Capital Environment Holdings Limited (3989) AI Stock Analysis

• Market Cap: HK$1.29B
• Dividend Yield: N/A
• Average Volume (3M): 7.82M
• Price to Earnings (P/E): 4.6
• Beta (1Y): 0.47
• 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: 5,880,600
• 30 Day Avg. Volume: 7,823,600
• 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: 1

• Rating: 59 Neutral
• Price Target: HK$0.00 ▼(-100.00% Downside)

The stock's overall score is driven by its undervaluation and positive technical indicators. However, significant financial challenges, particularly in cash flow and revenue growth, weigh heavily on the score.

Capital Environment Holdings Limited Business Overview & Revenue Model

Company Description

Capital Environment Holdings Limited (3989) is a leading provider of environmental protection services in Hong Kong and mainland China. The company focuses on waste management, environmental remediation, and infrastructure development related to environmental sustainability. Its core services include solid waste treatment, wastewater treatment, and the operation of recycling facilities, aiming to contribute to the circular economy and enhance environmental quality in urban areas.

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

Overall, 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: Positive
• Last Price: 0.09
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:3989, the sentiment is Positive. The current price of 0.09 is below the 20-day moving average (MA) of 0.09, above the 50-day MA of 0.09, and above the 200-day MA of 0.08, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 49.21 is Neutral, neither overbought nor oversold. The STOCH value of 31.82 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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$1.48B	50.64	-2.24%	7.38%	―	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
3989	59 Neutral	HK$1.29B	4.58	3.71%	―	-5.24%	-17.75%
0154	59 Neutral	HK$855.21M	2.73	7.62%	―	―	―
0587	55 Neutral	HK$1.10B	194.59	-2.39%	5.00%	-3.37%	-149.08%
0979	54 Neutral	HK$352.64M	―	-34.09%	―	-3.00%	-7.27%

Capital Environment Holdings Limited Corporate Events

Capital Environment Holdings Limited Reports 2024 Financial Results

Capital Environment Holdings Limited announced its audited consolidated results for the year ending December 31, 2024. The company reported a decrease in revenue from RMB 4,076,596,000 in 2023 to RMB 3,666,591,000 in 2024, with a corresponding drop in gross profit. Despite the decline in revenue, the company achieved a profit before tax of RMB 338,785,000, an increase from the previous year. The profit for the year attributable to owners of the parent was RMB 234,123,000, reflecting a decrease in earnings per share. The results indicate a challenging year with reduced revenues but maintained profitability, impacting stakeholders’ expectations and the company’s market positioning.

Capital Environment Holdings Schedules Board Meeting for Annual Results

Capital Environment Holdings Limited has announced a board meeting scheduled for March 21, 2025, to discuss and approve the annual results for the year ending December 31, 2024. The meeting will also consider the recommendation of a final dividend and address other business matters, potentially impacting the company’s financial outlook and shareholder returns.