Fameglow Holdings Limited (8603) AI Stock Analysis

• Market Cap: HK$5.45B
• Dividend Yield: N/A
• Average Volume (3M): 238.30K
• Price to Earnings (P/E): 106.1
• Beta (1Y): 0.50
• Revenue Growth: 56.28%
• EPS Growth: -9.91%
• Country: HK
• Employees: 218
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Personal Products & Services
• EPS (TTM): 0.03
• Shares Outstanding: 818,920,000
• 10 Day Avg. Volume: 318,900
• 30 Day Avg. Volume: 238,300
• PEG Ratio: 1.78
• Price to Book (P/B): 9.50
• Price to Sales (P/S): 2.32
• P/FCF Ratio: 33.44
• 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: 66 Neutral
• Price Target: HK$7.00 ▲(62.79% Upside)

The score is supported primarily by strong financial performance on revenue growth and profitability, but constrained by weak cash-flow quality and a very high P/E valuation. Technicals show a strong uptrend, yet extremely overbought momentum indicators increase the risk of a short-term correction.

Positive Factors

Revenue Growth

Sustained double-digit revenue growth indicates expanding product adoption and successful distribution. Over a 2–6 month horizon this underpins scale benefits, market share gains, and the company's ability to invest in R&D and marketing to reinforce its competitive position.

Very High Gross Margin

An 89% gross margin signals strong pricing power and product differentiation in skincare. Structurally high gross margins support long-term profitability, funding marketing and innovation, and provide buffer against input cost variability if maintained through brand strength.

Capital Efficiency & Improved Leverage

High ROE with reduced leverage reflects efficient use of equity and better capital structure. This durable strength improves financing flexibility for expansion, supports returns to shareholders, and reduces solvency risk over multiple quarters.

Negative Factors

Weak Cash Flow Quality

Significant decline in free cash flow and weak cash conversion vs. reported profits limit the firm's ability to self-fund growth, pay down debt, or invest in capex. Over months this constrains strategic flexibility and increases reliance on external financing.

Pressure on Operating Margins

Declining operating margins suggest emerging cost or efficiency issues that could erode profitability if persistent. Over a multi-month horizon, margin contraction reduces cash available for reinvestment and weakens the cushion against competitive pricing or higher input costs.

Negative EPS Growth

Falling EPS despite revenue gains implies per-share profitability pressures from costs, dilution, or non-cash items. This undermines earnings quality and could impair dividend or buyback capacity, reducing shareholder returns over the medium term.

Fameglow Holdings Limited Business Overview & Revenue Model

Company Description

Fameglow Holdings Limited (8603) is a company primarily engaged in the development and provision of beauty and personal care products. Operating within the health and wellness sector, Fameglow focuses on innovative skincare solutions, cosmetic items, and wellness supplements. The company's core offerings include a range of skincare products that cater to diverse consumer needs, emphasizing quality ingredients and effective results.

How the Company Makes Money

Fameglow Holdings Limited generates revenue through the sale of its beauty and personal care products, primarily through retail and e-commerce channels. The company benefits from a diversified revenue model, which includes direct sales to consumers, partnerships with retail distributors, and collaborations with beauty influencers and brands for co-marketing initiatives. Additionally, Fameglow may explore subscription services or loyalty programs to enhance customer retention and generate recurring income. Factors contributing to its earnings include brand reputation, product innovation, market demand for skincare solutions, and strategic marketing campaigns that enhance visibility and attract a broader customer base.

Fameglow Holdings Limited Financial Statement Overview

Summary

Income statement strength (Score 85) is driven by 23.59% revenue growth, very high gross margin (89.32%), and solid net margin (10.51%). Balance sheet is decent (Score 70) with improved leverage (debt-to-equity 0.87) and strong ROE (43.10%), but a moderate equity ratio (32.16%). Cash flow is the key weakness (Score 60) with free cash flow down 52.94% and low cash conversion (operating cash flow to net income 0.47; free cash flow to net income 0.36).

Income Statement

Fameglow Holdings Limited has demonstrated strong revenue growth with a 23.59% increase in the latest year, supported by a high gross profit margin of 89.32%. The net profit margin is solid at 10.51%, indicating effective cost management. However, the EBIT and EBITDA margins have slightly decreased compared to the previous year, suggesting some pressure on operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has improved to 0.87, reflecting better leverage management compared to previous years. Return on equity is strong at 43.10%, indicating efficient use of equity to generate profits. However, the equity ratio remains moderate at 32.16%, suggesting a balanced but cautious approach to asset financing.

Cash Flow

The free cash flow growth rate has declined significantly by 52.94%, which is a concern for future liquidity. The operating cash flow to net income ratio is 0.47, indicating that cash generation is not fully aligned with reported profits. The free cash flow to net income ratio is 0.36, suggesting limited cash available for reinvestment or debt reduction.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	568.18M	435.27M	299.36M	227.58M	179.63M	82.06M
Gross Profit	242.21M	388.81M	260.89M	199.60M	154.77M	69.20M
EBITDA	135.63M	118.79M	93.66M	67.63M	40.39M	5.86M
Net Income	60.38M	45.73M	40.75M	16.37M	-8.78M	-26.96M
Balance Sheet
Total Assets	329.81M	329.81M	194.48M	208.14M	219.66M	246.94M
Cash, Cash Equivalents and Short-Term Investments	40.62M	40.62M	19.31M	19.22M	1.64M	39.38M
Total Debt	92.39M	92.39M	45.55M	66.38M	94.44M	111.97M
Total Liabilities	223.72M	223.72M	134.23M	188.64M	216.53M	235.03M
Stockholders Equity	106.09M	106.09M	60.25M	19.50M	3.13M	11.91M
Cash Flow
Free Cash Flow	30.14M	30.14M	18.28M	41.87M	-9.71M	6.82M
Operating Cash Flow	83.53M	83.53M	31.74M	74.07M	24.73M	23.91M
Investing Cash Flow	-35.31M	-35.31M	-6.91M	-32.18M	-34.45M	-9.54M
Financing Cash Flow	-26.91M	-26.91M	-27.80M	-24.31M	-28.02M	-14.21M

Fameglow Holdings Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 4.30
• 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:8603, the sentiment is Positive. The current price of 4.3 is below the 20-day moving average (MA) of 6.34, below the 50-day MA of 4.82, and above the 200-day MA of 2.46, indicating a bullish trend. The MACD of 0.49 indicates Positive momentum. The RSI at 66.07 is Neutral, neither overbought nor oversold. The STOCH value of 78.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:8603.

Fameglow Holdings Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
1161	73 Outperform	HK$646.53M	7.96	24.41%	5.98%	-0.19%	19.04%
8483	68 Neutral	HK$80.80M	-59.41	-6.35%	7.50%	-23.23%	-136.17%
8603	66 Neutral	HK$5.45B	106.06	49.25%	―	56.28%	-9.91%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
0919	59 Neutral	HK$85.93M	4.82	10.10%	―	-3.40%	515.63%
1827	57 Neutral	HK$316.00M	29.04	7.67%	―	-20.59%	―
8296	48 Neutral	HK$32.13M	-6.18	-3.96%	―	15.60%	62.35%