HIGHWAY HOLDINGS REPORTS FISCAL YEAR 2025 THIRD QUARTER AND NINE MONTH RESULTS
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 21 2025
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Should l Buy HIHO?
Source: PRnewswire
Financial Performance Overview: Highway Holdings Limited reported a 21% year-over-year increase in revenue for the first nine months of fiscal year 2025, totaling $5.9 million, while net income rose to $421,000 compared to $223,000 in the previous year. However, the third quarter saw a 13.5% decrease in revenue and a decline in net income.
Future Outlook and Strategy: The company faces challenges due to macroeconomic uncertainties but remains optimistic about leveraging its strengths and exploring new ventures, including potential strategic transactions and diversifying its business operations outside of Asia to enhance growth and reduce reliance on customer health.
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Analyst Views on HIHO
About HIHO
Highway Holdings Ltd is a holding company mainly engaged in the offering of end-to end manufacturing solutions. The Company is mainly engaged in the design and manufacturing of stamping tools, injection molding parts, brushless DC motor. The Company is also mainly engaged in the production of automation equipment, cleaning equipment. In addition, the Company is engaged in the manual assembly.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Accelerated GDP Growth: The U.S. GDP grew at an annualized rate of 4.3% in the third quarter, up from 3.8% in the previous quarter and exceeding market estimates of 3.3%, indicating potential for economic recovery that may positively influence the stock market.
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- Decline in Durable Goods Orders: Durable goods orders fell by 2.2% month-over-month to $307.4 billion in October, reflecting a cautious stance among businesses amid uncertainties, which could impact future production plans and economic outlook.
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See More
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- Enhanced Technical Capabilities: The acquisition will enable Highway Holdings to offer thick sheet metal cutting, bending, and welding capabilities, addressing a critical gap in its service offerings and allowing direct engagement with local customers in China, thereby increasing market penetration.
- Strong Financial Foundation: With no debt and approximately $5.3 million in cash and cash equivalents, equating to about $1.20 per share, the company is well-positioned to support the acquisition and future M&A strategies, reinforcing its growth trajectory.
See More
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- Significant Market Potential: The Chinese automotive market is valued at approximately $660 billion, with a projected growth rate exceeding 2% over the next five years, and Regent-Feinbau's expertise will enable Highway Holdings to penetrate this rapidly expanding market.
- Enhanced Technical Capabilities: The acquisition will allow Highway Holdings to offer new capabilities in thick sheet metal cutting, bending, and welding, filling a critical gap in its metal components portfolio and attracting more customers to increase market share.
- Strong Financial Foundation: Highway Holdings boasts approximately $5.3 million in cash and cash equivalents with virtually no debt, providing a robust financial base to support this acquisition and future M&A strategies.
See More
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Conditions for Completion: The acquisition is expected to close by the end of March 2026, pending due diligence, negotiation of a definitive purchase agreement, and fulfillment of customary closing conditions.
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See More
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- Gross Margin Decline: Gross profit for Q2 was $301,000, with a gross margin of 25.5%, significantly down from 39.4% year-over-year, reflecting the direct impact of reduced sales on profitability.
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See More
