Capital Finance Holdings Limited (8239) AI Stock Analysis

• Market Cap: HK$1.04B
• Dividend Yield: N/A
• Average Volume (3M): 258.18K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.29
• Revenue Growth: 26.82%
• EPS Growth: 68.75%
• Country: HK
• Employees: 39
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Credit Services
• EPS (TTM): N/A
• Shares Outstanding: 93,841,460
• 10 Day Avg. Volume: 266,641
• 30 Day Avg. Volume: 258,175
• PEG Ratio: -0.05
• Price to Book (P/B): 1.26
• Price to Sales (P/S): 2.65
• P/FCF Ratio: 2.19
• 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: 45 Neutral
• Price Target: HK$10.50 ▲(9.60% Upside)

The score is held down primarily by weak financial performance (steep revenue decline, large losses, and missing 2024 operating/free cash flow) and a negative P/E that reflects ongoing unprofitability. More supportive technical momentum provides some offset but is not strong enough to overcome the fundamental risks.

Positive Factors

Diversified revenue streams

Multiple revenue channels (personal loans, business loans, investment management fees and partner distribution) provide structural diversification. This reduces concentration risk, supports cross-selling, and can stabilize earnings volatility over a multi-month horizon even if one segment softens.

High gross profit margin

A 72% gross margin indicates strong underlying pricing power or lending yields before overhead and credit loss provisioning. That gross profitability provides a durable buffer to absorb operating costs or higher credit charges, supporting margin recovery if revenue stabilizes.

Trend of reduced leverage

Evidence of declining debt levels and a 25.4% equity ratio point to improving balance sheet structure. Lower leverage reduces insolvency risk and borrowing costs, improving financial flexibility and resilience over several months if management sustains the deleveraging trend.

Negative Factors

Sharp revenue decline

A near-50% revenue drop compresses scale economics and weakens the company’s ability to cover fixed costs and fund growth. Such a pronounced top-line contraction undermines sustainable profitability and heightens execution risk over the medium term absent a clear revenue recovery plan.

No operating or free cash flow in 2024

An absence of operating and free cash flow is a material liquidity concern, forcing reliance on external financing or asset sales to fund operations. Over months this limits reinvestment capacity and increases refinancing and solvency risk unless cash generation reverses.

Deep unprofitability and negative ROE

Extremely negative margins and negative ROE signal persistent loss-making operations that erode equity and investor confidence. Continued losses impair capital raising, constrain strategic options, and threaten long-term viability unless profitability is restored.

Capital Finance Holdings Limited Business Overview & Revenue Model

Company Description

Capital Finance Holdings Limited, an investment holding company, provides short-term financing services in China and Hong Kong. It offers pawn and entrusted loans, micro-financing services, financial consultancy, and distressed debt assets management services. The company was formerly known as Ming Kei Holdings Limited and changed its name to Capital Finance Holdings Limited in November 2014. Capital Finance Holdings Limited is headquartered in Tsim Sha Tsui, Hong Kong.

How the Company Makes Money

Capital Finance Holdings Limited generates revenue through multiple channels, primarily by charging interest on loans provided to consumers and businesses. The company has a diversified portfolio that includes personal loans, which typically carry higher interest rates, and business loans that may involve larger sums with varying terms. Additionally, the company earns fees from its investment management services, which include advisory fees and performance-based fees from managed investment products. Partnerships with financial institutions and other service providers enhance their product offerings, allowing them to reach a broader customer base and increase their earnings through cross-selling opportunities. Factors such as market demand for credit, interest rate fluctuations, and the overall economic environment significantly influence the company's profitability.

Capital Finance Holdings Limited Financial Statement Overview

Summary

Weak financial profile: revenue fell sharply from 2023 to 2024, profitability is deeply negative (net margin -89.64%), and operating performance deteriorated. Balance sheet leverage remains a concern with negative ROE, and the absence of operating/free cash flow in 2024 raises added liquidity risk.

Income Statement

The income statement shows a concerning decline in revenue from 2023 to 2024, with a sharp decrease from $36.23 million to $18.86 million. The gross profit margin remains relatively high at 72.14% in 2024, but the company is operating at a loss with a negative net profit margin of -89.64%. EBIT and EBITDA margins have also deteriorated, reflecting significant operational challenges.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio due to substantial liabilities compared to equity, though debt has decreased over time. The equity ratio is 25.40%, indicating moderate reliance on equity financing. However, the company has struggled to generate positive returns on equity, with ROE being negative due to consecutive net losses.

Cash Flow

The cash flow statement indicates instability, with no operating or free cash flow reported in 2024. In previous years, free cash flow was positive, but the absence of cash flow in the most recent year raises concerns about liquidity and the ability to sustain operations without external financing.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	27.39M	18.86M	36.23M	1.51M	2.16M	2.81M
Gross Profit	33.45M	13.61M	33.63M	-24.17M	-37.41M	-46.31M
EBITDA	10.17M	-9.27M	6.00M	26.37M	33.44M	-25.25M
Net Income	-13.02M	-16.91M	-8.82M	-7.63M	-19.02M	-75.95M
Balance Sheet
Total Assets	150.42M	155.65M	219.25M	294.86M	416.50M	470.75M
Cash, Cash Equivalents and Short-Term Investments	84.50M	72.24M	93.18M	105.73M	101.53M	156.06M
Total Debt	75.20M	76.30M	117.17M	180.27M	286.82M	433.81M
Total Liabilities	83.16M	83.50M	129.74M	193.54M	298.64M	444.73M
Stockholders Equity	32.89M	39.52M	51.14M	60.25M	75.00M	-20.99M
Cash Flow
Free Cash Flow	16.62M	22.76M	52.68M	88.62M	36.87M	-284.00K
Operating Cash Flow	16.89M	23.03M	52.84M	88.70M	37.01M	1.50M
Investing Cash Flow	1.78M	-273.00K	2.82M	11.93M	8.48M	-12.07M
Financing Cash Flow	-13.88M	-41.12M	-65.16M	-85.48M	-92.01M	-96.74M

Capital Finance Holdings Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 9.58
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:8239, the sentiment is Positive. The current price of 9.58 is below the 20-day moving average (MA) of 10.13, below the 50-day MA of 10.11, and above the 200-day MA of 5.63, indicating a bullish trend. The MACD of 0.23 indicates Negative momentum. The RSI at 61.78 is Neutral, neither overbought nor oversold. The STOCH value of 89.19 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:8239.

Capital Finance Holdings Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
8621	65 Neutral	HK$40.32M	-0.99	-21.16%	―	-31.28%	-400.00%
8019	54 Neutral	HK$68.72M	10.92	2.03%	―	-13.23%	―
8239	45 Neutral	HK$1.04B	-81.99	-35.17%	―	26.82%	68.75%
0736	44 Neutral	HK$198.77M	-7.23	-4.78%	―	-31.23%	33.60%
0379	42 Neutral	HK$107.99M	-1.42	-21.07%	―	25.64%	-25.07%