Royal Deluxe Holdings Ltd. (3789) AI Stock Analysis

• Market Cap: HK$117.60M
• Dividend Yield: N/A
• Average Volume (3M): 60.67K
• Price to Earnings (P/E): 196.0
• Beta (1Y): 0.19
• 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$0.10 ▲(40.00% Upside)

The score is held down primarily by deteriorating profitability and weak cash generation (negative margins and negative operating cash flow), with valuation also a drag due to a very high P/E (220). Technicals provide partial support because the stock is above all major moving averages with positive MACD, though the elevated RSI indicates potentially overheated momentum.

Positive Factors

Low leverage / strong capital structure

Extremely low debt and a strong equity ratio give the company durable financial flexibility. This reduces refinancing risk during downturns, supports funding of property maintenance or selective development, and preserves optionality to pursue strategic investments over months.

Diversified business model

Operating across hotels, property development/leasing and strategic investments reduces reliance on a single revenue stream. This structural diversification can smooth earnings volatility, allow cross-subsidization between segments, and support recovery when one sector lags.

Favorable structural demand tailwinds

Exposure to rising tourism and real estate demand provides a multi-month runway for occupancy and asset-value improvement. Strong regional demand dynamics can sustainably lift hotel revenues and property leasing/sales, improving medium-term cash generation prospects.

Negative Factors

Declining revenue and compressed margins

Contraction in revenue and falling gross and net margins indicate structural pressure on pricing or cost base. Persistently compressed margins erode operating leverage, limit reinvestment in properties and services, and make long-term profitability recovery more challenging.

Weak cash generation

Negative operating cash flow and a steep drop in free cash flow growth signal poor internal cash conversion. This constrains capital expenditures, property upkeep, and strategic investment without external funding, raising sustainability and liquidity risks over months.

Negative return on equity

A negative ROE shows the business is destroying shareholder capital rather than creating it. Persistently negative returns undermine ability to attract equity funding, curb dividend capacity, and indicate that operational improvements are required to restore long-term shareholder value.

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

Financial performance is weak: revenue declined (-3.59%), margins compressed (gross margin down to 5.68%) and profitability turned negative (net margin -0.83%). Cash flow is a major concern with negative operating cash flow and sharply negative free cash flow growth (-252.64%). The balance sheet is a relative bright spot with very low leverage (debt-to-equity 0.0013) and a strong equity ratio, but ROE is negative (-1.95%).

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	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	730.96M	730.96M	783.58M	702.11M	470.42M	870.20M
Gross Profit	38.56M	41.54M	66.45M	61.35M	64.86M	60.95M
EBITDA	-2.19M	7.51M	27.01M	40.72M	22.49M	52.53M
Net Income	-6.05M	-6.05M	9.77M	21.40M	6.78M	37.11M
Balance Sheet
Total Assets	467.24M	467.24M	480.00M	405.37M	415.71M	445.24M
Cash, Cash Equivalents and Short-Term Investments	48.64M	48.64M	88.22M	68.96M	70.53M	85.87M
Total Debt	396.00K	396.00K	632.00K	16.17M	34.71M	43.21M
Total Liabilities	156.66M	156.66M	163.37M	98.51M	130.27M	166.56M
Stockholders Equity	310.58M	310.58M	316.63M	306.86M	285.50M	278.72M
Cash Flow
Free Cash Flow	-40.44M	-40.44M	35.39M	16.85M	-6.82M	24.24M
Operating Cash Flow	-39.72M	-39.72M	40.24M	25.47M	576.00K	42.14M
Investing Cash Flow	-709.00K	428.00K	-11.74M	-8.49M	-7.40M	-14.12M
Financing Cash Flow	-236.00K	-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 0.09, below the 50-day MA of 0.08, and above the 200-day MA of 0.06, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 59.52 is Neutral, neither overbought nor oversold. The STOCH value of 46.58 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	59 Neutral	HK$132.00M	12.94	4.53%	―	-40.54%	―
1630	53 Neutral	HK$130.50M	-7.19	-14.78%	―	-28.21%	34.59%
1472	50 Neutral	HK$91.00M	-6.55	-4.84%	―	71.16%	-67.47%
3789	49 Neutral	HK$117.60M	196.00	0.18%	―	-2.05%	―
1591	47 Neutral	HK$57.60M	-3.41	-12.77%	―	11.27%	-1272.22%
1826	44 Neutral	HK$259.74M	-487.50	―	―	11.52%	98.72%

Royal Deluxe Holdings Ltd. Corporate Events

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.

Royal Deluxe Holdings Reports Positive Interim Results for 2025

Royal Deluxe Holdings Limited announced its unaudited interim results for the six months ending September 30, 2025. The company reported a 3.5% increase in revenue to HK$347,344,000 compared to the same period in 2024. Despite a slight decrease in gross profit margin from 5.8% to 5.5%, the company achieved a profit attributable to owners of HK$3,684,000, a significant improvement from a loss of HK$2,920,000 in the previous year. The financial position strengthened with bank balances and cash increasing by 65.8% to HK$80,622,000. These results indicate a positive turnaround in the company’s financial performance, potentially enhancing its market position and offering reassurance to stakeholders.

The most recent analyst rating on (HK:3789) stock is a Hold with a HK$0.06 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 Holdings Schedules Board Meeting for Interim Results Review

Royal Deluxe Holdings Limited has announced an upcoming board meeting scheduled for November 27, 2025. The meeting’s agenda includes reviewing and approving the unaudited interim results for the six months ending September 30, 2025, and considering the payment of an interim dividend. This announcement indicates the company’s ongoing financial assessments and potential shareholder returns, reflecting its operational focus and commitment to transparency.