Sunray Engineering Group Limited (8616) AI Stock Analysis

• Market Cap: HK$60.00M
• Dividend Yield: N/A
• Average Volume (3M): 67.67K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.35
• Revenue Growth: 8.51%
• EPS Growth: -217.24%
• Country: HK
• Employees: 101
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): <0.01
• Shares Outstanding: 1,000,000,000
• 10 Day Avg. Volume: 16,000
• 30 Day Avg. Volume: 67,666
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.18
• Price to Sales (P/S): 0.20
• P/FCF Ratio: 1.80
• 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: 56 Neutral
• Price Target: HK$0.06 ▲(12.00% Upside)

The score is primarily held back by weak financial performance (declining margins and net losses), partially offset by a strong balance sheet and improving cash flow. Technicals are moderately supportive with price above key moving averages, while valuation is limited by negative earnings and no dividend yield data.

Positive Factors

Strong balance sheet / low leverage

Low leverage and a healthy equity ratio provide durable financial flexibility, allowing the company to bid on large public projects, absorb cyclical revenue shocks, and finance working capital without needing immediate external funding. This stability supports multi-month contract execution and strategic resilience.

Improving operating and free cash flow

A shift to positive operating and improved free cash flow indicates better cash generation from core operations, reducing reliance on financing. Sustained cash conversion supports timely supplier payments, project execution on fixed-price contracts, and reinvestment in capabilities—strengthening the business over a multi-month horizon.

Diversified contract types and client mix

A mix of fixed-price, T&M, and cost-plus contracts plus public/private client exposure and partnerships lowers revenue volatility and margin risk on complex jobs. This structural contract diversity enhances predictability and scalability, supporting sustainable revenue generation across project cycles.

Negative Factors

Weak profitability and latest net loss

A recent net loss and ongoing weak profitability erode retained earnings and reduce internal funding capacity for bids and capex. Persisting losses impair creditworthiness and limit strategic options, making sustained recovery imperative for medium-term competitiveness in infrastructure contracts.

Declining margins across income statement

Falling gross and operating margins reduce the buffer against cost inflation and fixed-price contract risks, squeezing free cash flow and profitability. Margin erosion undermines ability to invest in technology or bidding capacity, increasing vulnerability across future project cycles.

Severe EPS contraction

A dramatic decline in EPS signals significant operational or one-off earnings deterioration, weakening stakeholder confidence and possibly limiting access to capital. Persistent EPS weakness constrains dividend prospects, strategic investments, and hiring, posing medium-term risks to growth execution.

Sunray Engineering Group Limited Business Overview & Revenue Model

Company Description

Sunray Engineering Group Limited, an investment holding company, provides building protection solutions in Hong Kong and Macau. It supplies waterproofing, tiling, flooring, and other products for residential and commercial buildings, and community facilities in public and private sectors, including sports centers, theatre, hospitals, power station and other community facilities. The company was founded in 1988 and is based in Cheung Sha Wan, Hong Kong.

How the Company Makes Money

Sunray Engineering Group generates revenue primarily through contracts in civil engineering and construction projects. The company earns money by providing engineering consultancy, project management services, and executing construction contracts for both public and private sector clients. Key revenue streams include fixed-price contracts, time and materials contracts, and cost-plus contracts, which are structured to ensure profitability while meeting client requirements. Additionally, the company may engage in partnerships with other firms to undertake larger projects, thereby expanding its capabilities and market reach, which can enhance its earnings potential.

Sunray Engineering Group Limited Financial Statement Overview

Summary

Profitability is weak with declining revenue/margins and a latest-period net loss (income statement score 45). Offsetting this, the balance sheet is relatively strong with low leverage (balance sheet score 70) and operating/free cash flow have improved into positive territory (cash flow score 60), providing some stability despite losses.

Income Statement

The income statement shows a declining trend in revenue and profitability. Gross profit margin has decreased from previous years, and the company has reported a net loss in the latest period. The negative net profit margin and declining EBIT and EBITDA margins indicate challenges in maintaining profitability.

Balance Sheet

The balance sheet reflects a strong equity position with a low debt-to-equity ratio, indicating financial stability. However, the return on equity has been negative due to net losses, which could be a concern if not addressed. The equity ratio remains healthy, suggesting a solid capital structure.

Cash Flow

Cash flow analysis shows improvement in operating cash flow, turning positive after previous negative figures. Free cash flow has also improved, indicating better cash management. However, the free cash flow to net income ratio is not favorable due to net losses.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	212.92M	162.46M	165.95M	222.81M	199.86M	178.94M
Gross Profit	61.69M	49.28M	48.94M	57.44M	62.26M	58.91M
EBITDA	-5.49M	-5.70M	7.00M	15.79M	20.76M	20.37M
Net Income	-14.65M	-13.28M	-798.00K	5.51M	10.85M	12.44M
Balance Sheet
Total Assets	244.64M	244.79M	253.20M	257.50M	258.22M	220.95M
Cash, Cash Equivalents and Short-Term Investments	39.00M	49.12M	35.19M	29.44M	46.98M	57.78M
Total Debt	20.81M	23.98M	25.64M	27.78M	28.63M	4.19M
Total Liabilities	69.50M	71.29M	66.43M	69.94M	76.17M	49.75M
Stockholders Equity	175.13M	173.50M	186.76M	187.56M	182.05M	171.20M
Cash Flow
Free Cash Flow	2.93M	17.82M	10.45M	-13.84M	-35.26M	-19.37M
Operating Cash Flow	4.94M	19.29M	10.51M	-6.48M	14.37M	-17.05M
Investing Cash Flow	-1.89M	-445.00K	189.00K	-5.46M	-47.52M	-1.40M
Financing Cash Flow	-5.81M	-4.92M	-4.95M	-5.60M	22.35M	36.31M

Sunray Engineering Group Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.05
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:8616, the sentiment is Positive. The current price of 0.05 is below the 20-day moving average (MA) of 0.05, below the 50-day MA of 0.05, and above the 200-day MA of 0.04, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 58.51 is Neutral, neither overbought nor oversold. The STOCH value of 42.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:8616.

Sunray Engineering Group Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
8616	56 Neutral	HK$60.00M	-6.52	-5.13%	―	8.51%	-217.24%
8423	56 Neutral	HK$38.40M	-0.93	-28.49%	―	-1.68%	-417.79%
8619	49 Neutral	HK$22.98M	0.38	31.39%	―	-15.18%	94.48%
6189	38 Underperform	HK$17.35M	―	―	―	―	―
8445	38 Underperform	HK$42.01M	-4.71	-11.29%	―	-41.79%	19.85%