China Leon Inspection Holding Limited (1586) AI Stock Analysis

China Leon Inspection Holding Limited

(HKEX:1586)

Select Model

Rating:49Neutral

Price Target:HKD 1.50▲(10.29% Upside)

Action:reiterated

Date:08/28/26

The score is held back primarily by deteriorating fundamentals—especially the sharp drop in operating cash flow and negative free cash flow—alongside meaningful margin and ROE compression. Technicals add further downside pressure with the price below key moving averages and a negative MACD. Valuation is neutral-to-moderate (P/E ~19.5) and does not offset the financial and momentum weakness.

Positive Factors

Continued profitabilityThe company continues to generate positive earnings despite a weaker year, preserving an operating base that can support ongoing service delivery and reinvestment. Its record of solid margins from 2020–2024 also indicates that profitability has historically been an established feature of the business.

Negative Factors

Revenue contractionThe return to revenue decline signals a meaningful slowdown in demand, activity levels, or business conversion after several years of expansion. A shrinking top line can reduce operating leverage and make it harder for the company to absorb fixed personnel, laboratory, and service-delivery costs.

China Leon Inspection Holding Limited (1586) vs. iShares MSCI Hong Kong ETF (EWH)

Market Cap: HKD 760.52M
Dividend Yield: ―
Average Volume (3M): 48.42K
Price to Earnings (P/E): 18.1
Beta (1Y): 0.08
Revenue Growth: 13.24%
EPS Growth: -42.14%
Country: Hong Kong
Employees: 3,349
Sector: Industrials
Sector Strength: 63
Industry: Specialty Business Services

China Leon Inspection Holding Limited Business Overview & Revenue Model

Company Description

China Leon Inspection Holding Limited operates as an investment holding entity, providing comprehensive inspection, testing, and certification (ITC) solutions, with a primary focus on the energy and commodity industries. Its operational reach extends...

How the Company Makes Money

The company makes money primarily by charging service fees for third-party inspection and testing work performed for customers in commodity and industrial supply chains. Key revenue streams generally come from (i) inspection and surveying services (e...

China Leon Inspection Holding Limited Financial Statement Overview

Summary

Financial performance weakened materially in the latest year: revenue declined (2025: -3.9%), profitability compressed sharply (net margin ~2.9% vs ~6.5% in 2024), and returns fell (ROE ~8.6% vs ~17.7%). The balance sheet is still reasonably supported (moderate leverage with debt-to-equity ~0.47), but cash generation is the key concern with operating cash flow dropping to ~49m (from ~204m) and free cash flow turning negative (~-17.6m).

Income Statement

54Neutral

Balance Sheet

63Positive

Cash Flow

34Negative

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	1.25B	1.21B	1.19B	1.01B	828.94M	668.17M
Gross Profit	429.57M	407.87M	483.83M	434.79M	359.46M	282.66M
EBITDA	161.13M	155.43M	226.41M	210.37M	176.55M	130.26M
Net Income	37.36M	34.80M	77.70M	72.49M	60.94M	40.67M
Balance Sheet
Total Assets	864.09M	917.84M	897.51M	810.07M	667.43M	543.57M
Cash, Cash Equivalents and Short-Term Investments	184.07M	223.92M	289.69M	242.85M	203.39M	150.64M
Total Debt	158.69M	189.49M	118.20M	143.80M	111.70M	103.01M
Total Liabilities	289.52M	361.55M	282.59M	294.54M	239.78M	195.46M
Stockholders Equity	428.88M	402.37M	440.02M	384.42M	332.16M	283.68M
Cash Flow
Free Cash Flow	-8.16M	-17.57M	128.29M	84.78M	111.24M	73.03M
Operating Cash Flow	58.73M	49.33M	191.26M	158.57M	154.87M	109.89M
Investing Cash Flow	-96.23M	-119.59M	-57.73M	-108.72M	-41.31M	-51.35M
Financing Cash Flow	-12.10M	3.83M	-87.30M	-36.29M	-32.46M	-15.09M

China Leon Inspection Holding Limited Technical Analysis

Technical Analysis SentimentNegative

Last Price1.36

Price Trends

50DMA1.42Negative

100DMA1.59Negative

200DMA1.66Negative

Market Momentum

MACD0.01Negative

RSI43.05Neutral

STOCH64.59Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:1586, the sentiment is Negative. The current price of 1.36 is below the 20-day moving average (MA) of 1.39, below the 50-day MA of 1.42, and below the 200-day MA of 1.66, indicating a bearish trend. The MACD of 0.01 indicates Negative momentum. The RSI at 43.05 is Neutral, neither overbought nor oversold. The STOCH value of 64.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:1586.

China Leon Inspection Holding Limited Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

HK:1586 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HK:1540	79Outperform	HKD 276.76M	9.13	10.05%	3.16%	4.00%	-31.04%
HK:1975	64Neutral	HKD 259.20M	17.70	4.04%	8.85%	25.04%	―
Sector *	63Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
HK:1586	49Neutral	HKD 797.82M	18.14	8.99%	―	13.24%	-42.14%
HK:1884	44Neutral	HKD 60.50M	-22.45	-1.20%	―	-6.24%	56.25%
HK:8448	44Neutral	HKD 110.28M	67.38	15.23%	―	10.01%	164.52%
HK:0450	43Neutral	HKD 549.53M	-6.06	-3.47%	11.48%	4.37%	-4.14%

* Industrials Sector Average

Performance Comparison

HK:1586 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
HK:1586	China Leon Inspection Holding Limited	1.36	-1.52	-52.78%
HK:0450	Hung Hing Printing Group Limited	0.61	-0.24	-28.24%
HK:1540	Left Field Printing Group Ltd.	0.56	0.32	134.18%
HK:1884	eprint Group Ltd.	0.11	-0.00	-1.79%
HK:1975	Sun Hing Printing Holdings Limited	0.54	0.19	55.17%
HK:8448	Universe Printshop Holdings Ltd.	1.10	0.63	130.21%

China Leon Inspection Holding Limited Corporate Events

China Leon Inspection Delivers Double-Digit Interim Revenue and Profit Growth

Aug 21, 2026

China Leon Inspection Holding Limited, a Hong Kong-listed inspection and testing services provider, reported solid growth in its latest interim period. The group offers industrial and commercial quality control and certification services, generating...

China Leon Inspection Schedules Board Meeting to Approve Interim Results and Consider Dividend

Aug 11, 2026

China Leon Inspection Holding Limited has scheduled a board meeting for 21 August 2026 to review and approve the interim results for the six months ended 30 June 2026. The board will also consider the potential declaration of an interim dividend, a d...

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 28, 2026

China Leon Inspection Holding Limited AI Stock Analysis