Capital Environment Holdings Limited (3989) AI Stock Analysis

• Market Cap: HK$1.19B
• Dividend Yield: N/A
• Average Volume (3M): 7.75M
• Price to Earnings (P/E): 4.4
• Beta (1Y): 0.45
• Revenue Growth: -5.24%
• EPS Growth: -17.75%
• Country: HK
• Employees: 3,559
• Sector: Industrials
• Sector Strength: 72
• Industry: Waste Management
• EPS (TTM): 0.01
• Shares Outstanding: 14,294,732,000
• 10 Day Avg. Volume: 4,842,400
• 30 Day Avg. Volume: 7,749,066
• PEG Ratio: -0.30
• Price to Book (P/B): 0.19
• Price to Sales (P/S): 0.34
• P/FCF Ratio: 22.48
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 50 Neutral
• Price Target: HK$0.00 ▼(-100.00% Downside)

The overall stock score of 50 reflects significant financial challenges, including declining revenues and liquidity issues, as well as bearish technical indicators. While the stock appears undervalued based on its P/E ratio, the lack of dividend yield and negative market momentum weigh heavily on the overall assessment.

Capital Environment Holdings Limited Business Overview & Revenue Model

Company Description

Capital Environment Holdings Limited, an investment holding company, engages in the waste treatment and waste-to-energy businesses in the People's Republic of China and New Zealand. The company is involved in technology development, design, system integration, project investment, consultancy, operation, and maintenance of waste treatment facilities for waste-to-energy projects. It also offers kitchen and hazardous waste treatment, waste collection and transportation, waste sweep and management, technical, and municipal solid waste treatment services; and recycles and disassembles waste electrical and electronic equipment. In addition, the company is involved in the restoration and operation of waste accumulation sites; and biomass incineration power generation activities. Its operation and trial operation projects include 26 waste-to-energy projects; 7 waste landfill projects; 6 anaerobic digestion treatment projects; 17 waste collection and transportation projects; 9 hazardous waste treatment projects; 2 waste electrical appliances dismantling projects; and 2 biomass electricity generation projects. The company was formerly known as New Environmental Energy Holdings Limited and changed its name to Capital Environment Holdings Limited in May 2014. Capital Environment Holdings Limited was incorporated in 2004 and is headquartered in Central, Hong Kong.

How the Company Makes Money

The company generates revenue primarily through contracts for waste management and treatment services offered to municipalities and industrial clients. Key revenue streams include fees for waste collection and disposal, sale of recycled materials, and governmental grants for environmental projects. Capital Environment Holdings also engages in public-private partnerships (PPPs) that help secure long-term contracts with local governments, providing stable income. Furthermore, the company benefits from regulatory incentives and subsidies aimed at promoting environmental protection initiatives, which can enhance profitability.

Capital Environment Holdings Limited Financial Statement Overview

Summary

Capital Environment Holdings Limited faces financial challenges, with declining revenues, inconsistent profit margins, and high leverage. The balance sheet remains stable with increasing equity, but poor cash flow performance highlights liquidity issues. The company needs to improve revenue growth and cash flow generation to strengthen its financial position.

Income Statement

The income statement reveals several challenges. Revenue has shown a declining trend over recent years, with a notable drop from 2020 to 2024. Gross profit margin has remained relatively stable, indicating cost control, but net profit margin has been inconsistent, with losses in 2022. EBIT and EBITDA margins are positive, showing some operating efficiency, yet the declining revenue and inconsistent net income present financial challenges.

Balance Sheet

The balance sheet shows a stable equity base with stockholders' equity increasing slightly over the years. The debt-to-equity ratio is high, indicating significant leverage, which can be risky. However, the company's ability to maintain its equity ratio suggests some balance in its financial structure. The overall asset base has decreased, indicating divestments or reduced asset acquisitions.

Cash Flow

Cash flow analysis reveals significant challenges; consistent negative operating and free cash flows point to ongoing liquidity issues. The free cash flow to net income ratio is unfavorable, indicating the company struggles to convert income into free cash flow. The absence of positive cash flow generation is a major concern for financial sustainability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	3.76B	3.67B	4.08B	4.59B	5.40B	7.65B
Gross Profit	1.37B	1.31B	1.39B	1.39B	1.64B	1.93B
EBITDA	1.05B	1.03B	1.02B	1.15B	1.63B	1.78B
Net Income	251.65M	234.12M	285.38M	1.69B	510.75M	465.04M
Balance Sheet
Total Assets	21.08B	20.88B	20.29B	20.14B	26.17B	24.06B
Cash, Cash Equivalents and Short-Term Investments	2.22B	659.30M	2.29B	2.95B	2.81B	2.77B
Total Debt	10.95B	10.65B	10.52B	10.14B	14.05B	13.04B
Total Liabilities	13.89B	13.89B	13.59B	13.45B	18.46B	16.87B
Stockholders Equity	6.85B	6.66B	6.43B	6.49B	6.21B	5.62B
Cash Flow
Free Cash Flow	528.23M	55.54M	-675.47M	-520.63M	-876.66M	-475.06M
Operating Cash Flow	578.91M	297.55M	-385.22M	-231.99M	-445.07M	102.78M
Investing Cash Flow	-347.32M	-214.60M	-237.41M	7.60B	-1.33B	-1.98B
Financing Cash Flow	-280.14M	-81.85M	-219.55M	-7.50B	764.84M	3.01B

Capital Environment Holdings Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.08
• 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:3989, the sentiment is Negative. The current price of 0.08 is below the 20-day moving average (MA) of 0.08, below the 50-day MA of 0.09, and below the 200-day MA of 0.08, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 31.57 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:3989.

Capital Environment Holdings Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1790	67 Neutral	HK$450.00M	6.74	4.69%	―	17.22%	-21.23%
3718	66 Neutral	HK$1.49B	-19.53	-2.24%	7.38%	―	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
0154	60 Neutral	HK$855.21M	2.83	7.62%	―	―	―
0587	54 Neutral	HK$1.04B	-13.41	-2.39%	5.00%	-3.37%	-149.08%
0979	54 Neutral	HK$278.04M	―	-34.09%	―	-3.00%	-7.27%
3989	50 Neutral	HK$1.19B	4.37	3.71%	―	-5.24%	-17.75%

Capital Environment Holdings Limited Corporate Events

Capital Environment Holdings Limited Announces Board and Committee Composition

Capital Environment Holdings Limited has announced the composition of its board of directors and the membership of its three board committees. This announcement provides clarity on the leadership structure, which is crucial for stakeholders to understand the governance and strategic direction of the company.

Capital Environment Holdings Appoints New Executive Director and General Manager

Capital Environment Holdings Limited has announced the appointment of Mr. Guo Chaoyang as the new executive director and general manager, effective from September 17, 2025. This change aligns with the company’s strategic focus on separating the roles of chairman and chief executive, as Mr. Li Qingsong will continue as an executive director and chairman of the board. This move is expected to enhance corporate governance and operational efficiency, potentially impacting the company’s market positioning and stakeholder relations positively.

Capital Environment Holdings Reports Stable Interim Results for 2025

Capital Environment Holdings Limited announced its unaudited interim results for the first half of 2025, reporting a revenue increase to RMB 1,875,929,000 from RMB 1,786,721,000 in the same period of 2024. The company achieved a gross profit of RMB 706,007,000, with a slight increase in profit attributable to owners of the parent, reaching RMB 188,182,000. Despite facing higher impairment losses, the company’s earnings per share rose to RMB 1.32 cents, indicating a stable financial performance and potential growth in the environmental services sector.

Capital Environment Holdings to Review Interim Results and Dividend Proposal

Capital Environment Holdings Limited has announced that its board of directors will meet on August 20, 2025, to review and approve the company’s unaudited interim results for the first half of the year and discuss the potential recommendation of an interim dividend. This meeting is significant as it could impact the company’s financial strategy and provide insights into its operational performance, potentially affecting stakeholder confidence and market positioning.

Leadership Changes at Capital Environment Holdings Limited

Capital Environment Holdings Limited announced the resignation of Mr. Li Fujing as Chairman and Executive Director, effective July 25, 2025, due to other work arrangements. Mr. Li Qingsong, the current CEO, will assume the role of Chairman, bringing extensive experience in investment and financing management to the position. These leadership changes are expected to influence the company’s strategic direction and potentially impact its market positioning.

Capital Environment Holdings Limited Updates Board Composition

Capital Environment Holdings Limited has announced the composition of its board of directors and the roles within its board committees. This update, which includes details about the executive, non-executive, and independent non-executive directors, as well as the members of the audit, nomination, and remuneration committees, reflects the company’s governance structure and may impact its strategic direction and stakeholder engagement.