Capital Environment Holdings Limited (3989) AI Stock Analysis

• Market Cap: HK$1.03B
• Dividend Yield: N/A
• Average Volume (3M): 8.11M
• Price to Earnings (P/E): 4.0
• Beta (1Y): 0.38
• Revenue Growth: -11.67%
• EPS Growth: -19.46%
• Country: HK
• Employees: 3,559
• Sector: Industrials
• Sector Strength: 87
• Industry: Waste Management
• EPS (TTM): 0.02
• Shares Outstanding: 14,294,732,000
• 10 Day Avg. Volume: 15,513,800
• 30 Day Avg. Volume: 8,109,004
• PEG Ratio: <0.01
• Price to Book (P/B): 0.31
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -3.88
• 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: 54 Neutral
• Price Target: ―

Capital Environment Holdings Limited faces significant financial challenges, notably in revenue decline and liquidity issues, which weigh heavily on its stock score. Despite this, the company's valuation appears attractive with a low P/E ratio, suggesting potential for future appreciation if financial performance improves. Technical analysis provides mixed signals, indicating caution. Overall, the stock presents a moderate risk-reward profile.

Capital Environment Holdings Limited Business Overview & Revenue Model

Company Description

Capital Environment Holdings Limited (3989) is a Hong Kong-based investment holding company primarily engaged in the provisioning of waste treatment and environmental services. The company operates in various sectors including waste management, environmental remediation, and renewable energy. Its core services encompass the collection, transportation, and treatment of municipal and industrial solid waste along with hazardous waste disposal. Capital Environment Holdings Limited is also involved in the development and operation of waste-to-energy projects.

How the Company Makes Money

Capital Environment Holdings Limited makes money through multiple revenue streams centered around its environmental services. The company earns revenue from waste treatment services, including fees for the collection, transportation, and disposal of municipal, industrial, and hazardous waste. Moreover, it generates income from operating waste-to-energy facilities where waste is converted into renewable energy, which is then sold to power grids. Additionally, the company might benefit from government contracts and incentives related to environmental protection and clean energy initiatives, further bolstering its financial performance. Strategic partnerships with local governments and industrial clients also play a crucial role in sustaining its revenue growth.

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
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
3.67B	4.08B	4.59B	5.40B	7.65B
	Gross Profit
1.31B	1.39B	1.39B	1.64B	1.93B
	EBIT
696.73M	868.03M	874.83M	1.20B	1.26B
	EBITDA
1.03B	1.02B	1.15B	1.63B	1.78B
	Net Income Common Stockholders
234.12M	285.38M	-1.31B	510.75M	465.04M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
659.30M	661.81M	1.51B	1.68B	2.77B
	Total Assets
20.88B	20.29B	20.14B	26.17B	24.06B
	Total Debt
10.65B	10.52B	10.14B	14.05B	13.04B
	Net Debt
9.99B	9.85B	8.63B	12.36B	10.28B
	Total Liabilities
13.89B	13.59B	13.45B	18.46B	16.87B
	Stockholders Equity
6.66B	6.43B	6.49B	6.21B	5.62B
Cash Flow		Free Cash Flow
55.54M	-675.47M	-520.63M	-876.66M	-475.06M
	Operating Cash Flow
297.55M	-385.22M	-231.99M	-445.07M	102.78M
	Investing Cash Flow
0.00	-237.41M	7.60B	-1.33B	-1.98B
	Financing Cash Flow
0.00	-219.55M	-7.50B	764.84M	3.01B

Capital Environment Holdings Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.07
• 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 0.07 is below the 20-day moving average (MA) of 0.08, below the 50-day MA of 0.08, and below the 200-day MA of 0.08, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 40.70 is Neutral, neither overbought nor oversold. The STOCH value of -14.29 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
1330	74 Outperform	€9.59B	9.02	7.85%	4.98%	-9.43%	4.26%
6866	68 Neutral	HK$336.30M	7.96	1.97%	7.68%	-21.32%	-63.98%
2883	68 Neutral	HK$58.71B	9.74	7.81%	3.61%	7.72%	2.35%
1458	67 Neutral	HK$5.24B	50.31	2.60%	2.05%	-12.46%	-13.70%
Sector *	66 Neutral	$4.47B	12.22	5.40%	3.65%	4.14%	-12.00%
3989	54 Neutral	HK$1.03B	4.04	3.58%	―	-11.67%	-19.46%
1545	51 Neutral	HK$126.00M	67.78	0.60%	6.03%	-30.83%	-89.29%

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.