Activation Group Holdings Ltd. (9919) AI Stock Analysis

• Market Cap: HK$789.43M
• Dividend Yield: 8.86%
• Average Volume (3M): 249.56K
• Price to Earnings (P/E): 8.6
• Beta (1Y): 0.43
• Revenue Growth: -9.72%
• EPS Growth: -13.36%
• Country: HK
• Employees: 221
• Sector: Communication Services
• Sector Strength: 97
• Industry: Advertising Agencies
• EPS (TTM): 0.05
• Shares Outstanding: 744,742,000
• 10 Day Avg. Volume: 254,862
• 30 Day Avg. Volume: 249,557
• PEG Ratio: -0.29
• Price to Book (P/B): 1.78
• Price to Sales (P/S): 0.72
• P/FCF Ratio: 3.63
• 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): 0.94
• Revenue Forecast (FY): HK$7.31B

• Rating: 71 Outperform
• Price Target: HK$1.00 ▼(-6.54% Downside)

Activation Group Holdings Ltd. scores well due to its strong valuation metrics, particularly the attractive P/E ratio and high dividend yield. However, the overall score is moderated by technical indicators suggesting potential bearish momentum and financial performance challenges, particularly in revenue and cash flow.

Positive Factors

Strong Balance Sheet

A strong balance sheet with low leverage risk provides financial stability, allowing the company to invest in growth opportunities and weather economic downturns.

Diverse Revenue Streams

Diverse revenue streams reduce dependency on a single source, enhancing resilience against market fluctuations and enabling sustainable growth.

Healthy Profit Margins

Consistent profit margins indicate efficient operations and pricing power, supporting long-term profitability and competitive positioning.

Negative Factors

Declining Revenue

A declining revenue trend can hinder growth prospects and reduce market competitiveness, necessitating strategic initiatives to reverse this trend.

Cash Flow Challenges

Lack of free cash flow signals potential issues in cash generation, which can limit investment capacity and operational flexibility.

Decreasing Return on Equity

A declining return on equity may indicate reduced efficiency in generating returns for shareholders, impacting investor confidence and valuation.

Activation Group Holdings Ltd. Business Overview & Revenue Model

Company Description

Activation Group Holdings Limited, an investment holding company, primarily provides integrated marketing solutions in Mainland China, Hong Kong, and Singapore. It operates through three segments: Experiential Marketing Services, Digital and Communication Services, and IP Development. The company offers integrated marketing solutions, including experiential marketing, digital and brand communication, and public relations services. It also provides digital and communication, public relation, and application development services; and manages and operates sport events. The company was founded in 2013 and is headquartered in Shanghai, the People's Republic of China.

How the Company Makes Money

Activation Group Holdings Ltd. generates revenue through multiple streams, primarily from service fees associated with its digital marketing and advertising solutions. The company charges clients for campaign management, data analytics services, and software licensing. Additionally, it benefits from partnerships with technology firms, which enable it to integrate advanced tools and platforms into its offerings, enhancing value for customers. Performance-based contracts also play a significant role in its revenue model, allowing the company to earn commissions based on the success of its marketing initiatives. These diverse revenue sources, combined with a focus on expanding its client base across various industries, contribute to the company's overall earnings.

Activation Group Holdings Ltd. Financial Statement Overview

Summary

Activation Group Holdings Ltd. shows strong profitability and a robust balance sheet, but faces challenges with declining revenue and cash flow. The company needs to address these issues to maintain financial health.

Income Statement

Activation Group Holdings Ltd. has shown strong profitability with a healthy gross profit margin of around 30% in recent years. However, revenue has decreased from 2023 to 2024 by approximately 12.34%, impacting overall financial results. The net profit margin decreased from 11.17% in 2023 to 9.35% in 2024 while maintaining a stable EBIT margin. The company needs to focus on reversing the declining revenue trend to improve future performance.

Balance Sheet

The company maintains a strong balance sheet with an impressively low debt-to-equity ratio of 0.02 and a high equity ratio of around 45.76% as of 2024, indicating financial stability and low leverage risk. The return on equity has slightly decreased from 31.79% in 2023 to 23.21% in 2024, which remains robust, though there is room for improvement to enhance shareholder returns.

Cash Flow

Cash flow analysis reveals challenges, as free cash flow dropped to zero in 2024. In previous years, the company demonstrated strong free cash flow growth, but the current lack of free cash flow signals potential issues in cash generation. The absence of operating cash flow in 2024 is concerning and requires attention to ensure long-term financial health.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	843.05M	847.75M	967.23M	694.81M	904.06M	458.00M
Gross Profit	255.94M	254.27M	298.22M	202.24M	267.28M	131.65M
EBITDA	118.08M	125.65M	170.39M	42.03M	137.21M	29.66M
Net Income	84.41M	79.24M	107.99M	23.63M	92.49M	23.42M
Balance Sheet
Total Assets	602.73M	745.91M	795.40M	711.25M	716.24M	588.60M
Cash, Cash Equivalents and Short-Term Investments	288.69M	379.19M	307.08M	300.27M	408.67M	305.48M
Total Debt	9.54M	7.80M	6.58M	9.60M	8.74M	13.74M
Total Liabilities	261.49M	384.76M	435.43M	357.66M	286.83M	215.76M
Stockholders Equity	324.77M	341.36M	339.77M	336.31M	406.31M	359.93M
Cash Flow
Free Cash Flow	108.32M	167.65M	113.71M	57.82M	171.11M	-29.96M
Operating Cash Flow	109.18M	169.61M	115.12M	61.00M	175.36M	-29.06M
Investing Cash Flow	-189.00K	-278.00K	-504.00K	-38.71M	347.00K	10.55M
Financing Cash Flow	-26.41M	-97.71M	-103.97M	-127.44M	-68.91M	199.73M

Activation Group Holdings Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.07
• 50DMA: Positive
• 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:9919, the sentiment is Positive. The current price of 1.07 is above the 20-day moving average (MA) of 1.05, above the 50-day MA of 1.04, and above the 200-day MA of 0.93, indicating a bullish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 53.82 is Neutral, neither overbought nor oversold. The STOCH value of 22.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HK:9919.

Activation Group Holdings Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9919	71 Outperform	HK$789.43M	8.65	26.71%	8.86%	-9.72%	-13.36%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
2422	56 Neutral	HK$1.42B	-21.35	-16.52%	―	10.61%	-1448.48%
1490	51 Neutral	HK$211.29M	-53.53	-0.67%	―	2.85%	-118.89%
1993	39 Underperform	HK$231.91M	-5.29	―	―	-38.24%	-31.99%
8500	38 Underperform	HK$59.62M	-3.12	-96.94%	―	-55.50%	84.93%