Wing Lee Development Construction Holdings Limited (9639) AI Stock Analysis

• Market Cap: HK$1.08B
• Dividend Yield: N/A
• Average Volume (3M): 3.28M
• Price to Earnings (P/E): 29.1
• Beta (1Y): -0.15
• Revenue Growth: -18.87%
• EPS Growth: -54.53%
• Country: HK
• Employees: 381
• Sector: Real Estate
• Sector Strength: 53
• Industry: Engineering & Construction
• EPS (TTM): N/A
• Shares Outstanding: 1,000,000,000
• 10 Day Avg. Volume: 3,254,500
• 30 Day Avg. Volume: 3,278,333
• PEG Ratio: -0.28
• Price to Book (P/B): 1.24
• Price to Sales (P/S): 0.61
• P/FCF Ratio: -7.23
• 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: 59 Neutral
• Price Target: HK$1.00 ▼(-18.03% Downside)
• Action: Reiterated Date: 11/21/25
• Date: Action: Reiterated 11/21/25

Wing Lee Development Construction Holdings Limited shows strong revenue growth and improved leverage, but faces significant challenges in profitability and cash flow management. Technical indicators are mixed, with some positive momentum but potential weakness. The valuation is moderate, with a P/E ratio suggesting fair pricing, but the lack of a dividend yield may deter income investors. Overall, the stock presents a balanced risk-reward profile with areas needing improvement.

Positive Factors

Conservative Leverage

An improved debt-to-equity ratio of 0.21 materially lowers financial leverage and interest burden. For a capital-intensive construction firm this enhances flexibility to fund projects internally, reduces refinancing risk, and supports resilient bid capabilities across industry cycles.

Strong Recent Revenue Growth

A 36.22% year-over-year revenue increase signals robust contract wins or execution scaling. Durable top-line growth improves fixed-cost absorption, supports operational scale, and provides a base to recover margins if management maintains cost controls and backlog conversion continues.

Solid Equity Base

An equity ratio of 61.75% delivers a meaningful capital buffer against project overruns and working-capital swings common in construction. Strong equity relative to assets reduces default risk, enables participation in larger contracts, and lowers dependence on short-term borrowing.

Negative Factors

Severe Free Cash Flow Decline

A free cash flow contraction of -218% indicates cash outflows far exceeding inflows, undermining liquidity. Persistent negative FCF forces reliance on external funding, constrains payments to subcontractors and suppliers, and threatens stable project execution and medium-term investment capacity.

Poor Cash Conversion

Operating cash equals only ~2.7% of net income, showing earnings are not converting to cash. In construction this suggests slow receivables, retentions or working-capital strain, raising liquidity and rollover risk and weakening the firm's ability to self-fund operations or absorb shocks.

Margin Compression and EPS Decline

Gross margin down to 20.15% and net margin 7.74%, alongside ~54.5% EPS decline, point to sustained profitability pressure. Margin compression reduces internal cash generation, limits reinvestment capacity, and signals operational or pricing challenges that could persist without structural cost or mix improvements.

Wing Lee Development Construction Holdings Limited Business Overview & Revenue Model

Company Description

Wing Lee Development Construction Holdings Ltd. engages in the construction business. It operates through the following segments: Civil Engineering, Electrical Engineering and Renewable Energy. The Civil Engineering segment offers civil engineering works involves in site formation works and road and drainage works. The Electrical Engineering segment covers electrical engineering works which generally include cable trenching, laying and jointing, and involve excavation, reinstatement and miscellaneous construction works, traffic impact assessment, and emergency and cable fault repair. The Renewable Energy segment involves in solar photovoltaic works. The company was founded on May 17 , 2024 and is headquartered in Hong Kong.

How the Company Makes Money

Wing Lee Development Construction Holdings Limited generates revenue primarily through its construction contracts, which encompass a variety of projects from public infrastructure to private residential and commercial developments. The company earns income by bidding for and securing contracts, which are often awarded by government bodies or private developers. Key revenue streams include project fees, cost-plus contracts, and fixed-price contracts. Additionally, strategic partnerships with subcontractors and suppliers enhance operational efficiency and cost management, contributing to profitability. The company's financial performance is also influenced by the overall construction market demand, regulatory environment, and its ability to manage project timelines and budgets effectively.

Wing Lee Development Construction Holdings Limited Financial Statement Overview

Summary

Wing Lee Development Construction Holdings Limited exhibits strong revenue growth and improved leverage, but faces challenges in profitability and cash flow management. The company needs to focus on enhancing its margins and addressing cash flow issues to sustain its growth trajectory and financial health.

Income Statement

Wing Lee Development Construction Holdings Limited has shown strong revenue growth with a 36.22% increase in the latest year, indicating robust demand and expansion. However, the gross profit margin has slightly decreased to 20.15%, and the net profit margin has also declined to 7.74%, suggesting some pressure on profitability. The EBIT and EBITDA margins have also decreased, reflecting operational challenges. Overall, the company demonstrates growth potential but faces profitability constraints.

Balance Sheet

The company's debt-to-equity ratio has improved to 0.21, indicating a more conservative leverage position compared to previous years. Return on equity has decreased to 15.77%, reflecting reduced profitability. The equity ratio stands at 61.75%, showing a solid equity base relative to total assets. While the balance sheet shows improved leverage, the decline in ROE suggests challenges in generating returns.

Cash Flow

The cash flow situation is concerning, with a significant negative free cash flow growth rate of -218.36%, indicating cash outflows exceeding inflows. The operating cash flow to net income ratio is low at 2.74%, and the free cash flow to net income ratio is negative, highlighting cash flow management issues. The company needs to address its cash flow challenges to ensure financial stability.

Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	568.26M	716.64M	526.10M	361.21M	520.35M
Gross Profit	116.28M	144.41M	121.61M	75.53M	93.61M
EBITDA	71.58M	90.42M	109.11M	64.03M	83.90M
Net Income	37.13M	55.46M	76.91M	40.56M	59.05M
Balance Sheet
Total Assets	610.88M	569.22M	365.78M	258.38M	268.83M
Cash, Cash Equivalents and Short-Term Investments	57.97M	93.68M	27.36M	5.47M	13.34M
Total Debt	90.68M	72.17M	52.93M	53.21M	50.67M
Total Liabilities	240.00M	217.62M	210.38M	139.39M	190.38M
Stockholders Equity	370.88M	351.59M	155.39M	119.00M	77.91M
Cash Flow
Free Cash Flow	-164.24M	-60.14M	50.81M	16.40M	1.85M
Operating Cash Flow	-86.09M	5.39M	69.39M	36.78M	7.92M
Investing Cash Flow	-79.39M	-91.54M	-39.61M	-35.87M	-5.49M
Financing Cash Flow	191.19M	152.47M	-7.89M	-8.78M	2.00M

Wing Lee Development Construction Holdings Limited Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1.22
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:9639, the sentiment is Negative. The current price of 1.22 is above the 20-day moving average (MA) of 1.13, above the 50-day MA of 1.15, and above the 200-day MA of 1.15, indicating a bearish trend. The MACD of -0.01 indicates Positive momentum. The RSI at 40.79 is Neutral, neither overbought nor oversold. The STOCH value of 37.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:9639.

Wing Lee Development Construction Holdings Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	65 Neutral	$2.17B	12.19	3.79%	4.94%	3.15%	1.96%
9639	59 Neutral	HK$1.08B	29.11	21.88%	―	-18.87%	-54.53%
2286	51 Neutral	HK$108.00M	-0.36	-24.92%	―	-81.10%	-114.54%
0261	46 Neutral	HK$74.05M	-0.83	-13.47%	―	-32.43%	55.29%
2892	46 Neutral	HK$262.50M	-4.46	-9.07%	―	-72.10%	90.00%

Wing Lee Development Construction Holdings Limited Corporate Events

Wing Lee Development Construction Replaces PwC With Linksfield as Auditor to Cut Costs

Wing Lee Development Construction Holdings Limited has announced the resignation of PricewaterhouseCoopers as its auditor, effective 30 January 2026, after the two parties failed to agree on the audit fee for the financial year ending 31 March 2026. The board and audit committee emphasized there was no disagreement with PwC and no other matters requiring shareholder attention, and noted that PwC had not yet started audit work for the year, so the change is not expected to materially affect the upcoming audit. Citing more competitive fee proposals from other firms with suitable experience and resources, the company has appointed Linksfield CPA Limited as its new auditor until the next annual general meeting, aiming to enhance cost-effectiveness and reduce operating expenses while maintaining audit quality, following relevant guidelines issued by the Accounting and Financial Reporting Council.

The most recent analyst rating on (HK:9639) stock is a Hold with a HK$1.00 price target. To see the full list of analyst forecasts on Wing Lee Development Construction Holdings Limited stock, see the HK:9639 Stock Forecast page.