Zuoli Kechuang Micro-finance Co. Ltd. Class H (6866) AI Stock Analysis

• Market Cap: HK$407.10M
• Dividend Yield: 4.88%
• Average Volume (3M): 162.27K
• Price to Earnings (P/E): 6.7
• Beta (1Y): 0.10
• Revenue Growth: -12.94%
• EPS Growth: -15.93%
• Country: HK
• Employees: 77
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): 0.02
• Shares Outstanding: 300,000,000
• 10 Day Avg. Volume: 54,000
• 30 Day Avg. Volume: 162,266
• PEG Ratio: -0.16
• Price to Book (P/B): 0.16
• Price to Sales (P/S): 2.60
• P/FCF Ratio: 2.00
• 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): N/A
• Revenue Forecast (FY): N/A

• Rating: 69 Neutral
• Price Target: HK$0.36 ▲(28.93% Upside)

The score is driven by attractive valuation (low P/E and ~4.21% yield) and supportive technical momentum (price above key moving averages with positive MACD). Financial performance is mixed: strong margins and improved leverage are outweighed by persistent revenue contraction, weaker ROE, and some cash flow volatility.

Positive Factors

Profitability

High net profit margins indicate strong operational efficiency and the ability to generate significant profit from revenues, supporting long-term financial health.

Leverage Management

Improving leverage ratios suggest prudent financial management, reducing risk and enhancing financial stability over the long term.

Cash Flow Management

Strong cash flow management ensures liquidity and the ability to fund operations and investments, supporting sustainable growth.

Negative Factors

Revenue Decline

Persistent revenue decline indicates challenges in market demand or competitive positioning, potentially impacting long-term growth prospects.

Declining ROE

Declining ROE suggests reduced efficiency in generating returns on shareholder equity, which could deter investment and limit growth.

Earnings Pressure

Falling net income reflects operational challenges and could constrain reinvestment in growth initiatives, impacting future profitability.

Zuoli Kechuang Micro-finance Co. Ltd. Class H Business Overview & Revenue Model

Company Description

Zuoli Kechuang Micro-finance Company Limited operates as a microfinance company in the People's Republic of China. The company offers unsecured, guaranteed, collateralized, and pledged loans; enterprise loans, including agriculture loans and technology enterprises credit loans, as well as loans for other small and medium-sized enterprises and microenterprises; individual business, start-up, and other loans; and Internet micro-loans. The company was formerly known as Deqing Zuoli Kechuang Micro-finance Company Limited and changed its name to Zuoli Kechuang Micro-Finance Company Limited in April 2014. Zuoli Kechuang Micro-finance Company Limited was founded in 2011 and is headquartered in Huzhou, the People's Republic of China.

How the Company Makes Money

Zuoli Kechuang Micro-finance Co. Ltd. makes money by earning interest on the loans it provides to its clients, which include small and medium-sized enterprises and individual entrepreneurs. The company charges interest on both secured and unsecured loans, with interest rates determined by the risk profile of the borrower and prevailing market conditions. Additionally, the company may earn revenue from loan-related fees, such as origination fees, processing fees, and late payment penalties. Zuoli Kechuang Micro-finance may also benefit from partnerships with banks or financial institutions for funding and risk-sharing purposes, which can enhance its lending capacity and reduce operational risks.

Zuoli Kechuang Micro-finance Co. Ltd. Class H Financial Statement Overview

Summary

Zuoli Kechuang Micro-finance Co. Ltd. shows a robust balance sheet with low leverage and high equity ratio, indicative of financial stability. However, the declining revenue and profitability margins signal potential challenges in maintaining growth and profitability. Cash flow volatility further underscores the need for a cautious approach in financial management.

Income Statement

The company's revenue has been declining over the past years, with a revenue growth rate of -36.55% from 2022 to 2023 and -36.53% from 2023 to 2024. The gross profit margin remains strong at 100%, indicating good cost control. However, the net profit margin decreased from 47.48% in 2023 to 50.44% in 2024. The EBIT margin remains healthy, though it declined from 76.89% in 2022 to 68% in 2024.

Balance Sheet

The company maintains a strong equity position with an equity ratio of 76.93% in 2024, showcasing a solid balance sheet with low leverage. The debt-to-equity ratio improved to 0.23 in 2024 from 0.31 in 2023, indicating reduced financial risk. Return on equity decreased slightly to 3.15% in 2024, reflecting a drop in profitability.

Cash Flow

Operating cash flow has been volatile, with a significant decline from 2023 to 2024. Free cash flow also decreased by 43.53% from 2023 to 2024. The operating cash flow to net income ratio is strong at 2.58 in 2024, but the free cash flow to net income ratio has dropped to 2.58, indicating potential cash flow challenges.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	131.12M	123.77M	195.08M	180.61M	199.13M	212.08M
Gross Profit	129.74M	123.77M	195.08M	208.27M	251.94M	212.08M
EBITDA	36.58M	96.77M	0.00	140.73M	181.41M	0.00
Net Income	49.40M	62.44M	92.65M	93.34M	116.49M	110.24M
Balance Sheet
Total Assets	2.52B	2.58B	2.66B	2.79B	2.65B	2.60B
Cash, Cash Equivalents and Short-Term Investments	10.28M	10.52M	17.48M	16.59M	42.68M	78.23M
Total Debt	446.97M	463.26M	596.46M	761.88M	649.97M	663.06M
Total Liabilities	459.56M	537.41M	654.60M	826.12M	722.59M	755.45M
Stockholders Equity	2.00B	1.98B	1.94B	1.90B	1.86B	1.75B
Cash Flow
Free Cash Flow	0.00	160.85M	284.92M	-5.50M	69.12M	142.81M
Operating Cash Flow	0.00	160.85M	284.95M	-5.46M	70.28M	148.84M
Investing Cash Flow	0.00	58.00K	96.00K	-26.00K	118.00K	-7.04M
Financing Cash Flow	0.00	-167.85M	-284.04M	-19.51M	-104.22M	-118.83M

Zuoli Kechuang Micro-finance Co. Ltd. Class H Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.28
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:6866, the sentiment is Positive. The current price of 0.28 is below the 20-day moving average (MA) of 0.29, below the 50-day MA of 0.29, and below the 200-day MA of 0.29, indicating a bullish trend. The MACD of 0.01 indicates Negative momentum. The RSI at 70.06 is Negative, neither overbought nor oversold. The STOCH value of 67.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:6866.

Zuoli Kechuang Micro-finance Co. Ltd. Class H Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1577	80 Outperform	HK$680.00M	6.20	8.46%	5.46%	-24.04%	60.24%
1669	71 Outperform	HK$380.00M	7.76	5.24%	5.43%	-1.47%	2.86%
6866	69 Neutral	HK$407.10M	6.74	2.75%	4.88%	-12.94%	-15.93%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
1563	59 Neutral	HK$290.84M	21.00	0.49%	―	8.77%	-76.88%
1543	55 Neutral	HK$398.00M	8.92	2.04%	6.48%	-15.82%	2.51%

Zuoli Kechuang Micro-finance Co. Ltd. Class H Corporate Events

Zuoli Kechuang to Surrender Parent-Level Micro-Finance License and Rebrand as Holding Company

Zuoli Kechuang Micro-finance Company Limited plans to surrender the micro-finance license held at the listed parent-company level and formally reposition itself as a general holding company, while keeping the micro-finance license and operating activities concentrated in its main subsidiary, Deqing Jinhui Micro-finance Company Limited. Subject to regulatory approval from the Zhejiang Provincial Financial Bureau, the move will be accompanied by a change of company name and business scope, aiming to eliminate overlapping licensing and management structures, streamline operations, comply with PRC naming rules on the use of “micro-finance,” and ultimately enhance efficiency and shareholder value.

The most recent analyst rating on (HK:6866) stock is a Hold with a HK$0.32 price target. To see the full list of analyst forecasts on Zuoli Kechuang Micro-finance Co. Ltd. Class H stock, see the HK:6866 Stock Forecast page.

Zuoli Kechuang Reports Decrease in Nine-Month Profit for 2025

Zuoli Kechuang Micro-finance Co. Ltd. announced its unaudited consolidated results for the nine months ending September 30, 2025, showing a decrease in profit compared to the previous year. The company reported a net interest income of RMB 110,597,000 and a profit of RMB 53,689,000, reflecting a decline in interest income and increased impairment losses, which may impact its financial stability and stakeholder confidence.

Zuoli Kechuang Micro-finance Schedules Board Meeting for Q3 Results

Zuoli Kechuang Micro-finance Co. Ltd. has announced a board meeting scheduled for October 28, 2025, to consider and approve the unaudited consolidated third quarterly results for the nine months ending September 30, 2025. This announcement indicates the company’s ongoing commitment to transparency and timely financial reporting, which could impact its stakeholders’ confidence and market positioning.