Dowway Holdings Limited (8403) AI Stock Analysis

• Market Cap: HK$431.20M
• Dividend Yield: N/A
• Average Volume (3M): 117.57K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.25
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: HK
• Employees: 70
• Sector: Communication Services
• Sector Strength: 97
• Industry: Advertising Agencies
• EPS (TTM): N/A
• Shares Outstanding: 154,000,000
• 10 Day Avg. Volume: 75,900
• 30 Day Avg. Volume: 117,566
• PEG Ratio: 0.27
• Price to Book (P/B): 23.75
• Price to Sales (P/S): 0.72
• P/FCF Ratio: -4.85
• 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: 47 Neutral
• Price Target: HK$2.50 ▲(67.79% Upside)

The score is held down primarily by weak financial performance (declining revenue, sustained losses, high leverage, and negative operating/free cash flow). Technicals are a key offset, with strong trend and positive MACD, though momentum is stretched (high RSI/Stoch). Valuation is constrained by a negative P/E and no stated dividend yield.

Positive Factors

Diversified business model

Operating across construction, project management and property development creates multiple durable revenue channels. This vertical exposure lets Dowway capture value across project lifecycles, smooth revenue volatility, and leverage construction expertise to improve margins over time.

Multiple revenue streams (sales, leasing, contracts)

Having construction fees, property sale profits and rental income provides a structural mix of transactional and recurring cash flows. Strategic partnerships with developers and local authorities can secure project access, supporting a steadier pipeline and long-term revenue visibility.

Positive free cash flow coverage metric

Despite net losses, a free cash flow to net income ratio above 1 indicates the company can convert operations into cash to some extent. That structural cash generation can provide short-term runway for operations and gradual deleveraging if sustained and improved.

Negative Factors

Declining revenue and negative margins

Sustained revenue contraction and deeply negative operating and net margins erode internal funding for growth and capex. Over months this weak profitability constrains reinvestment, reduces competitive flexibility and makes achieving durable recovery more difficult.

High leverage

Material leverage raises refinancing and interest-rate sensitivity, limiting strategic options. With low equity backing, the company faces higher bankruptcy and covenant risk in downturns and reduced capacity to fund new projects without external financing.

Negative operating cash flow / liquidity pressure

Persistent negative operating cash flow signals structural liquidity strain and reliance on financing or asset sales to fund operations. Over a multi-month horizon this undermines ability to honor contracts, invest in projects, or absorb delays, increasing execution risk.

Dowway Holdings Limited Business Overview & Revenue Model

Company Description

Dowway Holdings Limited (8403) is a diversified investment holding company based in Hong Kong, primarily engaged in the construction and property development sectors. The company focuses on providing a range of services including project management, construction works, and real estate investment. Dowway aims to capitalize on opportunities within the property market by investing in residential and commercial developments, as well as leveraging its expertise in construction to enhance project efficiency and profitability.

How the Company Makes Money

Dowway Holdings Limited generates revenue primarily through its construction contracts and property development projects. The company earns money by undertaking construction projects for third-party clients, which typically involve bidding processes to secure contracts. Additionally, Dowway generates income from the sale and leasing of developed properties. Key revenue streams include fees from construction services, profit margins on property sales, and rental income from its investment properties. The company may also benefit from strategic partnerships with real estate developers and local government entities, which can provide access to lucrative projects and investment opportunities, thus enhancing its overall revenue potential.

Dowway Holdings Limited Financial Statement Overview

Summary

Financial statements indicate significant weakness: revenue is declining (TTM growth -5.08%), profitability is negative (net margin -17.62%, EBIT margin -23.25%), leverage is high (debt-to-equity 2.63) with very poor returns (ROE -254.44%), and operating/free cash flow are negative.

Income Statement

Dowway Holdings Limited has faced declining revenue with a negative growth rate of -5.08% in the TTM. The company is struggling with profitability, as evidenced by negative net profit margins (-17.62%) and EBIT margins (-23.25%). The gross profit margin is relatively low at 11.40%, indicating challenges in managing cost of goods sold. Overall, the income statement reflects significant financial difficulties and a need for strategic improvements.

Balance Sheet

The balance sheet shows a high debt-to-equity ratio of 2.63, indicating significant leverage and potential financial risk. The return on equity is negative (-254.44%), reflecting poor profitability and returns for shareholders. However, the equity ratio is 10.55%, suggesting some level of asset financing through equity. The company needs to address its high leverage to improve financial stability.

Cash Flow

Cash flow analysis reveals negative operating cash flow and free cash flow, with a slight decline in free cash flow growth (-2.45%). The operating cash flow to net income ratio is negative, indicating cash flow challenges. However, the free cash flow to net income ratio is slightly above 1, suggesting that the company is generating enough free cash flow to cover its net losses. Overall, cash flow management requires improvement to ensure liquidity and operational sustainability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	126.61M	140.16M	117.45M	177.13M	170.02M	144.17M
Gross Profit	14.44M	16.43M	5.86M	5.38M	14.31M	624.00K
EBITDA	-29.16M	-10.57M	-15.68M	-34.74M	-3.13M	-12.84M
Net Income	-22.31M	-5.75M	-16.92M	-36.45M	-7.65M	-17.83M
Balance Sheet
Total Assets	125.78M	131.12M	108.93M	137.07M	148.86M	125.73M
Cash, Cash Equivalents and Short-Term Investments	15.73M	25.28M	12.44M	4.25M	6.61M	15.31M
Total Debt	34.84M	29.89M	20.50M	16.50M	18.30M	10.70M
Total Liabilities	113.84M	127.43M	105.35M	114.95M	98.90M	69.32M
Stockholders Equity	13.27M	4.27M	3.58M	20.49M	49.96M	56.42M
Cash Flow
Free Cash Flow	-19.87M	-20.87M	2.10M	-8.40M	-5.52M	-12.32M
Operating Cash Flow	-19.82M	-20.85M	2.11M	-8.39M	-5.26M	-12.32M
Investing Cash Flow	-1.80M	1.00K	2.00K	3.00K	-245.00K	46.00K
Financing Cash Flow	25.87M	14.63M	5.86M	6.45M	-3.40M	2.34M

Dowway Holdings Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.49
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:8403, the sentiment is Positive. The current price of 1.49 is below the 20-day moving average (MA) of 2.42, below the 50-day MA of 1.84, and below the 200-day MA of 1.55, indicating a bullish trend. The MACD of 0.31 indicates Negative momentum. The RSI at 71.05 is Negative, neither overbought nor oversold. The STOCH value of 62.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:8403.

Dowway Holdings Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
1490	51 Neutral	HK$207.83M	-52.35	-0.67%	―	2.85%	-118.89%
8403	47 Neutral	HK$431.20M	-15.99	-176.68%	―	―	―
0205	47 Neutral	HK$1.14B	-72.58	-6.02%	―	-4.13%	76.38%
1753	45 Neutral	HK$217.52M	-4.22	-3.55%	―	-5.89%	-330.91%
0164	44 Neutral	HK$114.97M	-15.84	―	―	-1.65%	92.30%
0343	44 Neutral	HK$302.03M	-6.22	-57.02%	―	-0.57%	-159.63%