Telecom Service One Holdings Ltd. (3997) AI Stock Analysis

• Market Cap: HK$79.57M
• Dividend Yield: 3.23%
• Average Volume (3M): 60.47K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.11
• Revenue Growth: -1.54%
• EPS Growth: -48.57%
• Country: HK
• Employees: 101
• Sector: Consumer Cyclical
• Sector Strength: 69
• Industry: Personal Products & Services
• EPS (TTM): -0.01
• Shares Outstanding: 128,342,000
• 10 Day Avg. Volume: 128,800
• 30 Day Avg. Volume: 60,466
• PEG Ratio: -1.60
• Price to Book (P/B): 1.10
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 14.30
• 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: 46 Neutral
• Price Target: ―

The overall stock score for Telecom Service One Holdings Ltd. is 46, reflecting significant financial challenges, including declining profitability and volatile cash flows, which weigh heavily on the stock's potential. Although the balance sheet remains relatively strong, with low leverage, the inability to generate consistent profits and positive cash flow is a major concern. Technical analysis suggests a cautious outlook with some potential for short-term gains. The valuation is hindered by a negative P/E ratio, though the dividend yield offers slight compensation. Overall, the company's financial instability is the primary factor influencing the score.

Telecom Service One Holdings Ltd. Business Overview & Revenue Model

Company Description

Telecom Service One Holdings Ltd. (3997) is a Hong Kong-based investment holding company primarily engaged in the provision of repair and refurbishment services for mobile phones and other personal electronic products. The company operates in the telecommunications and electronics sectors, offering its services to a diverse clientele that includes major mobile phone manufacturers, network operators, and retail customers.

How the Company Makes Money

Telecom Service One Holdings Ltd. generates revenue mainly through offering repair and refurbishment services for mobile devices and other electronics. The company earns income by partnering with leading mobile phone manufacturers and network operators to provide after-sales services, including warranty repairs and out-of-warranty repairs. Additionally, the company benefits from retail customers seeking repair services for their personal electronic devices. The focus on quality and efficiency in service delivery helps maintain strong relationships with key partners and clients, contributing to the company's earnings.

Telecom Service One Holdings Ltd. Financial Statement Overview

Summary

Telecom Service One Holdings Ltd. faces significant financial challenges, characterized by declining profitability, negative net income, and volatile cash flows. While the balance sheet shows a strong equity position and low leverage, the inability to generate consistent profits and positive free cash flow poses risks. The company must focus on improving operational efficiency and stabilizing its financial performance to enhance shareholder value.

Income Statement

The company has experienced a decline in both gross profit and net profit margins over the past few years. The gross profit margin has decreased from 37.7% in 2020 to 20.7% in 2024. The net profit margin has also fallen significantly, turning negative in recent years. Revenue growth has been erratic, with some years showing positive growth and others negative. Overall, the income statement indicates financial instability and challenges in maintaining profitability.

Balance Sheet

The balance sheet shows a relatively low debt-to-equity ratio, which indicates low leverage. However, the return on equity has turned negative in recent years due to net losses. The equity ratio remains strong, suggesting a solid asset base compared to liabilities. Despite the strong equity position, the company needs to address its profitability issues to improve overall financial health.

Cash Flow

The cash flow statement reveals a volatile free cash flow position, with negative figures in recent years. The operating cash flow to net income ratio is low due to negative net income, indicating challenges in converting earnings into cash. While the company managed positive operating cash flow in some years, substantial capital expenditures and volatile free cash flow highlight financial management concerns.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	50.99M	54.39M	51.38M	34.76M	38.35M	44.32M
Gross Profit	7.00M	11.25M	11.38M	13.44M	15.32M	16.72M
EBITDA	-7.92M	-4.28M	-1.37M	3.93M	10.72M	3.22M
Net Income	-8.68M	-9.17M	-7.12M	-1.01M	9.57M	2.51M
Balance Sheet
Total Assets	78.11M	85.62M	89.11M	97.05M	100.12M	102.86M
Cash, Cash Equivalents and Short-Term Investments	12.54M	12.79M	18.58M	20.46M	89.73M	90.04M
Total Debt	3.16M	6.76M	1.49M	4.44M	1.23M	1.89M
Total Liabilities	9.17M	14.88M	9.07M	9.73M	4.34M	6.65M
Stockholders Equity	68.94M	70.73M	80.03M	87.31M	95.78M	96.21M
Cash Flow
Free Cash Flow	5.30M	-689.00K	-931.00K	-34.00M	5.82M	8.90M
Operating Cash Flow	5.47M	215.00K	410.00K	1.63M	6.00M	9.12M
Investing Cash Flow	10.51M	-269.00K	1.01M	-77.13M	754.00K	1.78M
Financing Cash Flow	-5.28M	-728.00K	-1.31M	-9.75M	-7.07M	-7.76M

Telecom Service One Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.62
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:3997, the sentiment is Positive. The current price of 0.62 is above the 20-day moving average (MA) of 0.56, above the 50-day MA of 0.53, and above the 200-day MA of 0.56, indicating a bullish trend. The MACD of 0.03 indicates Negative momentum. The RSI at 65.20 is Neutral, neither overbought nor oversold. The STOCH value of 17.88 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:3997.

Telecom Service One Holdings Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1181	57 Neutral	HK$188.30M	53.14	-8.51%	5.71%	-10.93%	-143.61%
Sector *	57 Neutral	HK$25.53B	4.08	-2.03%	6.11%	-0.31%	-67.64%
6828	54 Neutral	HK$1.11B	13.24	6.29%	―	-21.48%	-7.50%
3997	46 Neutral	HK$79.57M	―	-21.42%	3.23%	-1.54%	-48.57%

Telecom Service One Holdings Ltd. Corporate Events

Telecom Service One Holdings Announces Board Composition and Committee Structure

Telecom Service One Holdings Limited has announced the composition of its board of directors, which includes a mix of executive, non-executive, and independent non-executive directors. The company has also established three board committees—Audit, Remuneration, and Nomination—each chaired and comprised of different board members. This announcement is significant as it outlines the governance structure of the company, potentially impacting its strategic direction and stakeholder engagement.

Telecom Service One Announces Board Changes and Compliance Plans

Telecom Service One Holdings Ltd. announced the resignation of Ms. Kwok Yuen Man Marisa as an independent non-executive director and chairman of the nomination committee, effective 1 April 2025, due to personal commitments. This resignation leaves the company non-compliant with certain Hong Kong Stock Exchange listing rules, including having only two independent non-executive directors and a single-gender board. The company plans to address these issues by appointing a suitable female candidate within three months to ensure board diversity. Additionally, Mr. Tso Ka Yi will be appointed as the new chairman of the nomination committee.

Telecom Service One Holdings Addresses Public Float Compliance Issue

Telecom Service One Holdings Limited announced an issue regarding its public float requirements due to a substantial shareholder, Ms. Chan Lai Ping, whose shareholding exceeded the threshold, thus affecting the company’s compliance with the Stock Exchange’s rules. The company has since rectified the situation by reducing Ms. Chan’s shareholding and has implemented measures to prevent similar occurrences in the future, including director training and regular monitoring of shareholdings.