Desane Group Holdings Ltd (DGH) AI Stock Analysis

• Market Cap: AU$34.36M
• Dividend Yield: N/A
• Average Volume (3M): 1.03K
• Price to Earnings (P/E): 121.7
• Beta (1Y): 0.07
• Revenue Growth: 4.43%
• EPS Growth: -89.73%
• Country: AU
• Employees: 7
• Sector: Real Estate
• Sector Strength: 69
• Industry: Real Estate - Services
• EPS (TTM): <0.01
• Shares Outstanding: 40,909,990
• 10 Day Avg. Volume: 307
• 30 Day Avg. Volume: 1,027
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.49
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -169.58
• 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: 50 Neutral
• Price Target: ―

Desane Group Holdings Ltd's overall score reflects a challenging operational environment with negative margins, despite revenue and net income growth. The balance sheet provides stability with low leverage, but cash conversion needs improvement. Technically, the stock shows a neutral to bearish trend, and a high P/E ratio raises valuation concerns. Addressing operational inefficiencies and improving cash flow conversion are key to future performance.

Desane Group Holdings Ltd Business Overview & Revenue Model

Company Description

Desane Group Holdings Limited, engages in the property development and investment activities in Australia. The company operates through Property Development, Property Investment, Property Project Management and Resale, and Property Services segments. It is involved in the development, management, and resale of commercial, industrial, and residential properties; leasing of properties; and provision of property and related services. The company was incorporated in 1986 and is based in Pyrmont, Australia.

How the Company Makes Money

DGH generates revenue primarily through its investment and development activities in the real estate sector. Key revenue streams include rental income from property holdings, profits from property sales, and fees from property management services. The company also engages in urban renewal and development projects, which contribute to earnings through the appreciation and sale of redeveloped properties. Strategic partnerships with construction firms, architects, and urban planners play a significant role in enhancing the value and profitability of its development projects.

Desane Group Holdings Ltd Financial Statement Overview

Summary

Desane Group Holdings Ltd exhibits a mixed financial performance. Revenue growth and net income improvement are offset by operational inefficiencies with negative EBIT and EBITDA margins. The balance sheet remains robust with low leverage and strong equity, providing a stable foundation. Cash flow improvements are a positive sign, though cash conversion remains an area for enhancement.

Income Statement

Desane Group Holdings Ltd has shown moderate revenue growth with a 12.11% increase from 2023 to 2024. Gross profit margin remains strong at 100%, indicating effective cost management. However, the company experienced an operational loss in 2024 with a negative EBIT margin of -34.54% and a negative EBITDA margin of -32.41%, highlighting operational challenges. Net profit margin improved to 73.12% due to non-operational income, but reliance on such income could be risky.

Balance Sheet

The company's balance sheet is stable with a moderate debt-to-equity ratio of 0.21, indicating prudent financial leverage. Return on equity is solid at 2.48%, reflecting decent profitability for shareholders. The equity ratio stands at 65.30%, suggesting a strong equity foundation. However, the increase in total liabilities could pose potential risks if continued.

Cash Flow

Free cash flow turned positive in 2024 with a significant improvement from the previous year, but the growth rate is skewed due to negative prior year figures. The operating cash flow to net income ratio is low at 0.49, indicating potential challenges in converting income into cash. The free cash flow to net income ratio is more favorable at 0.49, showing improvement but still reflecting room for better cash conversion.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
2.33M	2.25M	2.00M	1.80M	2.13M	1.52M
	Gross Profit
3.20M	2.25M	2.00M	1.80M	2.09M	1.48M
	EBIT
-154.00K	-776.00K	2.58M	-1.13M	-311.00K	-873.00K
	EBITDA
-1.53M	3.21M	2.63M	-1.08M	-258.00K	-969.00K
	Net Income Common Stockholders
82.65M	1.64M	1.32M	4.64M	1.81M	2.26M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
162.00K	8.57M	13.39M	13.21M	12.99M	18.53M
	Total Assets
98.49M	101.65M	98.76M	97.62M	87.64M	82.54M
	Total Debt
8.00M	13.90M	13.90M	13.90M	5.90M	5.90M
	Net Debt
7.84M	10.44M	11.20M	11.84M	5.55M	-4.30M
	Total Liabilities
31.27M	35.27M	34.02M	34.20M	28.87M	23.73M
	Stockholders Equity
67.21M	66.38M	64.74M	63.42M	58.78M	58.81M
Cash Flow		Free Cash Flow
-193.00K	807.00K	-1.43M	-335.00K	109.00K	-229.00K
	Operating Cash Flow
-193.00K	811.00K	-1.38M	-332.00K	120.00K	-199.00K
	Investing Cash Flow
-1.13M	-49.00K	2.02M	-5.06M	-8.13M	-33.03M
	Financing Cash Flow
-3.60M	0.00	0.00	7.10M	-1.84M	-2.15M

Desane Group Holdings Ltd Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.84
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:DGH, the sentiment is Positive. The current price of 0.84 is above the 20-day moving average (MA) of 0.82, above the 50-day MA of 0.80, and below the 200-day MA of 0.87, indicating a neutral trend. The MACD of 0.01 indicates Negative momentum. The RSI at 76.77 is Negative, neither overbought nor oversold. The STOCH value of 80.65 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:DGH.

Desane Group Holdings Ltd Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	60 Neutral	$2.76B	10.59	0.51%	8507.90%	5.51%	-19.44%
DGH	50 Neutral	AU$34.36M	121.74	0.42%	―	4.43%	-89.73%
CTOUF		$5.43B	283.42	1.03%	2.65%	―	―
GMGSF		$42.68B	64.85	5.14%	0.93%	―	―
GPTGF		$5.84B	―	-1.94%	5.19%	―	―
MRVGF		$5.66B	―	-6.29%	5.15%	―	―
STGPF		$12.19B	17.73	5.94%	4.80%	―	―

Desane Group Holdings Ltd Corporate Events

$6.6 Million Uplift in Desane’s Property Portfolio

Desane Group Holdings Limited announced a $6.6 million uplift in its property portfolio value, reflecting a 12.7% increase since June 2024. This increase, attributed to independent valuations of four properties, will enhance Desane’s net tangible asset per share by approximately 9 cents. The rise in property values is driven by strong investment demand for quality retail, office, and industrial properties, coupled with market rental growth and extended lease transactions. The diligent efforts of Desane’s property team in securing medium to long-term leases have contributed to this positive outcome, benefiting both the company and its shareholders.

Desane Secures Seven-Year Lease Extension with Signature Orthopaedics

Desane Properties Pty Ltd, a subsidiary of Desane Group Holdings Limited, has secured a seven-year lease extension with Signature Orthopaedics for its property at 7 Sirius Road, Lane Cove. This extension, which will generate approximately $5 million in rental income, reinforces Desane’s strategy to maintain a stable income stream. The property provides Signature Orthopaedics with strategic access to major roads and modern facilities necessary for their operations, which include manufacturing orthopaedic devices for both local and international markets.

Desane Group Projects Lower Earnings for Half-Year Ending December 2024

Desane Group Holdings Limited expects to report a significant decrease in earnings before interest and tax (EBIT) to between $1.5 million and $1.6 million for the six months ended 31 December 2024, compared to $3.6 million in the previous corresponding period. The final results are pending the completion of an audit review, with detailed operational performance to be disclosed with the audited financial statements on or before 28 February 2025. This anticipated drop in EBIT may impact Desane’s financial positioning and could influence stakeholder decisions.

Desane Secures Extended Lease with Brisbane City Council at Wacol

Desane Group Holdings Ltd, through its controlled entity Desane Properties Pty Ltd, has secured a lease extension with Brisbane City Council for its facility at Wacol until June 2030, ensuring approximately $4.5 million in rental income. This lease extension not only strengthens Desane’s investment strategy by maintaining a significant income stream but also signifies confidence from Brisbane City Council, Australia’s largest local government tenant. Additionally, Desane plans further development on the site, contingent on favorable construction cost conditions.