ZX Inc. (9890) AI Stock Analysis

• Market Cap: HK$9.00B
• Dividend Yield: N/A
• Average Volume (3M): 4.06M
• Price to Earnings (P/E): 2.8
• Beta (1Y): 1.28
• Revenue Growth: -31.38%
• EPS Growth: N/A
• Country: HK
• Employees: 912
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 1.27
• Shares Outstanding: 534,439,940
• 10 Day Avg. Volume: 1,736,060
• 30 Day Avg. Volume: 4,062,381
• PEG Ratio: 9.66
• Price to Book (P/B): 1.48
• Price to Sales (P/S): 0.64
• P/FCF Ratio: -1.73
• 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: 61 Neutral
• Price Target: HK$20.50 ▲(11.84% Upside)
• Action: Reiterated Date: 12/13/25
• Date: Action: Reiterated 12/13/25

ZX Inc.'s stock score is primarily influenced by its challenging financial performance, marked by declining revenues and cash flow issues. Positive technical indicators provide some support, but the overbought status suggests caution. The valuation appears reasonable, but profitability concerns remain a significant risk.

Positive Factors

Diversified recurring revenue & cloud partnerships

ZX’s mix of subscription licenses, consulting services and strategic cloud provider partnerships supports recurring revenue and broader distribution. This business model fosters more predictable cash flow, enhances cross-sell opportunities, and strengthens customer retention over a multi‑quarter horizon.

High gross margin profile

A ~72% gross margin reflects structural pricing power and a scalable software cost base. Sustained high gross margins provide room to invest in R&D and go‑to‑market while still enabling the company to achieve operating leverage if SG&A and product delivery costs are controlled.

Reduced financial leverage

Material reduction in leverage improves financial flexibility, lowering interest burden and refinancing risk. This gives the company durable capacity to fund investments, absorb shocks, or pursue strategic initiatives without immediate dependence on equity dilution or costly debt.

Negative Factors

Sharp revenue decline

A meaningful drop in top-line scale undermines operating leverage and long-term competitiveness. Persistent revenue contraction pressures unit economics, reduces available investment for product innovation and sales, and signals potential structural demand or market-share issues needing strategic correction.

Negative operating cash flow

Sustained negative operating cash flow indicates cash burn and weak conversion of earnings to liquidity. Over months this constrains reinvestment, forces reliance on external funding, and increases refinancing or dilution risk, limiting the firm's ability to execute long‑term growth plans.

Net loss and margin deterioration

Despite strong gross margins, the company reports a net loss and declining EBIT/EBITDA margins, showing operating inefficiency. Persistent negative profitability erodes shareholder returns, weakens reinvestment capacity, and hampers the company’s ability to sustain competitive product and go‑to‑market programs.

ZX Inc. Business Overview & Revenue Model

Company Description

ZX Inc. operates as a publisher of online game products in Mainland China and Hong Kong. The company operates and markets games under the Tan Wan brand, as well as offers real estate and other marketing services. It also sells rice noodle products and other fast consumer foods under the Zha Zha Hui brand; and pop toy products under the Bro Kooli brand. The company was founded in 2015 and is headquartered in Guangzhou, the People's Republic of China.

How the Company Makes Money

ZX Inc. generates revenue through multiple streams, primarily by selling software licenses and subscription-based services for its enterprise solutions. The company also earns income from consulting and implementation services, which help clients effectively integrate its technology into their operations. Additionally, ZX Inc. has established strategic partnerships with major cloud service providers, enabling it to offer bundled services that enhance its market reach and customer base. The growing demand for cybersecurity solutions and data analytics further contributes to its revenue growth, as businesses increasingly prioritize digital security and insights-driven decision-making.

ZX Inc. Financial Statement Overview

Summary

ZX Inc. is experiencing financial difficulties with declining revenues and profitability. Despite an improved debt-to-equity ratio, the company faces significant cash flow challenges, with negative operating cash flow and net income. These issues highlight the need for strategic adjustments to enhance financial health.

Income Statement

ZX Inc. has experienced a significant decline in revenue over the past year, with a revenue decrease from $6.51 billion in 2023 to $5.58 billion in 2024. The gross profit margin remains relatively strong at approximately 72.1% in 2024, but the net profit margin has turned negative due to a net loss of $3.62 million. EBIT and EBITDA margins have also deteriorated, indicating challenges in operational efficiency and profitability.

Balance Sheet

The company's debt-to-equity ratio has improved from 1.41 in 2023 to 0.74 in 2024, indicating a reduction in leverage. However, the equity ratio remains moderate at 43.1%, suggesting a balanced capital structure. Return on equity has turned negative due to the net loss, highlighting profitability concerns. The balance sheet shows a reduction in total assets, reflecting potential divestments or asset write-downs.

Cash Flow

ZX Inc. faces significant cash flow challenges, with a negative operating cash flow of $1.99 billion in 2024. The free cash flow remains negative, although it has slightly improved compared to the previous year. The operating cash flow to net income ratio is negative, indicating inefficiencies in converting earnings into cash. The company needs to address its cash flow issues to ensure financial stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.36B	5.58B	6.51B	8.82B	5.74B	2.87B
Gross Profit	2.87B	4.02B	4.57B	6.41B	4.74B	2.44B
EBITDA	777.05M	59.72M	477.81M	715.77M	741.64M	-1.20B
Net Income	981.28M	-3.62M	235.49M	514.07M	615.91M	-1.30B
Balance Sheet
Total Assets	5.70B	5.56B	7.27B	9.80B	6.56B	3.86B
Cash, Cash Equivalents and Short-Term Investments	1.78B	1.26B	899.69M	1.53B	1.85B	943.92M
Total Debt	1.14B	1.77B	3.21B	6.41B	3.72B	1.87B
Total Liabilities	2.43B	3.14B	4.99B	8.09B	5.38B	3.20B
Stockholders Equity	3.19B	2.40B	2.29B	1.73B	1.18B	662.18M
Cash Flow
Free Cash Flow	-1.16B	-2.05B	-2.57B	2.11B	2.59B	-346.59M
Operating Cash Flow	-1.14B	-2.00B	-2.35B	2.28B	2.63B	-301.53M
Investing Cash Flow	929.31M	2.10B	2.86B	-3.21B	-2.30B	689.73M
Financing Cash Flow	0.00	-67.72M	-232.31M	443.13M	-32.30M	-25.46M

ZX Inc. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 18.33
• 50DMA: Negative
• 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:9890, the sentiment is Neutral. The current price of 18.33 is below the 20-day moving average (MA) of 18.66, below the 50-day MA of 18.63, and above the 200-day MA of 15.32, indicating a neutral trend. The MACD of -0.33 indicates Positive momentum. The RSI at 40.77 is Neutral, neither overbought nor oversold. The STOCH value of 25.03 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HK:9890.

ZX Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
6860	66 Neutral	HK$379.34M	33.47	3.47%	―	-25.66%	-23.36%
9890	61 Neutral	HK$9.00B	2.76	35.10%	―	-31.38%	―
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
6933	53 Neutral	HK$214.00M	-5.87	-28.25%	―	-3.02%	72.76%
8267	51 Neutral	HK$112.70M	6.06	-2.01%	―	20.90%	70.71%
2022	42 Neutral	HK$100.25M	-7.80	-8.08%	―	-5.90%	60.75%
0302	39 Underperform	HK$943.56M	-0.52	-70.09%	―	-36.80%	-666.80%

ZX Inc. Corporate Events

Tanwan Inc. Completes HK$468 Million Zero-Coupon Convertible Bond Issue

Tanwan Inc. has completed the issuance of HK$468 million zero-coupon convertible bonds due 2027, following satisfaction of all conditions under its subscription and placing agreement, with all bonds placed to an independent third-party subscriber. The bonds carry an initial conversion price of HK$23.50 per share and, if fully converted, will result in the issuance of 19,914,804 new shares, representing about 3.79% of the current issued share capital (excluding treasury shares) and 3.65% of the enlarged share base, providing the company with estimated net proceeds of approximately HK$458.6 million to support its capital needs and potentially strengthen its balance sheet while moderately diluting existing shareholders.

The most recent analyst rating on (HK:9890) stock is a Hold with a HK$18.00 price target. To see the full list of analyst forecasts on ZX Inc. stock, see the HK:9890 Stock Forecast page.

Tanwan Inc. Unveils Convertible Bond Plans for AI Expansion

Tanwan Inc. has announced plans to issue HK$468 million zero-coupon convertible bonds due 2027 to accelerate investments in AI-related businesses and equity ventures, aligning with its ‘AI+Game’ strategic vision. These bonds represent approximately 3.79% of the company’s existing shares and offer a significant premium upon conversion, emphasizing the company’s aggressive strategy to strengthen its industry positioning in cutting-edge AI applications within gaming.

The most recent analyst rating on (HK:9890) stock is a Hold with a HK$18.00 price target. To see the full list of analyst forecasts on ZX Inc. stock, see the HK:9890 Stock Forecast page.

Tanwan Inc. Expands Pop Toy Industry Presence with New Artist Collaboration

Tanwan Inc. has announced a strategic cooperation agreement with COEXIST Group to integrate over 200 pop toy artists for the development, sales, and promotion of artistic works. This five-year collaboration aims to expand Tanwan’s presence in the pop toy industry by creating a new ‘Artist IP’ paradigm, leveraging its strengths in digital entertainment to drive the diversified value release of artistic IPs and enhance its business ecosystem.

The most recent analyst rating on (HK:9890) stock is a Hold with a HK$14.50 price target. To see the full list of analyst forecasts on ZX Inc. stock, see the HK:9890 Stock Forecast page.