Hong Leong Finance Limited (S41) AI Stock Analysis

• Market Cap: S$1.16B
• Dividend Yield: 4.92%
• Average Volume (3M): 171.59K
• Price to Earnings (P/E): 13.9
• Beta (1Y): 0.26
• Revenue Growth: -10.51%
• EPS Growth: -15.79%
• Country: SG
• Employees: 632
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 0.07
• Shares Outstanding: 449,493,800
• 10 Day Avg. Volume: 99,460
• 30 Day Avg. Volume: 171,586
• PEG Ratio: 1.12
• Price to Book (P/B): 0.53
• Price to Sales (P/S): 4.75
• P/FCF Ratio: -3.58
• 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 (S41) is a leading financial services company based in Singapore. The company operates primarily in the finance sector, offering a wide range of financial products and services. These include personal and commercial loans, deposit services, government assistance programs, and corporate finance advisory. Hong Leong Finance is known for its commitment to providing tailored financial solutions to individuals and businesses, ensuring customer satisfaction and financial growth.

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	214.37M	233.28M	216.93M	353.69M	251.43M	151.06M
Gross Profit	214.37M	233.28M	579.20M	258.74M	189.42M	151.06M
EBITDA	0.00	0.00	0.00	165.05M	109.95M	82.64M
Net Income	83.71M	104.08M	93.37M	130.88M	84.82M	63.91M
Balance Sheet
Total Assets	14.68B	14.63B	14.96B	14.28B	12.95B	13.37B
Cash, Cash Equivalents and Short-Term Investments	1.28B	1.11B	1.50B	926.04M	828.65M	933.24M
Total Debt	1.07M	45.35M	17.92M	33.71M	37.44M	42.35M
Total Liabilities	12.58B	12.53B	12.90B	12.23B	10.99B	11.45B
Stockholders Equity	2.10B	2.11B	2.06B	2.04B	1.96B	1.92B
Cash Flow
Free Cash Flow	78.08M	-309.14M	144.59M	176.58M	-65.81M	-332.36M
Operating Cash Flow	80.14M	-307.27M	147.53M	178.01M	-65.41M	-332.01M
Investing Cash Flow	-2.07M	-1.87M	-91.50M	-1.43M	-399.00K	1.40M
Financing Cash Flow	110.64M	-81.02M	517.70M	1.15B	-38.78M	-23.81M

Hong Leong Finance Limited Technical Analysis

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

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SG:S41, the sentiment is Neutral. The current price of 2.61 is below the 20-day moving average (MA) of 2.62, above the 50-day MA of 2.59, and above the 200-day MA of 2.49, indicating a neutral trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 42.69 is Neutral, neither overbought nor oversold. The STOCH value of 16.67 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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$1.16B	13.88	4.02%	4.92%	-10.51%	-15.79%
U10	68 Neutral	€2.28B	10.36	10.50%	4.92%	7.87%	-4.03%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
HKB	54 Neutral	S$1.44B	22.83	―	―	―	―