Hong Leong Asia (H22) AI Stock Analysis

• Market Cap: S$1.96B
• Dividend Yield: 1.92%
• Average Volume (3M): 1.64M
• Price to Earnings (P/E): 20.8
• Beta (1Y): 1.01
• Revenue Growth: 13.38%
• EPS Growth: 12.70%
• Country: SG
• Employees: 10,306
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Manufacturers
• EPS (TTM): 0.07
• Shares Outstanding: 748,141,300
• 10 Day Avg. Volume: 1,574,720
• 30 Day Avg. Volume: 1,638,353
• PEG Ratio: -0.38
• Price to Book (P/B): 0.67
• Price to Sales (P/S): 0.17
• P/FCF Ratio: 3.98
• 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: S$2.91
• Price Target Upside: 11.49% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 73 Outperform
• Price Target: S$3.00 ▲(14.94% Upside)

Hong Leong Asia's stock is supported by strong technical momentum and solid financial performance, with positive revenue and cash flow growth. However, the stock's valuation is moderate, and technical indicators suggest it may be nearing overbought conditions, which could limit short-term upside.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term financial health.

Cash Generation

Robust cash generation enhances financial flexibility, allowing for strategic investments and debt management, strengthening future prospects.

Market Position

A diversified business model reduces risk exposure and capitalizes on multiple growth opportunities, ensuring long-term stability.

Negative Factors

Operational Efficiency

Inefficiencies in operations can lead to higher costs and lower margins, potentially impacting profitability and competitive positioning.

Free Cash Flow Volatility

Volatile free cash flow can hinder planning and investment, affecting the company's ability to sustain growth and manage financial obligations.

EBIT and EBITDA Margins

Declining margins suggest potential cost pressures or inefficiencies, which could weaken profitability and reduce competitiveness over time.

Hong Leong Asia Business Overview & Revenue Model

Company Description

Hong Leong Asia (H22) is an investment holding company headquartered in Singapore. It operates through various segments including diesel engines, building materials, and distribution and manufacturing of consumer products. The company is known for its diverse portfolio that spans across different industries, providing products and services that cater to both industrial and consumer markets.

How the Company Makes Money

Hong Leong Asia generates revenue primarily through the sale of diesel engines and related components, which are used in a variety of industrial applications. The building materials segment contributes to its earnings by supplying construction products such as ready-mixed concrete and precast concrete products, which are in demand for infrastructure and real estate development projects. Additionally, the company earns income from its consumer products division, which distributes and manufactures a range of household appliances and goods. Strategic partnerships and collaborations with businesses across Asia further enhance its market reach and profitability.

Hong Leong Asia Financial Statement Overview

Summary

Hong Leong Asia shows stability with a strong equity base and manageable debt. Income statement metrics reveal stable margins but highlight challenges in net profitability and revenue growth. Cash flow analysis indicates effective operational cash generation, but variability in free cash flow growth suggests room for improvement.

Income Statement

The gross profit margin is fairly consistent, indicating stable cost management. The net profit margin is lower, suggesting challenges in converting revenue into profit. Revenue growth is negative in recent years, with a decline from 2021 to 2024. EBIT and EBITDA margins are moderate, reflecting some profitability but with room for improvement.

Balance Sheet

The company maintains a healthy equity ratio, demonstrating a strong capital structure with substantial equity backing. The debt-to-equity ratio is moderate, indicating manageable leverage levels. Return on equity is reasonable but shows potential for enhancement to increase shareholder value.

Cash Flow

Free cash flow growth has been volatile, with a significant decline in recent years. The operating cash flow to net income ratio is strong, suggesting effective cash generation from operations. However, free cash flow to net income ratio indicates variability in capital expenditure management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.83B	4.08B	4.25B	3.88B	4.93B	4.50B
Gross Profit	745.33M	684.48M	730.80M	681.59M	729.44M	719.45M
EBITDA	227.68M	365.09M	379.95M	304.51M	324.44M	366.32M
Net Income	94.24M	64.88M	87.78M	54.54M	60.12M	46.74M
Balance Sheet
Total Assets	6.49B	5.81B	5.50B	5.32B	5.99B	5.86B
Cash, Cash Equivalents and Short-Term Investments	1.54B	1.35B	1.23B	1.01B	1.22B	1.35B
Total Debt	835.17M	920.75M	930.50M	915.20M	943.29M	838.39M
Total Liabilities	4.06B	3.36B	3.13B	2.96B	3.46B	3.44B
Stockholders Equity	1.01B	1.01B	922.01M	902.55M	956.90M	879.97M
Cash Flow
Free Cash Flow	542.71M	170.97M	262.85M	-112.33M	-70.01M	63.66M
Operating Cash Flow	641.61M	289.64M	362.04M	37.65M	130.67M	306.07M
Investing Cash Flow	-51.03M	-29.36M	-72.41M	-69.36M	-238.57M	-168.71M
Financing Cash Flow	-300.28M	-155.30M	-49.38M	-63.56M	-85.30M	-126.47M

Hong Leong Asia Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.61
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SG:H22, the sentiment is Positive. The current price of 2.61 is above the 20-day moving average (MA) of 2.52, above the 50-day MA of 2.34, and above the 200-day MA of 1.45, indicating a bullish trend. The MACD of 0.09 indicates Negative momentum. The RSI at 59.39 is Neutral, neither overbought nor oversold. The STOCH value of 62.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SG:H22.

Hong Leong Asia Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QES	79 Outperform	S$737.58M	8.27	11.64%	0.67%	-3.11%	28.89%
H22	73 Outperform	S$1.96B	20.79	9.55%	1.92%	13.38%	12.70%
N0Z	72 Outperform	S$39.44M	5.73	5.45%	4.10%	30.99%	-7.99%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Hong Leong Asia Corporate Events

China Yuchai to Announce 2025 First-Half Financial Results

China Yuchai International Limited announced it will release its unaudited financial results for the first half of 2025 on August 8, 2025, before the market opens. An earnings call and audio webcast will be held on the same day, hosted by the company’s President and CFO, to discuss the results and engage with analysts and investors. This announcement is significant for stakeholders as it provides insights into the company’s financial performance and strategic direction.

The most recent analyst rating on (SG:H22) stock is a Buy with a S$1.60 price target. To see the full list of analyst forecasts on Hong Leong Asia stock, see the SG:H22 Stock Forecast page.

Hong Leong Asia’s Subsidiary CYI Launches Equity Incentive Plan

Hong Leong Asia Ltd.’s subsidiary, China Yuchai International Limited, has announced the adoption of a 2025 Equity Incentive Plan aimed at incentivizing and retaining key employees and directors. This plan, approved during CYI’s annual general meeting, is designed to enhance employee loyalty and motivation by offering equity participation, which could positively impact the company’s operational success and stakeholder value.

The most recent analyst rating on (SG:H22) stock is a Buy with a S$1.60 price target. To see the full list of analyst forecasts on Hong Leong Asia stock, see the SG:H22 Stock Forecast page.

China Yuchai Declares US$0.53 Dividend for FY2024

China Yuchai International Limited has announced a cash dividend of US$0.53 per ordinary share for the fiscal year 2024, to be paid on July 7, 2025. This decision reflects the company’s robust financial performance and commitment to delivering shareholder value, potentially strengthening its market position and investor confidence.

The most recent analyst rating on (SG:H22) stock is a Buy with a S$1.60 price target. To see the full list of analyst forecasts on Hong Leong Asia stock, see the SG:H22 Stock Forecast page.

Hong Leong Asia Ltd. Holds 64th Annual General Meeting

Hong Leong Asia Ltd. held its Sixty-Fourth Annual General Meeting at M Hotel Singapore, attended by its Board of Directors, shareholders, and auditors from Ernst & Young LLP. The meeting focused on the company’s governance and operational matters, with discussions led by key executives including Executive Chairman Mr. Kwek Leng Peck and CEO Mr. Stephen Ho Kiam Kong. The AGM provided a platform for stakeholders to engage with the company’s leadership, ensuring transparency and accountability in its corporate practices.

The most recent analyst rating on (SG:H22) stock is a Buy with a S$1.60 price target. To see the full list of analyst forecasts on Hong Leong Asia stock, see the SG:H22 Stock Forecast page.

Hong Leong Asia’s Sky Cloud Completes Phase One of Equity Incentive Scheme

Hong Leong Asia Ltd. announced the completion of Phase One of its Equity Incentive Scheme by its Chinese subsidiary, Sky Cloud. This phase involved awarding a 17.28% interest in Sky Cloud’s enlarged registered capital to participants, following a valuation of RMB7.70 million. The move is part of a broader strategy to incentivize and align stakeholders with the company’s growth objectives.