Victory Securities (Holdings) Co. Ltd. (8540) AI Stock Analysis

• Market Cap: HK$1.14B
• Dividend Yield: 0.58%
• Average Volume (3M): 1.07M
• Price to Earnings (P/E): 25.5
• Beta (1Y): -0.22
• Revenue Growth: 214.77%
• EPS Growth: N/A
• Country: HK
• Employees: 65
• Sector: Financial
• Sector Strength: 71
• Industry: Financial - Capital Markets
• EPS (TTM): 0.21
• Shares Outstanding: 212,378,000
• 10 Day Avg. Volume: 665,348
• 30 Day Avg. Volume: 1,070,688
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: 43 Neutral
• Price Target: ―

Victory Securities (Holdings) Co. Ltd. faces significant challenges with profitability and cash flow management despite strong revenue growth. The bearish technical indicators and negative P/E ratio further emphasize financial instability. Although the dividend yield is high, its sustainability is in question due to ongoing losses.

Positive Factors

Revenue Growth

Strong revenue growth indicates expanding market presence and successful client acquisition strategies, which are crucial for long-term business sustainability.

Balance Sheet Health

A debt-free balance sheet provides financial flexibility and reduces risk, allowing the company to invest in growth opportunities without the burden of interest payments.

Gross Profit Margin

A strong gross profit margin reflects efficient cost management and pricing power, which can support profitability as the company scales its operations.

Negative Factors

Profitability Challenges

Persistent net losses indicate challenges in converting revenue growth into profits, which could impact long-term financial health and shareholder returns.

Cash Flow Issues

Negative operating cash flow suggests liquidity constraints, which can limit the company's ability to invest in growth and meet short-term obligations.

Negative Return on Equity

Negative ROE highlights inefficiencies in using shareholder capital, which can deter investment and affect the company's ability to raise funds in the future.

Victory Securities (Holdings) Co. Ltd. Business Overview & Revenue Model

Company Description

Victory Securities (Holdings) Company Limited, an investment holding company, provides various financial services in Hong Kong. It offers securities/futures/insurance policies broking, placing and underwriting, securities advising, asset management, financial advisory, and investment and insurance consultancy services. The company was incorporated in 2016 and is headquartered in Hong Kong. Victory Securities (Holdings) Company Limited is a subsidiary of Dr. TT Kou's Family Company Limited.

How the Company Makes Money

Victory Securities (Holdings) Co. Ltd. generates revenue through multiple streams within the financial services industry. The primary revenue source is its brokerage services, where the company earns commissions and fees from clients executing trades in securities and other financial instruments. Additionally, the company offers margin financing, providing loans to clients for trading purposes, and earns interest income from these loans. Asset management services contribute to the company's earnings as it charges management fees based on the assets under management. Victory Securities also earns advisory fees by providing financial consultancy and advisory solutions to both individual and corporate clients. Strategic partnerships and collaborations with other financial institutions enhance its service offerings and expand its client base, further contributing to its revenue growth.

Victory Securities (Holdings) Co. Ltd. Financial Statement Overview

Summary

Victory Securities (Holdings) Co. Ltd. demonstrates strong revenue growth but struggles with profitability, as evidenced by ongoing net losses. The balance sheet is strong with a high equity ratio and no debt, but cash flow challenges signal liquidity concerns. The company needs to focus on improving profitability and cash flow management to enhance financial stability.

Income Statement

The company has experienced volatile revenue growth with a significant increase of 52.52% from 2023 to 2024. However, profitability remains a concern as net income has been negative for the past three years, resulting in a negative net profit margin. The gross profit margin remains strong at 100%, but EBIT and EBITDA margins are weak due to high operating costs.

Balance Sheet

The balance sheet reflects a solid equity base with an equity ratio of 33.18% in 2024. The debt-to-equity ratio is favorable at 0, since the company has no debt. Return on equity is negative due to losses, indicating inefficiency in generating returns from shareholders’ investments.

Cash Flow

Cash flow from operations turned negative in 2024, indicating potential liquidity issues. Free cash flow also shows a negative trend, which could hinder future investments. The operating cash flow to net income ratio is negative due to persistent losses.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	68.88M	45.15M	60.11M	83.91M	71.69M
Gross Profit	62.13M	46.22M	45.35M	63.13M	54.33M
EBITDA	0.00	-17.86M	-12.94M	28.48M	33.21M
Net Income	-3.14M	-24.97M	-24.24M	15.11M	23.18M
Balance Sheet
Total Assets	520.04M	300.75M	365.42M	496.49M	501.67M
Cash, Cash Equivalents and Short-Term Investments	12.56M	23.67M	27.82M	18.48M	30.79M
Total Debt	0.00	96.20M	133.16M	213.55M	131.66M
Total Liabilities	342.57M	137.65M	176.46M	280.54M	292.73M
Stockholders Equity	172.55M	163.01M	188.91M	215.79M	208.94M
Cash Flow
Free Cash Flow	-87.52M	37.53M	106.96M	-62.21M	-28.06M
Operating Cash Flow	-87.15M	37.91M	108.17M	-61.18M	-24.57M
Investing Cash Flow	-5.93M	1.41M	-7.09M	-7.63M	-1.99M
Financing Cash Flow	72.32M	-53.63M	-90.76M	60.24M	38.15M

Victory Securities (Holdings) Co. Ltd. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 5.66
• 50DMA: Negative
• 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:8540, the sentiment is Neutral. The current price of 5.66 is below the 20-day moving average (MA) of 6.35, below the 50-day MA of 7.35, and above the 200-day MA of 4.33, indicating a neutral trend. The MACD of -0.39 indicates Positive momentum. The RSI at 32.17 is Neutral, neither overbought nor oversold. The STOCH value of 24.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:8540.

Victory Securities (Holdings) Co. Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	68 Neutral	$18.02B	11.58	9.93%	3.76%	9.73%	1.31%
0952	45 Neutral	HK$921.88M	59.38	-4.03%	―	173.24%	-515.63%
8540	43 Neutral	HK$1.14B	25.46	23.05%	0.58%	214.77%	―
HQF	―	€93.03M	8.57	2.36%	―	―	―
2680	58 Neutral	HK$292.20M	―	-17.76%	―	185.46%	-1997.94%
0139	41 Neutral	HK$307.13M	―	-16.07%	―	110.52%	2.86%
2324	38 Underperform	HK$67.52M	―	-14.26%	―	2126.94%	36.49%