MACD, but overbought RSI/Stoch signals raise near-term pullback risk.

Positive Factors

Low leverage

Extremely low debt-to-equity provides durable financial flexibility: it reduces interest expense risk, preserves borrowing capacity for project financing or working capital, and allows management to pursue strategic investments or weather downturns without immediate refinancing pressure.

Solid capital structure

A strong equity base supports long-term resilience in an engineering and construction business that often requires upfront working capital. It improves creditor confidence, underpins bidding ability on contracts, and cushions the company against cyclical revenue shocks over the next several months.

Low systematic volatility

A low beta indicates the company is less sensitive to broad market swings, which can be valuable for capital-intensive contracting businesses. Lower share volatility helps management plan multi‑period projects and reduces the cost of equity financing, aiding steadier execution.

Negative Factors

Declining revenue & margins

Falling revenue combined with compressed gross and negative net margins points to weakening core profitability. This trend erodes the firm's ability to self-fund operations and reinvest, and if persistent will strain competitiveness and the sustainability of contracts over the next several quarters.

Cash flow weakness

Material negative operating cash flow and sharply worse free cash flow growth indicate poor cash conversion and working capital stress. Even with low leverage, sustained cash deficits force external funding or asset sales, limiting capacity to bid for new contracts and invest in backlog execution.

Negative return on equity

A negative ROE signals the company is destroying shareholder capital rather than earning returns. Over a multi‑quarter horizon this undermines investor confidence, constrains equity‑based financing options, and suggests structural profitability or execution issues that require strategic remediation.

Royal Deluxe Holdings Ltd. Business Overview & Revenue Model

Company Description

Royal Deluxe Holdings Ltd. (3789) is a diversified investment holding company based in Hong Kong, primarily engaged in the hospitality, property development, and investment sectors. The company focuses on managing a portfolio of hotels and properties, providing a range of services including property management and development, while also exploring opportunities in strategic investments across various industries.

How the Company Makes Money

Royal Deluxe Holdings Ltd. generates revenue primarily through its hotel operations, which include room bookings, event hosting, and food and beverage services. The company also derives income from property sales and leasing activities in its real estate segment. Additionally, strategic investments in other businesses contribute to its earnings, with revenue streams bolstered by partnerships with local and international entities in the hospitality and property sectors. The company benefits from rising tourism and real estate demand in its operational regions, enhancing its overall profitability.

Royal Deluxe Holdings Ltd. Financial Statement Overview

Summary

Weak fundamentals: revenue declined (-3.59%), margins compressed (gross margin down to 5.68%) and net margin turned negative (-0.83%). Cash flow is a key concern with negative operating cash flow and sharply negative free cash flow growth (-252.64%), partially offset by a very low debt-to-equity ratio (0.0013) and a solid equity base.

Income Statement

The income statement shows a declining trend in revenue with a negative revenue growth rate of -3.59% in the most recent year. Gross profit margin has decreased from 8.48% to 5.68%, and net profit margin turned negative at -0.83%, indicating profitability challenges. EBIT and EBITDA margins have also declined, reflecting operational inefficiencies.

Balance Sheet

The balance sheet remains relatively stable with a low debt-to-equity ratio of 0.0013, indicating low leverage. However, return on equity has turned negative at -1.95%, reflecting poor profitability. The equity ratio remains strong, suggesting a solid capital structure.

Cash Flow

Cash flow analysis reveals significant challenges, with a negative free cash flow growth rate of -252.64% and negative operating cash flow. The operating cash flow to net income ratio is negative, indicating cash flow issues relative to earnings. Free cash flow to net income ratio is slightly positive, but overall cash flow performance is weak.

Breakdown	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	730.96M	783.58M	702.11M	470.42M	870.20M
Gross Profit	41.54M	66.45M	61.35M	64.86M	60.95M
EBITDA	7.51M	27.01M	40.72M	22.49M	52.53M
Net Income	-6.05M	9.77M	21.40M	6.78M	37.11M
Balance Sheet
Total Assets	467.24M	480.00M	405.37M	415.71M	445.24M
Cash, Cash Equivalents and Short-Term Investments	48.64M	88.22M	68.96M	70.53M	85.87M
Total Debt	396.00K	632.00K	16.17M	34.71M	43.21M
Total Liabilities	156.66M	163.37M	98.51M	130.27M	166.56M
Stockholders Equity	310.58M	316.63M	306.86M	285.50M	278.72M
Cash Flow
Free Cash Flow	-40.44M	35.39M	16.85M	-6.82M	24.24M
Operating Cash Flow	-39.72M	40.24M	25.47M	576.00K	42.14M
Investing Cash Flow	428.00K	-11.74M	-8.49M	-7.40M	-14.12M
Financing Cash Flow	-255.00K	-16.26M	-18.55M	-8.52M	-7.80M

Royal Deluxe Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.07
• 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:3789, the sentiment is Positive. The current price of 0.07 is below the 20-day moving average (MA) of 0.10, below the 50-day MA of 0.09, and above the 200-day MA of 0.07, indicating a bullish trend. The MACD of 0.01 indicates Negative momentum. The RSI at 55.88 is Neutral, neither overbought nor oversold. The STOCH value of 63.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
1637	60 Neutral	HK$152.00M	-5.15	4.53%	―	-40.54%	―
1472	50 Neutral	HK$80.00M	-1.24	-4.84%	―	71.16%	-67.47%
3789	49 Neutral	HK$142.80M	4.72	0.18%	―	-2.05%	―
1630	49 Neutral	HK$93.00M	23.50	-14.78%	―	-28.21%	34.59%
1591	47 Neutral	HK$69.33M	-1.08	-12.77%	―	11.27%	-1272.22%
1826	44 Neutral	HK$276.52M	-7.35	―	―	11.52%	98.72%

Royal Deluxe Holdings Ltd. Corporate Events

Royal Deluxe refreshes board with veteran engineer as independent director

Royal Deluxe Holdings has announced a board reshuffle, with independent non-executive director Lai Ah Ming Leon stepping down on 28 February 2026 to focus on personal and business commitments. The company said Lai has no disagreement with the board and there are no issues related to his resignation that need to be brought to shareholders’ attention.

He will be succeeded by veteran engineer Fok Sheung Wai, who joins the board as an independent non-executive director on 1 March 2026 after a 47-year career in the construction industry, including a long tenure at AECOM Asia. Fok’s appointment, on a three-year term with a monthly fee of HK$16,500, adds substantial technical and professional depth to the board and maintains compliance with independence requirements, which may bolster governance and oversight in the group’s construction operations.

The most recent analyst rating on (HK:3789) stock is a Hold with a HK$0.11 price target. To see the full list of analyst forecasts on Royal Deluxe Holdings Ltd. stock, see the HK:3789 Stock Forecast page.

Royal Deluxe Refreshes Board With New Independent Non-Executive Director

Royal Deluxe Holdings Limited announced that independent non-executive director (INED) Mr. Kwong Ping Man will resign with effect from 31 January 2026 in order to devote more time to other work commitments, with the company noting there is no disagreement with the board or other matters requiring shareholder attention. The board has appointed veteran accountant and corporate governance specialist Mr. Huang Victor as an independent non-executive director effective 1 February 2026, adding more than 30 years of experience in professional accounting, capital markets and M&A, as well as extensive INED experience at multiple Hong Kong- and mainland-listed companies; the move is expected to strengthen Royal Deluxe’s board oversight and committee capabilities, potentially enhancing its governance profile in the market.

The most recent analyst rating on (HK:3789) stock is a Hold with a HK$0.10 price target. To see the full list of analyst forecasts on Royal Deluxe Holdings Ltd. stock, see the HK:3789 Stock Forecast page.

Royal Deluxe Sets Out Board Composition and Committee Roles

Royal Deluxe Holdings Limited has announced the current composition of its six-member board, comprising three executive directors, led by chairman Mr. Wang Kei Ming, and three independent non-executive directors, namely Mr. Lai Ah Ming Leon, Mr. Huang Victor and Mr. Sio Kam Seng. The company has also detailed the membership of its five key board committees—Audit, Remuneration, Nomination, Environmental, Social and Governance, and Risk—clarifying the leadership and participation of each director across these governance bodies, a move that underscores its emphasis on structured corporate oversight and delineation of responsibilities for audit, remuneration, ESG and risk management.

The most recent analyst rating on (HK:3789) stock is a Hold with a HK$0.10 price target. To see the full list of analyst forecasts on Royal Deluxe Holdings Ltd. stock, see the HK:3789 Stock Forecast page.