Hong Leong Asia (H22) AI Stock Analysis

• Market Cap: S$1.89B
• Dividend Yield: 2.26%
• Average Volume (3M): 1.54M
• Price to Earnings (P/E): 20.0
• Beta (1Y): 1.03
• Revenue Growth: 13.38%
• EPS Growth: 12.70%
• Country: SG
• Employees: 10,306
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Auto - Manufacturers
• EPS (TTM): 0.07
• Shares Outstanding: 748,141,300
• 10 Day Avg. Volume: 1,517,790
• 30 Day Avg. Volume: 1,543,006
• PEG Ratio: -0.38
• Price to Book (P/B): 0.67
• Price to Sales (P/S): 0.17
• P/FCF Ratio: 3.98
• 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: S$2.81
• Price Target Upside: 27.15% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 63 Neutral
• Price Target: S$2.50 ▲(13.12% Upside)

The overall stock score is driven by solid financial performance, particularly in revenue and cash flow growth, despite some operational inefficiencies. Technical analysis indicates bearish trends, but the stock is nearing oversold levels. Valuation is reasonable, with a fair P/E ratio and moderate dividend yield.

Positive Factors

Revenue Growth

The consistent revenue growth indicates a recovery and expansion in market demand, supporting long-term business sustainability and market position.

Cash Flow Generation

Strong cash flow generation enhances financial flexibility, enabling the company to invest in growth opportunities and manage debt effectively over time.

Stable Profitability Margins

Stable profitability margins indicate effective cost management and pricing strategies, which are crucial for maintaining competitive advantage and financial health.

Negative Factors

Operational Inefficiencies

Decreased margins point to operational challenges that could hinder profitability and require strategic improvements to sustain long-term growth.

Free Cash Flow Volatility

Volatility in free cash flow can affect the company's ability to consistently fund operations and growth initiatives, posing a risk to financial stability.

Leverage Concerns

While leverage is manageable, it limits financial flexibility and could impact the company's ability to respond to market changes or invest in new opportunities.

Hong Leong Asia Business Overview & Revenue Model

Company Description

Hong Leong Asia (H22) is an investment holding company headquartered in Singapore. It operates through various segments including diesel engines, building materials, and distribution and manufacturing of consumer products. The company is known for its diverse portfolio that spans across different industries, providing products and services that cater to both industrial and consumer markets.

How the Company Makes Money

Hong Leong Asia generates revenue primarily through the sale of diesel engines and related components, which are used in a variety of industrial applications. The building materials segment contributes to its earnings by supplying construction products such as ready-mixed concrete and precast concrete products, which are in demand for infrastructure and real estate development projects. Additionally, the company earns income from its consumer products division, which distributes and manufactures a range of household appliances and goods. Strategic partnerships and collaborations with businesses across Asia further enhance its market reach and profitability.

Hong Leong Asia Financial Statement Overview

Summary

Hong Leong Asia shows stability with a strong equity base and manageable debt. Income statement metrics reveal stable margins but highlight challenges in net profitability and revenue growth. Cash flow analysis indicates effective operational cash generation, but variability in free cash flow growth suggests room for improvement.

Income Statement

The gross profit margin is fairly consistent, indicating stable cost management. The net profit margin is lower, suggesting challenges in converting revenue into profit. Revenue growth is negative in recent years, with a decline from 2021 to 2024. EBIT and EBITDA margins are moderate, reflecting some profitability but with room for improvement.

Balance Sheet

The company maintains a healthy equity ratio, demonstrating a strong capital structure with substantial equity backing. The debt-to-equity ratio is moderate, indicating manageable leverage levels. Return on equity is reasonable but shows potential for enhancement to increase shareholder value.

Cash Flow

Free cash flow growth has been volatile, with a significant decline in recent years. The operating cash flow to net income ratio is strong, suggesting effective cash generation from operations. However, free cash flow to net income ratio indicates variability in capital expenditure management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.83B	4.08B	4.25B	3.88B	4.93B	4.50B
Gross Profit	745.33M	684.48M	730.80M	681.59M	729.44M	719.45M
EBITDA	227.68M	365.09M	379.95M	304.51M	324.44M	366.32M
Net Income	94.24M	64.88M	87.78M	54.54M	60.12M	46.74M
Balance Sheet
Total Assets	6.49B	5.81B	5.50B	5.32B	5.99B	5.86B
Cash, Cash Equivalents and Short-Term Investments	1.54B	1.35B	1.23B	1.01B	1.22B	1.35B
Total Debt	835.17M	920.75M	930.50M	915.20M	943.29M	838.39M
Total Liabilities	4.06B	3.36B	3.13B	2.96B	3.46B	3.44B
Stockholders Equity	1.01B	1.01B	922.01M	902.55M	956.90M	879.97M
Cash Flow
Free Cash Flow	542.71M	170.97M	262.85M	-112.33M	-70.01M	63.66M
Operating Cash Flow	641.61M	289.64M	362.04M	37.65M	130.67M	306.07M
Investing Cash Flow	-51.03M	-29.36M	-72.41M	-69.36M	-238.57M	-168.71M
Financing Cash Flow	-300.28M	-155.30M	-49.38M	-63.56M	-85.30M	-126.47M

Hong Leong Asia Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.21
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SG:H22, the sentiment is Negative. The current price of 2.21 is below the 20-day moving average (MA) of 2.54, below the 50-day MA of 2.42, and above the 200-day MA of 1.50, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 35.99 is Neutral, neither overbought nor oversold. The STOCH value of 22.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SG:H22.

Hong Leong Asia Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
QES	79 Outperform	S$674.49M	7.56	11.64%	0.70%	-3.11%	28.89%
N0Z	71 Outperform	S$39.44M	5.73	5.45%	4.10%	30.99%	-7.99%
H22	63 Neutral	S$1.89B	20.00	9.55%	2.26%	13.38%	12.70%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%

Hong Leong Asia Corporate Events

China Yuchai International Reports Detention of Key Executives

China Yuchai International Limited has announced that Wu Qiwei, a Director and President of its main subsidiary Yuchai, along with former Chief Accountant Qin Xiaohong, have been detained by Chinese authorities. Despite the detentions, Yuchai’s operations continue uninterrupted under the leadership of Chairman Li Hanyang, with Vice President Chen Hai stepping in as acting President. The reasons for the detentions remain unclear, but the company assures stakeholders that business activities are proceeding as usual.

The most recent analyst rating on (SG:H22) stock is a Buy with a S$3.00 price target. To see the full list of analyst forecasts on Hong Leong Asia stock, see the SG:H22 Stock Forecast page.

China Yuchai Expands Product Line with New High Horsepower Engines

China Yuchai International Limited announced the launch of the new mtu Series 2000 high horsepower engines by its joint venture, MTU Yuchai Power Co., Ltd. This development marks an expansion of their product line, with the new engines being suitable for both primary and backup power generation applications. The launch is expected to drive growth by enhancing the company’s market position and expanding its customer base, particularly in the high-end power generation market.

The most recent analyst rating on (SG:H22) stock is a Buy with a S$2.80 price target. To see the full list of analyst forecasts on Hong Leong Asia stock, see the SG:H22 Stock Forecast page.

China Yuchai Subsidiary Explores Potential Foreign Stock Exchange Listing

China Yuchai International Limited has announced that one of its indirect subsidiaries is considering a potential listing on a foreign stock exchange. This potential listing is in the preliminary stages and depends on due diligence, regulatory approvals, and market conditions. The announcement reflects the company’s strategic efforts to enhance its market positioning and expand its financial capabilities, although there is no certainty that the listing will occur.

The most recent analyst rating on (SG:H22) stock is a Buy with a S$2.80 price target. To see the full list of analyst forecasts on Hong Leong Asia stock, see the SG:H22 Stock Forecast page.

China Yuchai Reports Strong Financial Growth in 1H 2025

China Yuchai International Limited reported a significant financial performance in the first half of 2025, with a 34% increase in revenue to RMB 13.8 billion and a 58.9% rise in profit to RMB 534.8 million compared to the same period in 2024. The company achieved a 29.9% increase in engine sales, notably in truck and bus segments, despite a general decline in the commercial vehicle market, highlighting its strong market positioning and operational success.

The most recent analyst rating on (SG:H22) stock is a Buy with a S$1.60 price target. To see the full list of analyst forecasts on Hong Leong Asia stock, see the SG:H22 Stock Forecast page.

China Yuchai to Announce 2025 First-Half Financial Results

China Yuchai International Limited announced it will release its unaudited financial results for the first half of 2025 on August 8, 2025, before the market opens. An earnings call and audio webcast will be held on the same day, hosted by the company’s President and CFO, to discuss the results and engage with analysts and investors. This announcement is significant for stakeholders as it provides insights into the company’s financial performance and strategic direction.

The most recent analyst rating on (SG:H22) stock is a Buy with a S$1.60 price target. To see the full list of analyst forecasts on Hong Leong Asia stock, see the SG:H22 Stock Forecast page.