Novacon Technology Group Ltd (8635) AI Stock Analysis

• Market Cap: HK$249.60M
• Dividend Yield: 14.49%
• Average Volume (3M): 15.65M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.66
• Revenue Growth: 129.07%
• EPS Growth: -5.71%
• Country: HK
• Employees: 31
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): -0.01
• Shares Outstanding: 480,000,000
• 10 Day Avg. Volume: 17,445,200
• 30 Day Avg. Volume: 15,646,633
• PEG Ratio: 0.83
• Price to Book (P/B): 3.98
• Price to Sales (P/S): 13.60
• P/FCF Ratio: -23.14
• 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: 46 Neutral
• Price Target: HK$0.51 ▼(-10.53% Downside)

The score is held down primarily by deteriorated financial performance (revenue contraction, negative gross profit, and sizable losses) and bearish technicals (price below all key moving averages with negative MACD). A very high dividend yield supports valuation somewhat, but the negative P/E reflects ongoing losses and reduces confidence in valuation support.

Positive Factors

Zero reported debt

Reported zero total debt materially reduces refinancing and interest-rate risk, giving the company financial flexibility to fund operations, absorb shocks, or pursue strategic options over the next several months without immediate debt-servicing pressure.

Improving cash outflows

Operating and free cash outflows narrowed meaningfully year over year, indicating better cash management and reduced burn. This durable trend, if sustained, lowers near-term external funding needs and increases the chance of returning to self-funded operations.

Narrowing losses

A year-over-year reduction in losses suggests operational adjustments or cost controls are having an effect. Continued narrowing provides a credible path toward eventual profitability and margin recovery if revenue stabilizes or costs remain constrained.

Negative Factors

Revenue contraction and negative gross profit

Sustained revenue declines combined with negative gross profit signal structural issues in product-market fit, pricing, or cost base. Without reversing revenue loss or materially reducing cost of goods sold, margin recovery will be difficult to achieve over the medium term.

Ongoing negative cash generation

Persistent negative operating and free cash flow indicates continued cash burn despite improvements. This creates a structural financing requirement: the company will need sustained improvement or external capital to fund operations and invest in growth over coming quarters.

Equity erosion and negative ROE

Sharp equity contraction and strongly negative returns on equity reflect value destruction from ongoing losses. A diminished capital base limits the firm's capacity to absorb further setbacks, invest in product development, or scale competitively without external recapitalization.

Novacon Technology Group Ltd Business Overview & Revenue Model

Company Description

Elephant Holdings Group Ltd. is an investment holding company, which engages in the provision of financial trading solutions. It also includes the development and supply of resource allocation, planning, scheduling, and management of software and services. The company was founded in 2006 and is headquartered in Hong Kong.

How the Company Makes Money

Novacon Technology Group Ltd generates revenue through multiple streams associated with its core offerings. The primary revenue stream is derived from the sale of software products and solutions tailored to meet specific client requirements. Additionally, the company earns income from providing IT consultancy services, where they leverage their expertise to advise clients on optimizing their technology infrastructure and strategies. Systems integration services also contribute to the revenue, as Novacon assists businesses in seamlessly integrating new technologies with existing systems. Partnerships with other technology providers enhance the company's service offerings, allowing for expanded market reach and additional revenue opportunities.

Novacon Technology Group Ltd Financial Statement Overview

Summary

Novacon Technology Group Ltd is facing financial instability. The income statement shows a significant revenue decline and profitability challenges. The balance sheet is somewhat supportive with a strong cash position and no debt, but cash flow issues are severe, indicating potential liquidity threats.

Income Statement

Novacon Technology Group Ltd faced a massive downturn in its financial performance in the latest fiscal year. The revenue plummeted by 56.7%, from 52.58 million to 22.79 million, indicating severe market challenges or loss of customer base. The company also experienced a negative gross profit margin and a net loss, reflecting inefficiencies and high operational costs. The negative EBIT and EBITDA margins further highlight profitability issues.

Balance Sheet

The balance sheet shows a strong equity base with a debt-free structure, which is a positive aspect; however, the company's equity ratio decreased slightly due to a reduction in stockholders' equity. Despite the drop in total assets, the company maintains a solid cash position, providing some financial stability.

Cash Flow

Cash flows are under pressure due to a significant negative operating cash flow, reflecting operational challenges. The free cash flow also turned negative, indicating issues in generating cash from operations after capital expenditures. The cash flow to net income ratios are unfavorable, suggesting inefficiencies in translating accounting profits into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	45.09M	17.94M	22.79M	52.58M	50.03M	42.73M
Gross Profit	-5.65M	-678.00K	-6.45M	47.32M	45.30M	38.33M
EBITDA	-16.79M	-12.49M	-14.73M	15.33M	21.06M	23.29M
Net Income	-24.50M	-19.46M	-22.98M	5.71M	11.22M	13.03M
Balance Sheet
Total Assets	124.60M	70.05M	115.39M	137.38M	129.63M	130.76M
Cash, Cash Equivalents and Short-Term Investments	20.07M	18.23M	44.42M	61.41M	58.19M	66.24M
Total Debt	5.43M	0.00	0.00	504.00K	0.00	10.96M
Total Liabilities	34.69M	8.47M	9.05M	7.66M	4.83M	16.83M
Stockholders Equity	89.54M	61.23M	106.33M	129.72M	124.80M	113.94M
Cash Flow
Free Cash Flow	-31.61M	-10.54M	-24.43M	7.02M	3.61M	13.63M
Operating Cash Flow	-31.52M	-6.83M	-17.89M	12.43M	8.80M	20.59M
Investing Cash Flow	3.82M	6.59M	1.54M	-8.02M	-5.07M	-10.52M
Financing Cash Flow	8.71M	-25.80M	-804.00K	-1.18M	-11.78M	-1.49M

Novacon Technology Group Ltd Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.57
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:8635, the sentiment is Negative. The current price of 0.57 is below the 20-day moving average (MA) of 0.71, below the 50-day MA of 1.15, and below the 200-day MA of 0.86, indicating a bearish trend. The MACD of -0.18 indicates Negative momentum. The RSI at 33.11 is Neutral, neither overbought nor oversold. The STOCH value of 33.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:8635.

Novacon Technology Group Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
8100	72 Outperform	HK$164.45M	-35.24	-2.72%	0.57%	-13.40%	76.97%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
8156	48 Neutral	HK$199.61M	-24.61	―	―	48.39%	88.30%
8071	47 Neutral	HK$131.21M	-16.47	-97.49%	―	-49.86%	15.00%
9600	47 Neutral	HK$198.20M	-1.80	-14.03%	―	15.44%	10.57%
8635	46 Neutral	HK$249.60M	-11.71	-19.25%	14.49%	129.07%	-5.71%
1933	41 Neutral	HK$64.40M	-0.63	-43.25%	―	-23.88%	-1021.62%