GME Group Holdings Ltd (8188) AI Stock Analysis

• Market Cap: HK$424.66M
• Dividend Yield: 8.89%
• Average Volume (3M): 427.73K
• Price to Earnings (P/E): 5.0
• Beta (1Y): -0.23
• Revenue Growth: 48.34%
• EPS Growth: 40.71%
• Country: HK
• Employees: 588
• Sector: Industrials
• Sector Strength: 89
• Industry: Engineering & Construction
• EPS (TTM): 0.18
• Shares Outstanding: 481,900,000
• 10 Day Avg. Volume: 251,600
• 30 Day Avg. Volume: 427,733
• PEG Ratio: -0.20
• Price to Book (P/B): 0.74
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -2.42
• 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$1.00
• Price Target Upside: 11.11% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 77 Outperform
• Price Target: HK$1.00 ▲(11.11%Upside)

The stock receives a strong overall score due to its robust financial performance and attractive valuation. Technical analysis indicates positive momentum, though caution is advised due to potential overbought conditions. The main concern remains the company's cash flow challenges, which could impact future growth if not addressed.

GME Group Holdings Ltd Business Overview & Revenue Model

Company Description

GME Group Holdings Limited, an investment holding company, provides civil engineering services in Hong Kong. It provides underground construction services, which include tunnel construction, such as excavation, shotcreting, shutter design and fabrication, tunnel lining services, as well as shafts, advanced, and structural works; utility construction services; and other services comprising structural works and construction of service buildings and supports structures. The company primarily serves main contractors in public sector infrastructure projects. GME Group Holdings Limited was founded in 1994 and is headquartered in Hong Kong, Hong Kong.

How the Company Makes Money

GME Group Holdings Ltd generates revenue through contracts awarded for engineering and construction projects. The company's key revenue streams involve project-based fees for its services, which include tunnel construction and foundation works. A significant factor contributing to its earnings is the company's ability to secure contracts from government infrastructure projects and private sector developments. The revenue model is heavily reliant on successfully bidding for and executing large-scale engineering projects, which requires maintaining strong relationships with clients and stakeholders in the industry.

GME Group Holdings Ltd Financial Statement Overview

Summary

The company exhibits strong revenue and profit growth, with improving margins and efficient operations. The balance sheet is stable with low leverage and high equity returns. However, significant cash flow issues pose a risk to liquidity and future growth, necessitating improvements in cash flow management.

Income Statement

The company has demonstrated a strong revenue growth with a significant increase in total revenue from 2023 to 2024, amounting to 48.4%. Gross profit margin improved to 19.4%, and net profit margin also increased to 10.6%, indicating enhanced profitability. The EBIT margin stands at a healthy 13.3%, and the EBITDA margin is 14.3%, reflecting efficient operational management. However, past performance shows volatility in margins, requiring careful monitoring.

Balance Sheet

The balance sheet shows a solid equity position with an equity ratio of 53.7%, suggesting financial stability. The debt-to-equity ratio is 0.36, indicating a conservative debt strategy. Return on equity improved to 50.2%, showcasing effective use of equity. Despite the positive trends, maintaining low debt levels amid growth is crucial to sustain financial health.

Cash Flow

The cash flow statement reveals challenges, with operating cash flow at zero in 2024, and historical data showing negative free cash flow and operating cash flow. This highlights potential struggles in cash generation and liquidity management. The company needs to enhance cash flow operations to support its growth trajectory.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	815.18M	549.55M	440.53M	443.55M	134.57M
Gross Profit	158.15M	110.02M	13.93M	32.37M	19.56M
EBITDA	116.58M	83.98M	15.05M	19.13M	8.03M
Net Income	86.17M	61.48M	5.80M	10.45M	1.01M
Balance Sheet
Total Assets	319.56M	273.10M	156.95M	148.35M	74.08M
Cash, Cash Equivalents and Short-Term Investments	26.41M	4.47M	11.43M	5.43M	6.94M
Total Debt	62.46M	72.12M	41.30M	20.32M	5.31M
Total Liabilities	148.05M	142.03M	87.35M	84.56M	20.74M
Stockholders Equity	171.51M	130.69M	69.21M	63.40M	52.95M
Cash Flow
Free Cash Flow	105.67M	-23.61M	-21.13M	-12.97M	-7.66M
Operating Cash Flow	114.22M	-15.26M	-14.86M	-3.86M	-971.00K
Investing Cash Flow	-11.94M	-8.20M	-6.25M	-8.96M	-6.63M
Financing Cash Flow	-80.33M	16.49M	27.10M	11.31M	-2.83M

GME Group Holdings Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.90
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:8188, the sentiment is Positive. The current price of 0.9 is above the 20-day moving average (MA) of 0.86, above the 50-day MA of 0.78, and above the 200-day MA of 0.50, indicating a bullish trend. The MACD of 0.02 indicates Positive momentum. The RSI at 64.62 is Neutral, neither overbought nor oversold. The STOCH value of 65.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:8188.

GME Group Holdings Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8188	77 Outperform	HK$424.66M	4.96	57.03%	8.89%	48.34%	40.71%
Sector *	67 Neutral	£2.81B	10.38	4.69%	3.47%	2.40%	-24.53%
1183		HK$445.84M	―	-0.83%	―	―	―
1556	79 Outperform	HK$517.50M	4.07	16.58%	5.88%	17.12%	5.48%
1447	72 Outperform	HK$224.00M	8.21	7.49%	14.29%	19.67%	9.64%
6063	72 Outperform	HK$354.00M	110.63	2.51%	―	36.77%	―
1746	42 Neutral	HK$270.00M	―	-5.03%	―	-14.18%	-1085.71%