Yau Lee Holdings Limited (0406) AI Stock Analysis

Yau Lee Holdings Limited

(HKEX:0406)

Select Model

Rating:38Underperform

Price Target:HKD 0.46▼(-7.88% Downside)

Action:reiterated

Date:08/17/26

The score is weighed down most by weak financial performance, especially negative profitability and cash flow pressure. Technicals are neutral-to-soft and provide little offset, while valuation is also unattractive due to negative earnings.

Positive Factors

Strong Revenue GrowthSustained revenue expansion over three consecutive years indicates strong project activity and continued demand for the group’s construction and engineering services. If execution remains disciplined, this larger revenue base can support operating scale, improve market presence, and provide a foundation for future earnings recovery.

Negative Factors

Losses and Margin CompressionThe shift from profit to increasingly large losses, combined with negative operating margins and sharply lower gross margins, shows that higher revenue is not translating into profitable growth. Persistent cost pressure or weaker project pricing could constrain reinvestment and undermine earnings recovery over the next several quarters.

Yau Lee Holdings Limited (0406) vs. iShares MSCI Hong Kong ETF (EWH)

Market Cap: HKD 216.84M
Dividend Yield: ―
Average Volume (3M): 52.71K
Price to Earnings (P/E): -1.1
Beta (1Y): 0.10
Revenue Growth: 13.50%
EPS Growth: -106.11%
Country: Hong Kong
Employees: 4,500
Sector: Industrials
Sector Strength: 63
Industry: Engineering & Construction

Yau Lee Holdings Limited Business Overview & Revenue Model

Company Description

Yau Lee Holdings Limited, established in 1958 and headquartered in Kowloon Bay, Hong Kong, functions as an investment holding company. Its primary business centers on the construction industry, with operations spanning Hong Kong, Macau, Singapore, an...

How the Company Makes Money

The company primarily makes money through contracting revenue earned from delivering construction and engineering projects. Its core revenue model is project-based: it bids for and is awarded contracts, then recognizes revenue as it performs work (ty...

Yau Lee Holdings Limited Financial Statement Overview

Summary

Revenue growth is strong, but profitability has turned negative, leverage has risen sharply, and cash flow has weakened materially. The company’s recent financial trajectory is stressed, with losses, margin compression, and fragile cash generation outweighing top-line momentum.

Income Statement

34Negative

Balance Sheet

38Negative

Cash Flow

29Negative

Financial statement breakdown
Breakdown	TTM	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	10.92B	10.92B	9.62B	7.81B	6.69B	6.73B
Gross Profit	447.38M	447.38M	134.94M	682.48M	552.31M	659.23M
EBITDA	-48.72M	-52.26M	150.21M	226.98M	185.12M	211.00M
Net Income	-203.77M	-203.77M	-98.88M	67.09M	49.64M	68.19M
Balance Sheet
Total Assets	7.17B	7.17B	6.57B	5.73B	4.85B	4.74B
Cash, Cash Equivalents and Short-Term Investments	1.13B	1.13B	718.65M	905.59M	742.58M	934.31M
Total Debt	3.23B	3.23B	2.79B	2.31B	1.38B	1.35B
Total Liabilities	5.94B	5.94B	5.20B	4.22B	3.35B	3.20B
Stockholders Equity	1.23B	1.23B	1.38B	1.51B	1.51B	1.54B
Cash Flow
Free Cash Flow	-86.56M	21.81M	-450.67M	-623.19M	-285.56M	750.49M
Operating Cash Flow	17.50M	125.87M	-280.08M	-463.32M	-237.30M	813.44M
Investing Cash Flow	-101.81M	-94.33M	-133.15M	-148.43M	-26.21M	-20.28M
Financing Cash Flow	434.93M	342.84M	270.77M	791.25M	25.95M	-517.72M

Yau Lee Holdings Limited Technical Analysis

Technical Analysis SentimentNegative

Last Price0.49

Price Trends

50DMA0.51Negative

100DMA0.53Negative

200DMA0.63Negative

Market Momentum

MACD-0.01Negative

RSI47.25Neutral

STOCH44.44Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:0406, the sentiment is Negative. The current price of 0.49 is below the 20-day moving average (MA) of 0.50, below the 50-day MA of 0.51, and below the 200-day MA of 0.63, indicating a bearish trend. The MACD of -0.01 indicates Negative momentum. The RSI at 47.25 is Neutral, neither overbought nor oversold. The STOCH value of 44.44 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:0406.

Yau Lee Holdings Limited Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

HK:0406 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HK:0240	84Outperform	HKD 1.73B	3.76	15.72%	12.19%	-12.79%	-0.62%
HK:3311	74Outperform	HKD 45.85B	5.36	10.83%	7.08%	-14.20%	-12.79%
HK:0687	71Outperform	HKD 1.08B	23.19	4.18%	18.75%	-18.58%	-27.75%
Sector *	63Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
HK:0610	54Neutral	HKD 725.71M	0.94	31.00%	―	-12.39%	―
HK:0896	47Neutral	HKD 316.56M	-0.35	-31.01%	―	-22.33%	-203.23%
HK:0406	38Underperform	HKD 216.84M	-1.07	-15.28%	―	13.50%	-106.11%

* Industrials Sector Average

Performance Comparison

HK:0406 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
HK:0406	Yau Lee Holdings Limited	0.49	-0.20	-29.29%
HK:0240	Build King Holdings	1.39	-0.01	-0.43%
HK:3311	China State Construction International Holdings	8.68	0.33	3.90%
HK:0896	Hanison Construction Holdings	0.29	0.05	19.43%
HK:0610	Wai Kee Holdings Limited	0.92	0.16	20.39%
HK:0687	Tysan Holdings Limited	0.32	0.05	17.65%

Yau Lee Holdings Limited Corporate Events

Yau Lee Wins Unanimous Shareholder Backing for AGM Resolutions and Capital Mandates

Aug 17, 2026

Yau Lee Holdings Limited reported that all resolutions proposed at its annual general meeting on 17 August 2026 were approved by shareholders through a poll, reflecting unanimous support from the 276,071,515 votes cast. The meeting received and adopt...

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Date of analysis: Aug 17, 2026

Yau Lee Holdings Limited AI Stock Analysis