Cheerwin Group Limited (6601) AI Stock Analysis

• Market Cap: HK$3.24B
• Dividend Yield: 5.9%
• Average Volume (3M): 1.10M
• Price to Earnings (P/E): 15.3
• Beta (1Y): 0.55
• Revenue Growth: 9.72%
• EPS Growth: -10.15%
• Country: HK
• Employees: 1,202
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Household & Personal Products
• EPS (TTM): 0.14
• Shares Outstanding: 1,333,333,500
• 10 Day Avg. Volume: 836,600
• 30 Day Avg. Volume: 1,099,000
• PEG Ratio: 0.72
• Price to Book (P/B): 0.75
• Price to Sales (P/S): 1.24
• P/FCF Ratio: -425.06
• 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: HK$4.35
• Price Target Upside: 85.90% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 1.23
• Revenue Forecast (FY): HK$15.33B

• Rating: 74 Outperform
• Price Target: HK$2.50 ▲(6.84% Upside)

Cheerwin Group Limited's strong financial position and attractive valuation are the most significant factors, offset by challenges in cash flow management. Technical indicators suggest neutral momentum, neither strongly positive nor negative.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective sales strategies, supporting long-term business expansion.

Balance Sheet Strength

A strong balance sheet with low leverage enhances financial stability and provides flexibility for future investments.

Brand Recognition

Strong brand recognition supports competitive pricing and customer retention, driving sustained revenue and market presence.

Negative Factors

Cash Flow Challenges

Declining cash flow generation could limit operational flexibility and investment capacity if not addressed.

EBIT Margin Decline

A declining EBIT margin suggests rising operational costs, which may affect profitability if not managed effectively.

EPS Growth Decline

Negative EPS growth reflects challenges in profit generation, potentially impacting investor confidence and valuation.

Cheerwin Group Limited Business Overview & Revenue Model

Company Description

Cheerwin Group Limited (6601) is a leading enterprise engaged in the research, development, and manufacture of consumer products, primarily focusing on household cleaning and personal care items. The company operates across several sectors, including home care, pet care, and health and wellness, offering a diverse portfolio of brands that cater to both domestic and international markets. Its core products include detergents, disinfectants, and personal hygiene products, which are designed to meet the evolving needs of consumers.

How the Company Makes Money

Cheerwin Group Limited generates revenue primarily through the sale of its consumer products across various retail channels, including supermarkets, e-commerce platforms, and direct sales. The company's revenue model is largely driven by its strong brand recognition and customer loyalty, allowing it to maintain competitive pricing while maximizing sales volume. Key revenue streams include the sale of household cleaning products, personal care items, and pet care solutions. Additionally, Cheerwin has established strategic partnerships with major retailers and distributors, enhancing its market reach and distribution efficiency. The company also invests in marketing and innovation to develop new products and improve existing ones, which contributes to its overall earnings.

Cheerwin Group Limited Financial Statement Overview

Summary

Cheerwin Group Limited shows strong revenue growth and a solid equity structure with minimal debt, indicating low financial risk. However, the decline in cash flow generation poses a potential risk that needs addressing to sustain operational flexibility.

Income Statement

The income statement shows a positive trend with revenue growing from 2023 to 2024 by approximately 12.7%. Gross and net profit margins are stable with the gross profit margin at 49.1% and net profit margin at 11.2% in 2024. However, EBIT margin decreased slightly from 8.2% in 2023 to 7.0% in 2024. These figures indicate a strong revenue base with room for efficiency improvements in operating expenses.

Balance Sheet

The balance sheet reflects a solid equity position with a high equity ratio of 78.7%. The debt-to-equity ratio remains very low at 0.02, indicating low leverage and minimal financial risk. Return on equity improved to 6.8% in 2024, showcasing effective use of shareholder funds to generate profit. Overall, the balance sheet is strong, indicating financial stability and low risk.

Cash Flow

The cash flow statement reveals challenges with operating cash flow at zero in 2024, down from 326.9 million in 2023. Free cash flow also dropped to zero, indicating a need for improvements in cash management. Despite this, the company's cash reserves remain robust, providing a buffer. The lack of positive cash flow may pose a risk if not addressed in future periods.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.91B	1.82B	1.62B	1.44B	1.77B	1.70B
Gross Profit	975.12M	894.34M	718.26M	599.81M	787.43M	742.58M
EBITDA	169.91M	183.84M	254.24M	119.44M	107.20M	295.85M
Net Income	197.48M	203.38M	175.02M	66.10M	92.09M	223.78M
Balance Sheet
Total Assets	3.68B	3.80B	3.84B	3.57B	3.42B	1.61B
Cash, Cash Equivalents and Short-Term Investments	2.64B	2.87B	2.77B	2.72B	2.67B	884.77M
Total Debt	50.57M	49.48M	28.02M	16.61M	14.91M	306.88M
Total Liabilities	624.31M	812.47M	898.67M	753.16M	687.39M	1.36B
Stockholders Equity	3.06B	2.99B	2.93B	2.81B	2.73B	247.68M
Cash Flow
Free Cash Flow	162.84M	-5.30M	311.60M	54.96M	-241.35M	402.49M
Operating Cash Flow	169.06M	9.35M	326.92M	66.76M	-191.90M	438.33M
Investing Cash Flow	-34.55M	-190.25M	-43.93M	-1.29B	-199.92M	-142.67M
Financing Cash Flow	-167.16M	-185.63M	-93.63M	-105.53M	2.08B	124.42M

Cheerwin Group Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.34
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:6601, the sentiment is Positive. The current price of 2.34 is above the 20-day moving average (MA) of 2.27, above the 50-day MA of 2.26, and below the 200-day MA of 2.38, indicating a bullish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 70.12 is Negative, neither overbought nor oversold. The STOCH value of 90.90 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:6601.

Cheerwin Group Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6601	74 Outperform	HK$3.24B	15.25	6.65%	5.90%	9.72%	-10.15%
1044	73 Outperform	HK$31.41B	12.77	10.69%	5.36%	-3.48%	-24.11%
2023	66 Neutral	HK$368.85M	6.57	10.92%	―	11.10%	-4.38%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
3332	62 Neutral	HK$631.85M	20.32	3.92%	―	-0.92%	-71.88%
2145	61 Neutral	HK$31.55B	30.45	39.62%	2.53%	20.78%	18.37%
6993	43 Neutral	HK$15.83B	-28.59	-6.08%	5.00%	2.79%	-170.67%

Cheerwin Group Limited Corporate Events

Cheerwin Announces RMB450 Million Major Acquisition Approved by Controlling Shareholder

Cheerwin Group Limited has agreed, via a wholly owned subsidiary, to acquire the entire equity interests of a target company for a maximum consideration of RMB450 million (approximately HK$495 million), after which the target will become an indirect wholly owned subsidiary and its financial results will be consolidated into Cheerwin’s accounts. The acquisition qualifies as a major transaction under Hong Kong listing rules, and while it has been approved by written consent from the controlling shareholder holding 74.25% of issued shares, the deal remains subject to satisfaction or waiver of several conditions, with a circular to be sent to shareholders outlining details, leaving investors advised to exercise caution as the transaction may or may not proceed.

The most recent analyst rating on (HK:6601) stock is a Buy with a HK$2.50 price target. To see the full list of analyst forecasts on Cheerwin Group Limited stock, see the HK:6601 Stock Forecast page.