Fangzhou Inc. (6086) AI Stock Analysis

• Market Cap: HK$3.85B
• Dividend Yield: N/A
• Average Volume (3M): 2.23M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.64
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: HK
• Employees: 488
• Sector: Technology
• Sector Strength: 88
• Industry: Drug Manufacturers - General
• EPS (TTM): -0.70
• Shares Outstanding: 1,340,267,500
• 10 Day Avg. Volume: 2,295,282
• 30 Day Avg. Volume: 2,230,174
• PEG Ratio: -0.03
• Price to Book (P/B): 45.86
• Price to Sales (P/S): 2.23
• P/FCF Ratio: 386.51
• 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): 0.01
• Revenue Forecast (FY): HK$3.33B

• Rating: 38 Underperform
• Price Target: HK$3.00 ▼(-17.36% Downside)

Fangzhou Inc. faces significant financial challenges with persistent losses and high leverage, reflected in a low financial performance score. The technical analysis indicates a strong bearish trend, and the valuation is unattractive due to a negative P/E ratio and lack of dividends. These factors contribute to a low overall stock score.

Positive Factors

Revenue Growth

Fangzhou Inc.'s positive revenue growth suggests expanding market reach and product adoption, which are crucial for long-term business sustainability and competitiveness in the tech industry.

Cash Management

Improved operating cash flow indicates better cash management and operational efficiency, providing the company with more financial flexibility to invest in growth opportunities.

Strategic Partnerships

Strategic partnerships with other tech firms bolster Fangzhou's product offerings and market reach, fostering innovation and competitive advantage in the tech sector.

Negative Factors

High Leverage

High leverage poses a risk to financial stability, potentially limiting Fangzhou's ability to invest in growth and increasing vulnerability to economic downturns.

Persistent Losses

Ongoing losses and negative margins indicate challenges in achieving profitability, which could hinder long-term sustainability and investor confidence.

Financial Instability

Financial instability, as indicated by negative equity and high debt levels, may restrict Fangzhou's growth potential and ability to weather financial challenges.

Fangzhou Inc. Business Overview & Revenue Model

Company Description

Fangzhou Inc. (6086) is a dynamic company operating primarily in the technology sector, specializing in the development and provision of innovative software solutions and IT services. The company offers a range of core products that include cloud computing services, cybersecurity solutions, and enterprise software applications, catering to a diverse clientele that spans various industries. With a commitment to leveraging cutting-edge technology, Fangzhou Inc. aims to enhance operational efficiency and drive digital transformation for its customers.

How the Company Makes Money

Fangzhou Inc. generates revenue through multiple streams, primarily by selling software licenses and subscriptions for its enterprise software products. The company also earns significant income from its cloud computing services, which include hosting and data storage solutions for businesses. Additionally, Fangzhou provides managed IT services and cybersecurity consulting, contributing to its overall revenue. Strategic partnerships with other technology firms enhance Fangzhou's offerings and expand its market reach, while a focus on long-term contracts with clients ensures a steady flow of income. The company also benefits from ongoing maintenance and support agreements, which provide recurring revenue streams.

Fangzhou Inc. Financial Statement Overview

Summary

Fangzhou Inc. is facing financial difficulties with persistent losses and high leverage. While there are signs of revenue growth and improved cash management, the company needs to address its profitability and balance sheet stability to enhance its financial health.

Income Statement

Fangzhou Inc. shows a challenging financial performance with consistent net losses and negative EBIT and EBITDA margins over the years. The gross profit margin has slightly improved, but the net profit margin remains negative. Revenue growth is positive, indicating potential, but profitability remains a significant concern.

Balance Sheet

The balance sheet reflects a high debt burden relative to equity, as indicated by the negative stockholders' equity and high debt-to-equity ratio. The equity ratio is low, suggesting financial instability. However, the reduction in total liabilities and improvement in cash and cash equivalents are positive signs.

Cash Flow

Operating cash flow has improved, turning positive in the latest year, which is a positive development. However, free cash flow remains low, and the cash flow ratios indicate a struggle to convert income into cash. The company has managed to improve its cash position, but overall cash flow stability is weak.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	2.88B	2.71B	2.43B	2.20B	1.76B
Gross Profit	518.72M	515.94M	487.41M	441.20M	262.74M
EBITDA	7.47M	-739.87M	-174.76M	-123.00M	-220.66M
Net Income	-23.68M	-854.88M	-196.79M	-383.30M	-303.96M
Balance Sheet
Total Assets	768.78M	664.09M	521.37M	582.57M	426.54M
Cash, Cash Equivalents and Short-Term Investments	294.17M	261.51M	146.32M	134.91M	84.66M
Total Debt	36.47M	50.89M	49.72M	1.99B	18.27M
Total Liabilities	618.79M	532.39M	2.42B	2.50B	2.07B
Stockholders Equity	149.99M	131.70M	-1.90B	-1.92B	-1.34B
Cash Flow
Free Cash Flow	-13.17M	15.63M	16.63M	-65.42M	-262.72M
Operating Cash Flow	-11.82M	19.54M	22.28M	-59.28M	-246.43M
Investing Cash Flow	-108.95M	-111.51M	16.42M	14.31M	-4.32M
Financing Cash Flow	156.66M	119.62M	-29.31M	82.23M	-11.41M

Fangzhou Inc. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.63
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:6086, the sentiment is Negative. The current price of 3.63 is above the 20-day moving average (MA) of 3.00, above the 50-day MA of 3.37, and below the 200-day MA of 3.94, indicating a bearish trend. The MACD of -0.15 indicates Negative momentum. The RSI at 35.14 is Neutral, neither overbought nor oversold. The STOCH value of 17.79 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:6086.

Fangzhou Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1666	68 Neutral	$5.97B	12.84	5.98%	4.30%	0.73%	-34.04%
1093	63 Neutral	$84.55B	20.34	11.30%	3.13%	-18.07%	-33.27%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
2186	58 Neutral	$12.49B	27.99	2.85%	―	-2.54%	-48.74%
1799	45 Neutral	HK$11.28B	-3.18	-9.60%	―	-32.90%	-152.00%
0020	41 Neutral	HK$82.76B	-21.21	-14.61%	―	17.96%	46.64%
6086	38 Underperform	HK$3.85B	―	―	―	―	―

Fangzhou Inc. Corporate Events

Fangzhou Inc. Unveils AI Innovations and Strategic Partnerships at Healthcare Conference

Fangzhou Inc. announced significant developments at its 10th H2H Healthcare Ecosystem Conference, including the launch of its ‘XingShi’ Large Language Model, which underpins various AI-driven healthcare applications. The company also revealed strategic partnerships with Innovent Biologics and Zhejiang Otsuka Pharmaceutical to integrate digital health solutions with weight-management therapies and develop comprehensive digital solutions, respectively. Despite recent share price increases, the board confirmed that there is no inside information affecting the stock market, advising caution to shareholders and investors.