Min Xin Holdings Limited, an investment holding company, primarily engages in the financial services, general insurance, property investment, and strategic investment business in Hong Kong, Mainland China, and Macau. It is also involved in the banking business, as well as provides micro credit and entrusted loans; and leasing of office space. The company was incorporated in 1980 and is based in Central, Hong Kong. Min Xin Holdings Limited is a subsidiary of Fujian Investment & Development Group Co.,Ltd.

Hong Kong

Min Xin Holdings Limited

Financial Services

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

0222.HK reported revenue of HKD 268mn in the last 12 months, up 10% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 167% from FY23 to HKD 0.16.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 12ppts and its growth accelerated by 15ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported good EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 3.6% in the last 12 months, a decline from 60.0% in FY23. 

Historically, 0222.HK has reported very strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 32.7%, down from 37.1% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to 1.1%, below the peers. 

Min Xin Holdings Limited reported a return on equity (RoE) of 1.1% in the last 12 months, up from 1.1% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 1.0% in the last 12 months, an increase from 1.0% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 0.3 in the past several years. This ratio implies a weak shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

0222.HK has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity may be unstable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a very small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to weak positions in its industry, slow historical revenue growth, negligible return on capital, excessive margin volatility, poor working capital management, and inadequate interest coverage. We note robust profitability, solid cash flow generation, and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, 0222.HK is volatile. In other words, the stock will fall much more than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be large. 

In normal market circumstances, 0222.HK is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from limited to average. 

From both historical and forecast perspectives, the stock is overpriced compared to similar stocks. In particular, the stock is reasonably priced on P/E, 'expensive' on EV/EBITDA, overvalued on P/FCF. 

Min Xin Holdings Limited

HK$ 2.14

2

Min Xin Holdings Limited

HK$ 2.14

2

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

HK$ 2.14

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