Simplicity Holding Ltd. (8367) AI Stock Analysis

• Market Cap: HK$18.64M
• Dividend Yield: N/A
• Average Volume (3M): 36.42K
• Price to Earnings (P/E): 1.6
• Beta (1Y): -0.38
• Revenue Growth: 4.39%
• EPS Growth: N/A
• Country: HK
• Employees: 116
• Sector: Consumer Cyclical
• Sector Strength: 68
• Industry: Restaurants
• EPS (TTM): -0.34
• Shares Outstanding: 69,049,990
• 10 Day Avg. Volume: 53,000
• 30 Day Avg. Volume: 36,416
• PEG Ratio: -0.92
• Price to Book (P/B): 11.19
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 1.82
• 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

• Rating: 74 Outperform
• Price Target: ―

Simplicity Holding Ltd. receives a strong overall score due to solid financial performance, characterized by improved profitability, reduced leverage, and enhanced cash flow. Technical indicators suggest positive market momentum, supporting the stock's upward trend. The stock's low P/E ratio indicates it is undervalued, offering substantial growth potential. However, previous financial volatility and the lack of a dividend yield are factors to consider.

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 primarily through the operation of its casual dining restaurant chain. The company's key revenue streams include dine-in services, takeaway, and delivery options. By offering a wide array of menu items that cater to different customer preferences, the company maximizes its reach and customer engagement. Additionally, Simplicity Holding Ltd. may leverage partnerships with food delivery platforms to expand its accessibility and increase sales. Factors such as location, menu diversity, and customer loyalty programs also contribute to the company's earnings.

Simplicity Holding Ltd. Financial Statement Overview

Summary

Simplicity Holding Ltd. shows strong recovery and growth. The income statement highlights significant improvements in profitability and growth. The balance sheet indicates reduced leverage and higher profitability, though the equity proportion in assets has decreased. Cash flow analysis shows improved cash generation, but historical volatility suggests risks in sustaining positive cash generation.

Income Statement

Simplicity Holding Ltd. has demonstrated significant improvement in its income statement over the past year. The Gross Profit Margin improved to 24.01% from 1.98% last year, indicating better cost management. The Net Profit Margin also turned positive to 8.98% from a negative margin last year, showing a successful turnaround in profitability. Revenue increased by 33.71% year-over-year, reflecting strong growth. Both EBIT and EBITDA margins turned positive, indicating improved operational efficiency. However, previous years showed volatility, suggesting potential risks in maintaining this trajectory.

Balance Sheet

The balance sheet of Simplicity Holding Ltd. shows improvements, with a stronger equity position as Stockholders' Equity grew to HKD 34.48 million. The Debt-to-Equity Ratio decreased to 0.47, reflecting lower leverage and reduced financial risk. ROE improved significantly to 23.92%, highlighting enhanced profitability relative to equity. However, the Equity Ratio decreased to 49.45%, indicating a lower percentage of assets financed by equity compared to previous years, which could pose risks if asset values fluctuate.

Cash Flow

Cash flow analysis indicates an improvement in operational cash generation, with Operating Cash Flow increasing to HKD 9.13 million. The Free Cash Flow also grew from HKD 4.63 million to HKD 5.80 million, signifying better cash management and investment capacity. The Operating Cash Flow to Net Income Ratio is positive, indicating efficient cash conversion from profits. However, Free Cash Flow growth is moderate, and previous fluctuations in cash flows suggest some risks in maintaining consistent cash generation.

Breakdown	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	91.85M	68.70M	85.58M	97.42M	116.42M
Gross Profit	26.40M	1.36M	6.58M	4.15M	30.13M
EBITDA	20.27M	-23.80M	19.63M	35.26M	-12.65M
Net Income	8.25M	-36.69M	4.01M	8.59M	-44.46M
Balance Sheet
Total Assets	69.71M	85.23M	96.79M	100.16M	122.18M
Cash, Cash Equivalents and Short-Term Investments	11.48M	17.72M	31.90M	12.81M	2.99M
Total Debt	16.16M	25.36M	23.49M	49.98M	82.39M
Total Liabilities	35.27M	69.80M	54.00M	61.41M	100.28M
Stockholders Equity	34.48M	15.46M	42.82M	38.79M	21.89M
Cash Flow
Free Cash Flow	5.79M	4.63M	929.00K	8.73M	8.48M
Operating Cash Flow	9.13M	4.65M	976.00K	8.96M	14.58M
Investing Cash Flow	-2.11M	-8.31M	45.61M	14.75M	-20.78M
Financing Cash Flow	-14.02M	-12.70M	-27.52M	-13.89M	-12.65M

Simplicity Holding Ltd. Technical Analysis

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

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:8367, the sentiment is Negative. The current price of 0.28 is below the 20-day moving average (MA) of 0.28, below the 50-day MA of 0.30, and below the 200-day MA of 0.37, indicating a bearish trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 47.92 is Neutral, neither overbought nor oversold. The STOCH value of 100.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:8367.

Simplicity Holding Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8367	74 Outperform	HK$18.64M	1.62	-80.18%	―	4.39%	―
Sector *	67 Neutral	¥252.89B	13.23	6.45%	2.71%	5.22%	-11.89%
8096	47 Neutral	HK$23.68M	―	-31.67%	―	-39.07%	71.87%
8432	45 Neutral	HK$27.83M	―	-124.73%	―	-7.31%	-128.32%
8475	38 Underperform	HK$4.70M	―		―	―	―
8493	26 Underperform	HK$15.68M	―		―	-47.88%	-1127.52%
8510	―	HK$16.12M	―		―	―	―