ETS Group Limited (8031) AI Stock Analysis

• Market Cap: HK$70.95M
• Dividend Yield: N/A
• Average Volume (3M): 65.13K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.22
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: HK
• Employees: 237
• Sector: Industrials
• Sector Strength: 72
• Industry: Staffing & Employment Services
• EPS (TTM): <0.01
• Shares Outstanding: 295,625,000
• 10 Day Avg. Volume: 32,800
• 30 Day Avg. Volume: 65,133
• PEG Ratio: -0.01
• Price to Book (P/B): 1.15
• Price to Sales (P/S): 0.86
• P/FCF Ratio: 5.29
• 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: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 60 Neutral
• Price Target: HK$0.19 ▼(-26.54% Downside)

ETS Group Limited's overall stock score is primarily driven by its strong financial recovery and stability, as evidenced by its financial statements. However, technical indicators suggest the stock may be overbought, and valuation metrics raise concerns due to a negative P/E ratio and lack of dividend yield. These factors collectively result in a moderate overall score.

Positive Factors

Financial Stability

Low leverage and a strong equity base reflect financial stability, reducing risk and enhancing the company's ability to invest in growth opportunities.

Cash Flow Management

Strong cash generation and efficient conversion of profits into cash indicate robust liquidity and the ability to fund operations and strategic initiatives.

Profitability Improvement

The significant improvement in net profit margin demonstrates enhanced cost management and operational efficiency, supporting long-term profitability.

Negative Factors

Modest Revenue Growth

Slow revenue growth may limit the company's ability to scale and compete effectively, potentially impacting its market position over time.

Gross Profit Margin Decline

A declining gross profit margin suggests challenges in maintaining cost efficiency, which could pressure profitability if not addressed.

Valuation Concerns

Negative P/E ratio indicates past losses and potential valuation concerns, which may affect investor confidence and the company's ability to attract capital.

ETS Group Limited Business Overview & Revenue Model

Company Description

ETS Group Limited (8031) is a diversified company operating primarily in the technology and services sectors. It focuses on providing innovative solutions in areas such as information technology, telecommunications, and digital transformation services. The company aims to enhance operational efficiency and drive digital advancements for businesses across various industries through its core products and services, which include software development, IT consulting, and managed services.

How the Company Makes Money

ETS Group Limited generates revenue through multiple streams, primarily from its consulting and managed services offerings, which account for a significant portion of its income. The company charges clients for IT consulting projects, ongoing managed services agreements, and software development services on a project basis or through retainer contracts. Additionally, ETS Group Limited may engage in partnerships with technology providers, allowing it to offer bundled solutions that enhance its service capabilities while generating recurring revenue. Strategic collaborations with other firms in the technology sector also contribute to its earnings by expanding its market reach and service offerings.

ETS Group Limited Financial Statement Overview

Summary

ETS Group Limited has demonstrated a strong recovery in 2024, with improvements across all financial statement verticals. The income statement shows a return to profitability, the balance sheet reflects financial stability with low leverage, and the cash flow statement indicates strong cash generation. While revenue growth remains modest, the overall financial health of the company is solid, positioning it well for future growth opportunities.

Income Statement

ETS Group Limited showed a significant improvement in its income statement metrics over the past year. The gross profit margin for 2024 was approximately 7.18%, a decrease from the previous year, indicating a challenge in maintaining cost efficiency. However, the net profit margin improved to 21.68% in 2024, reflecting a strong recovery from a negative margin in 2023. Revenue growth was modest at 2.55% from 2023 to 2024, suggesting stable but slow growth. The EBIT and EBITDA margins also turned positive, indicating improved operational efficiency.

Balance Sheet

The balance sheet of ETS Group Limited is strong, with a debt-to-equity ratio of 0.04 in 2024, indicating low leverage and financial stability. The return on equity (ROE) improved significantly to 28.99%, showcasing effective use of equity to generate profits. The equity ratio stood at 75.92%, reflecting a solid equity base relative to total assets. Overall, the balance sheet indicates a stable financial position with low risk.

Cash Flow

ETS Group Limited's cash flow statement shows robust performance with a significant increase in free cash flow from 2023 to 2024, resulting in a free cash flow growth rate of 197.01%. The operating cash flow to net income ratio was 0.82, indicating strong cash generation relative to profits. The free cash flow to net income ratio was 0.75, suggesting efficient conversion of profits into cash. These metrics highlight strong cash flow management and liquidity.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	42.63M	80.73M	78.72M	86.13M	98.76M	104.21M
Gross Profit	4.65M	5.80M	15.95M	-13.10M	25.26M	-12.62M
EBITDA	-245.00K	12.79M	-4.64M	-4.02M	-7.91M	7.26M
Net Income	976.00K	17.51M	-7.92M	-9.30M	-18.62M	-5.14M
Balance Sheet
Total Assets	75.67M	79.55M	55.52M	119.20M	136.64M	146.04M
Cash, Cash Equivalents and Short-Term Investments	52.55M	49.52M	26.59M	66.64M	41.94M	61.10M
Total Debt	1.54M	2.70M	536.00K	11.58M	9.13M	5.93M
Total Liabilities	14.30M	19.16M	12.63M	29.35M	37.49M	30.01M
Stockholders Equity	61.37M	60.39M	42.88M	89.85M	99.15M	116.03M
Cash Flow
Free Cash Flow	3.87M	13.14M	4.42M	24.53M	-11.08M	9.14M
Operating Cash Flow	3.87M	14.41M	5.34M	25.43M	-8.08M	10.60M
Investing Cash Flow	-32.68M	10.56M	28.57M	-21.72M	-12.86M	-2.81M
Financing Cash Flow	-1.17M	-2.04M	-53.76M	1.01M	3.19M	-6.23M

ETS Group Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.26
• 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:8031, the sentiment is Positive. The current price of 0.26 is above the 20-day moving average (MA) of 0.17, above the 50-day MA of 0.17, and above the 200-day MA of 0.17, indicating a bullish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 82.24 is Negative, neither overbought nor oversold. The STOCH value of 98.04 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:8031.

ETS Group Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
2180	73 Outperform	HK$1.07B	7.05	11.29%	36.94%	17.49%	9.67%
6100	72 Outperform	HK$1.97B	13.11	―	―	-10.48%	30250.00%
8462	66 Neutral	HK$52.80M	4.70	7.43%	―	-11.47%	5.00%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
8031	60 Neutral	HK$70.95M	-7.88	―	―	―	―
8042	59 Neutral	HK$33.60M	15.00	3.76%	―	50.80%	―
6919	46 Neutral	HK$612.17M	-10.60	-4.09%	2.25%	14.29%	-200.37%