Hong Leong Asia (H22) AI Stock Analysis

• Market Cap: S$1.66B
• Dividend Yield: 2.23%
• Average Volume (3M): 1.54M
• Price to Earnings (P/E): 17.6
• Beta (1Y): 1.02
• 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: 1,517,790
• 30 Day Avg. Volume: 1,543,006
• 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$2.82
• Price Target Upside: 25.89% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 60 Neutral
• Price Target: S$2.00 ▼(-10.71% Downside)

Hong Leong Asia's overall stock score is driven by solid financial performance, despite bearish technical indicators. The valuation is fair, but technical analysis suggests caution due to oversold conditions and downward momentum.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong demand for Hong Leong Asia's products, enhancing its market position and long-term profitability.

Cash Flow Generation

Robust cash flow generation supports Hong Leong Asia's ability to invest in growth opportunities and maintain financial stability.

Market Position

Strong market position in powertrain solutions signifies competitive advantage and potential for sustained growth in key markets.

Negative Factors

Profitability Margins

Decreasing margins suggest potential operational inefficiencies, which could impact long-term profitability if not addressed.

Leadership Stability

Leadership changes amidst investigations can affect governance and operational stability, posing risks to strategic execution.

Operational Efficiency

Reduced operational efficiency may hinder Hong Leong Asia's ability to optimize costs and sustain profitability over time.

Hong Leong Asia Business Overview & Revenue Model

Company Description

Hong Leong Asia Ltd., an investment holding company, manufactures and distributes diesel engines and related products, building materials, and rigid packaging products in the People's Republic of China, Singapore, Malaysia, and internationally. Its Diesel Engines segment offers diesel engines and automobile spare parts. The company's Building Materials segment manufactures and supplies cement, pre-cast concrete elements, ready-mix concrete, and quarry products for public housing construction. The Rigid Packaging segment provides plastic packaging related products and container components. It is also involved in hospitality and property development activities. The company was founded in 1941 and is headquartered in Singapore. Hong Leong Asia Ltd. is a subsidiary of Hong Leong Corporation Holdings Pte Ltd.

How the Company Makes Money

Hong Leong Asia generates revenue through multiple streams, primarily from its manufacturing operations and distribution of building materials and automotive products. The company earns money by selling its products directly to construction companies, contractors, and automotive manufacturers. Additionally, it benefits from long-term contracts and partnerships with key players in the construction and automotive industries, which provide stable revenue inflows. The company's focus on expanding its production capacity and improving operational efficiency also contributes to its profitability.

Hong Leong Asia Financial Statement Overview

Summary

Hong Leong Asia demonstrates a solid financial performance with strong revenue growth and improved cash flow generation. While profitability margins have seen some pressure, the company's leverage remains manageable, and equity returns are healthy.

Income Statement

Hong Leong Asia's income statement shows a positive trajectory with a 6.37% revenue growth in the TTM period. Gross profit margin is stable at 15.44%, though slightly lower than previous periods. Net profit margin improved to 1.95%, indicating better cost management. However, EBIT and EBITDA margins have decreased, suggesting potential operational inefficiencies.

Balance Sheet

The balance sheet reflects a moderate debt-to-equity ratio of 0.83, showing a manageable level of leverage. Return on equity is at 9.31%, indicating effective use of equity to generate profits. The equity ratio stands at 15.54%, suggesting a solid equity base relative to total assets.

Cash Flow

Cash flow analysis reveals a strong free cash flow growth of 44.94% in the TTM period, highlighting improved cash generation. The operating cash flow to net income ratio is 0.18, and free cash flow to net income ratio is 0.85, indicating robust cash flow relative to earnings.

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: 2.24
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 2.24 is above the 20-day moving average (MA) of 2.15, below the 50-day MA of 2.31, and above the 200-day MA of 1.77, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 54.11 is Neutral, neither overbought nor oversold. The STOCH value of 86.48 is Negative, 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$742.43M	8.32	11.64%	4.61%	-3.11%	28.89%
N0Z	71 Outperform	S$40.73M	5.92	5.45%	3.97%	30.99%	-7.99%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%
H22	60 Neutral	S$1.66B	17.62	9.55%	2.23%	13.38%	12.70%

Hong Leong Asia Corporate Events

China Yuchai Increases Stake in HL Global Enterprises

China Yuchai International Limited has increased its stake in HL Global Enterprises Limited from 48.90% to 49.11% by acquiring 200,000 shares at S$0.331 per share. This move enhances China Yuchai’s influence in HLGE, which operates the Copthorne Hotel Cameron Highlands in Malaysia and is listed on the Singapore Exchange. The acquisition reflects China Yuchai’s strategic efforts to strengthen its market position and diversify its interests, potentially impacting its operational dynamics and stakeholder relations.

China Yuchai Director Resigns Amid Disciplinary Investigation

China Yuchai International Limited announced that Mr. Wu Qiwei, a director of the company and its main operating subsidiary, has resigned following an investigation by regional authorities for suspected serious violations of discipline and law. This development could have implications for the company’s governance and operational stability, as Mr. Wu’s departure comes amidst scrutiny by the Guangxi Zhuang Autonomous Region and the Yulin Municipal Supervisory Commission.

China Yuchai Announces Board Resignation Amidst Continued Market Leadership

China Yuchai International Limited announced the resignation of Mr. Wu Qiwei as a Director of both the company and its main operating subsidiary, Guangxi Yuchai Machinery Company Limited, effective October 27, 2025. This change reduces the board to eight directors, three of whom are independent. The resignation may impact the company’s governance structure but the company remains a leading player in the powertrain solutions market in China, continuing to expand its global footprint.

China Yuchai Launches Innovative High-Horsepower Generator Engine

China Yuchai International Limited has launched the YC16VTF engine, a new high-horsepower generator engine, through its subsidiary Yuchai Marine and Genset Power Company Limited. This engine represents a significant advancement in high-speed, high-horsepower technology, aligning with the company’s strategy to lead the high-end marine and power generation markets in China. The YC16VTF engine addresses the rising global demand for reliable and environmentally friendly power generation solutions, featuring innovative design concepts that achieve high strength and reduced weight. It supports the national ‘dual carbon’ strategy and promotes green industrial transformation, marking a milestone in Yuchai’s power engine portfolio.

China Yuchai International Reports Detention of Key Executives

China Yuchai International Limited has announced that Wu Qiwei, a Director and President of its main subsidiary Yuchai, along with former Chief Accountant Qin Xiaohong, have been detained by Chinese authorities. Despite the detentions, Yuchai’s operations continue uninterrupted under the leadership of Chairman Li Hanyang, with Vice President Chen Hai stepping in as acting President. The reasons for the detentions remain unclear, but the company assures stakeholders that business activities are proceeding as usual.