Novacon Technology Group Ltd (8635) AI Stock Analysis

• Market Cap: HK$228.00M
• Dividend Yield: 14.49%
• Average Volume (3M): 15.65M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.61
• 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

Financial results are weak: revenue declined meaningfully in the last two annual periods and the company swung from profitability (2022–2023) to very large losses (2024–2025) with negative gross profit and deeply negative margins. The main offset is that losses and cash outflows improved year over year, and reported debt is zero, but equity has contracted sharply due to ongoing losses.

Income Statement

The business has seen a sharp deterioration in profitability and scale: revenue fell meaningfully in the last two annual periods (2025-03-31 down ~20% after 2024-03-31 declined slightly), and the company swung from solid profitability in 2022-03-31 and 2023-03-31 to very large losses in 2024-03-31 and 2025-03-31. Gross profit turned negative in the last two years, and operating and net margins are deeply negative, indicating a cost structure that is not currently supported by revenue. The main positive is that losses narrowed in 2025-03-31 versus 2024-03-31, but overall earnings quality and trajectory remain weak.

Balance Sheet

Balance sheet leverage is a clear strength: total debt is reported at zero in 2024-03-31 and 2025-03-31, and debt-to-equity is effectively nil, reducing refinancing and interest-rate risk. However, equity and the asset base have contracted materially (equity fell from ~129.7M in 2023-03-31 to ~61.2M in 2025-03-31), consistent with heavy losses and value erosion. Returns on equity are strongly negative in the last two years, which weakens the otherwise conservative capital structure.

Cash Flow

Cash generation has weakened significantly: operating cash flow and free cash flow turned negative in 2024-03-31 and stayed negative in 2025-03-31, implying ongoing cash burn. There is improvement year over year (operating cash outflow reduced from about -17.9M to -6.8M, and free cash outflow improved from about -24.4M to -10.5M), but cash flow is still not self-funding. A mitigating point is that free cash flow was less negative than net income in the last two years, suggesting some non-cash charges or working-capital effects, yet the company still needs a path back to sustainable positive cash generation.

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: Positive

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 above the 20-day moving average (MA) of 0.50, below the 50-day MA of 0.83, and below the 200-day MA of 0.85, indicating a bearish trend. The MACD of -0.09 indicates Negative momentum. The RSI at 35.78 is Neutral, neither overbought nor oversold. The STOCH value of 19.65 is Positive, 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$177.78M	-38.10	-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$186.94M	-23.05	―	―	48.39%	88.30%
8071	47 Neutral	HK$112.47M	-14.12	-97.49%	―	-49.86%	15.00%
9600	47 Neutral	HK$196.31M	-1.78	-14.03%	―	15.44%	10.57%
8635	46 Neutral	HK$228.00M	-10.70	-19.25%	14.49%	129.07%	-5.71%
1933	41 Neutral	HK$59.45M	-0.58	-43.25%	―	-23.88%	-1021.62%