Hong Leong Finance Limited (S41) AI Stock Analysis

• Market Cap: S$1.13B
• Dividend Yield: 5.95%
• Average Volume (3M): 43.08K
• Price to Earnings (P/E): 10.9
• Beta (1Y): 0.20
• Revenue Growth: 3.85%
• EPS Growth: 11.43%
• Country: SG
• Employees: 632
• Sector: Financial
• Sector Strength: 73
• Industry: Banks - Regional
• EPS (TTM): 0.23
• Shares Outstanding: 448,650,940
• 10 Day Avg. Volume: 36,050
• 30 Day Avg. Volume: 43,076
• PEG Ratio: -0.87
• Price to Book (P/B): 0.53
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 10.58
• 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

• Rating: 72 Outperform
• Price Target: ―

Hong Leong Finance Limited demonstrates solid financial performance with strong profitability and a robust balance sheet. The valuation is attractive with a low P/E ratio and a high dividend yield. Technical analysis suggests a generally positive trend despite recent short-term weakness. Cash flow challenges are a concern but do not overshadow the company's overall stability and growth potential.

Hong Leong Finance Limited Business Overview & Revenue Model

Company Description

Hong Leong Finance Limited provides various financial services to business and retail customers in Singapore. It accepts savings and business current accounts, as well as fixed deposits. The company also offers new and used car, home, and private property loans, as well as mortgage equity and share financing services. In addition, it provides small and medium enterprise (SME) loans, including accounts receivable financing, block discounting, equipment loans, HDB SME loans, hire purchase, medical asset financing, property development loans, SME care programmes, SME property loans, suppliers' invoice financing/letters of credit, syndicated loans, and term loans/working capital loans, as well as enterprise finance schemes, such as SME fixed assets, SME working capital, and trade schemes. Further, the company offers corporate finance services, including issuing management and sponsoring services; corporate advisory services in the areas of financial advisory, independent financial advisory, mergers and acquisitions, and restructuring; and equity fund raising services, such as initial public offering, secondary fund raising, and underwriting of shares. It operates through a network of 28 branches and 12 SME centers. The company was incorporated in 1961 and is based in Singapore.

How the Company Makes Money

Hong Leong Finance Limited generates revenue through its diverse portfolio of financial services. The primary source of income comes from the interest earned on loans extended to individuals and businesses, which include personal loans, car loans, and business loans. Additionally, the company earns fee income from the provision of corporate finance advisory services and transactional fees. Deposit-taking activities also contribute to the company's earnings, as it utilizes customer deposits to fund its lending operations, earning a spread between the interest paid on deposits and the interest received from loans. Partnerships with government bodies for the distribution of government assistance programs further enhance its revenue streams. The company's strategic focus on understanding and meeting the financial needs of its clients, along with prudent financial management and risk assessment, play a crucial role in sustaining its profitability.

Hong Leong Finance Limited Financial Statement Overview

Summary

Hong Leong Finance Limited exhibits strong financial health with robust revenue growth and profitability. The balance sheet is particularly strong with no debt and solid equity, minimizing financial risk. Cash flow management exhibits room for improvement, with negative operating cash flows impacting liquidity. Overall, the company appears stable with a focus on growth and sustainability.

Income Statement

Hong Leong Finance Limited has demonstrated consistent revenue growth, with a notable increase of 7.54% in 2024. The net profit margin improved to 44.62% in 2024, indicating strong profitability. However, EBIT and EBITDA margins are not calculable due to missing data, which might suggest potential efficiency issues in operations.

Balance Sheet

The company maintains a solid balance sheet with zero debt and a strong equity position, reflected in a healthy equity ratio of 14.40% in 2024. The return on equity improved to 4.94%, showcasing effective use of shareholder funds. The absence of debt reduces financial risk significantly.

Cash Flow

Despite a high operating cash flow to net income ratio of -2.95 in 2024, indicating cash flow challenges, the company has managed its free cash flow effectively, though it saw a decline compared to previous years. The cash flow strategy appears to focus on maintaining liquidity, but the negative operating cash flow signals potential operational inefficiencies.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
474.42M	233.28M	216.93M	258.74M	189.42M	157.43M
	Gross Profit
722.82M	233.28M	579.20M	258.74M	189.42M	157.43M
	EBIT
103.77M	124.48M	128.80M	157.11M	101.94M	74.72M
	EBITDA
75.70M	0.00	0.00	165.05M	109.95M	82.64M
	Net Income Common Stockholders
122.78M	104.08M	93.37M	130.88M	84.82M	63.91M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
-1.50B	1.11B	1.16B	926.04M	828.65M	933.24M
	Total Assets
14.96B	14.63B	14.96B	14.28B	12.95B	13.37B
	Total Debt
17.92M	0.00	17.92M	33.71M	37.44M	42.35M
	Net Debt
-1.48B	-1.11B	-1.50B	-892.33M	-791.21M	-890.89M
	Total Liabilities
12.90B	12.53B	12.90B	12.23B	10.99B	11.45B
	Stockholders Equity
2.06B	2.11B	2.06B	2.04B	1.96B	1.92B
Cash Flow		Free Cash Flow
86.59M	-309.14M	144.59M	176.58M	-65.81M	-332.36M
	Operating Cash Flow
89.26M	-307.27M	147.53M	178.01M	-65.41M	-332.01M
	Investing Cash Flow
-8.16M	-1.87M	-91.50M	-1.43M	-399.00K	1.40M
	Financing Cash Flow
134.81M	-81.02M	517.70M	-79.28M	-38.78M	-23.81M

Hong Leong Finance Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2.52
• 50DMA: Positive
• 100DMA: Positive
• 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:S41, the sentiment is Positive. The current price of 2.52 is above the 20-day moving average (MA) of 2.51, above the 50-day MA of 2.47, and above the 200-day MA of 2.39, indicating a bullish trend. The MACD of 0.02 indicates Negative momentum. The RSI at 59.79 is Neutral, neither overbought nor oversold. The STOCH value of 83.33 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SG:S41.

Hong Leong Finance Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
S41	72 Outperform	S$1.13B	10.86	4.99%	5.95%	3.85%	11.43%
Sector *	64 Neutral	$12.77B	9.71	7.85%	78.06%	12.07%	-7.97%
4LJ		€1.22B	7.34	11.09%	6.69%	―	―
HKB		S$1.44B	22.83		―	―	―
S23		S$105.53M	17.32	2.40%	4.51%	―	―
S35		S$267.18M	7.35	8.10%	5.75%	―	―
TCU		S$311.03M	27.46	22.19%	2.99%	―	―