Simplicity Holding Ltd. (8367) AI Stock Analysis

• Market Cap: HK$30.24M
• Dividend Yield: N/A
• Average Volume (3M): 116.22K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.56
• Revenue Growth: 2.67%
• EPS Growth: -264.58%
• Country: HK
• Employees: 116
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Restaurants
• EPS (TTM): -0.13
• Shares Outstanding: 82,849,980
• 10 Day Avg. Volume: 186,850
• 30 Day Avg. Volume: 116,216
• PEG Ratio: <0.01
• Price to Book (P/B): 1.19
• Price to Sales (P/S): 0.21
• P/FCF Ratio: 22.51
• 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: 44 Neutral
• Price Target: HK$0.36 ▲(1.11% Upside)

The overall stock score is primarily influenced by financial performance challenges, including negative profit margins and declining cash flow. Technical analysis provides some positive signals, but the overbought RSI suggests caution. Valuation metrics are poor due to negative profitability and lack of dividends, further impacting the score.

Positive Factors

Revenue Growth

Simplicity Holding Ltd.'s revenue growth indicates potential recovery and expansion in its market segments, which can lead to improved financial performance if sustained.

Business Model Strength

Simplicity Holding Ltd.'s strategy of acquiring high-growth potential businesses positions it to capitalize on emerging trends, enhancing long-term value creation and competitiveness.

Strategic Partnerships

Strategic partnerships allow Simplicity Holding Ltd. to leverage industry expertise and access new technologies, driving innovation and growth across its portfolio.

Negative Factors

Profitability Challenges

Simplicity Holding Ltd.'s negative profitability metrics highlight significant challenges in cost management and operational efficiency, impacting long-term financial health.

Cash Flow Issues

The decline in free cash flow growth suggests difficulties in generating cash from operations, which can constrain investment and growth opportunities.

Poor Returns on Equity

Negative return on equity reflects inefficiencies in using shareholder capital, indicating a need for strategic improvements to enhance shareholder value.

Simplicity Holding Ltd. Business Overview & Revenue Model

Company Description

Simplicity Holding Limited, an investment holding company, operates casual dining full service restaurants in Hong Kong. It also engages in the property investment activities. As of March 31, 2022, the company operates 7 restaurants under the Marsino, Grand Avenue, and Baba Nyonya brands. In addition, it operates drug vending machines. The company was founded in 2003 and is headquartered in Kwai Chung, Hong Kong. Simplicity Holding Limited is a subsidiary of Marvel Jumbo Limited.

How the Company Makes Money

Simplicity Holding Ltd. generates revenue through multiple streams, primarily from its investments in various technology companies and the provision of digital services. Key revenue streams include returns on investments from its portfolio companies, licensing fees from proprietary software, and service fees from consulting engagements. The company has established strategic partnerships with industry leaders and startups, allowing it to tap into emerging market trends and technologies, thereby driving growth and enhancing its earning potential. Additionally, its focus on operational excellence within its subsidiaries contributes to increased profitability and shareholder value.

Simplicity Holding Ltd. Financial Statement Overview

Summary

Simplicity Holding Ltd. faces significant financial challenges, particularly in profitability and cash flow management. While there is some revenue growth, the company struggles with negative profit margins and declining cash flow. The balance sheet shows moderate leverage but poor returns on equity. Overall, the company needs to focus on improving profitability and cash flow to enhance financial health.

Income Statement

The company has shown some revenue growth with an 8.29% increase in the latest year, indicating potential recovery. However, profitability metrics are concerning, with a negative net profit margin of -21.33% and a negative EBIT margin of -20.44%. The gross profit margin is relatively low at 29.87%, suggesting challenges in cost management. Overall, while there is revenue growth, the company struggles with profitability.

Balance Sheet

The debt-to-equity ratio has improved from previous years but remains moderate at 0.82, indicating manageable leverage. However, the return on equity is negative at -118.90%, reflecting poor profitability relative to shareholder equity. The equity ratio is not explicitly calculated, but the balance sheet shows a need for improved financial stability.

Cash Flow

The cash flow situation is challenging, with a significant decline in free cash flow growth at -91.10%. The operating cash flow to net income ratio is low at 0.27, indicating limited cash generation from operations relative to net income. The free cash flow to net income ratio is also low at 0.07, suggesting cash flow issues despite revenue growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	97.78M	97.76M	91.85M	68.70M	85.58M	97.42M
Gross Profit	23.21M	29.20M	26.40M	1.36M	6.58M	4.15M
EBITDA	-7.92M	-9.36M	21.08M	-23.80M	19.63M	35.26M
Net Income	-20.85M	-20.85M	8.25M	-36.69M	4.01M	8.59M
Balance Sheet
Total Assets	74.09M	74.09M	69.71M	85.23M	96.79M	100.16M
Cash, Cash Equivalents and Short-Term Investments	7.14M	7.14M	11.48M	17.72M	31.90M	12.81M
Total Debt	14.30M	14.30M	16.16M	25.36M	23.49M	49.98M
Total Liabilities	56.59M	56.59M	35.27M	69.80M	54.00M	61.41M
Stockholders Equity	17.54M	17.54M	34.48M	15.46M	42.82M	38.79M
Cash Flow
Free Cash Flow	927.00K	927.00K	5.79M	4.63M	929.00K	8.73M
Operating Cash Flow	12.68M	12.68M	9.13M	4.65M	976.00K	8.96M
Investing Cash Flow	-10.88M	-10.88M	-2.11M	-8.31M	45.61M	14.75M
Financing Cash Flow	-3.60M	-3.60M	-14.02M	-12.70M	-27.52M	-13.89M

Simplicity Holding Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.36
• 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:8367, the sentiment is Positive. The current price of 0.36 is below the 20-day moving average (MA) of 0.37, above the 50-day MA of 0.34, and above the 200-day MA of 0.30, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 54.42 is Neutral, neither overbought nor oversold. The STOCH value of 61.90 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:8367.

Simplicity Holding Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
8096	49 Neutral	HK$25.41M	-5.64	-27.31%	―	14.18%	42.51%
8432	49 Neutral	HK$39.57M	-4.69	-48.61%	―	1.39%	-206.25%
8510	46 Neutral	HK$39.65M	-4.06	―	―	144.78%	10.07%
8367	44 Neutral	HK$30.24M	-1.24	-120.93%	―	2.67%	-264.58%
8493	41 Neutral	HK$10.16M	-0.23	―	―	-77.80%	-586.04%
8475	38 Underperform	HK$4.70M	―	―	―	―	―