Investment Thesis
Hi-Great Group is in severe financial distress with negative stockholders' equity of -$205K, indicating technical insolvency. The company is experiencing a revenue collapse (-36.8% YoY), generating large operating losses (-129.5% operating margin), and faces a critical liquidity crisis with a current ratio of 0.26x and negative free cash flow. Without immediate operational turnaround or debt restructuring, the company appears headed toward bankruptcy.
Strengths
- Positive gross margin of 40.1% indicates basic business model viability
- Still generating minimal revenue ($34.5K) suggesting hotel operations continue
- Small asset base ($72.3K) could facilitate faster restructuring if management takes decisive action
Risks
- Negative stockholders' equity of -$205K indicates technical insolvency and balance sheet collapse
- Critical liquidity crisis: current ratio 0.26x and quick ratio 0.03x cannot support operations
- Severe operating losses (-$44.3K net loss) with negative free cash flow of -$3.1K burning cash reserves
- Revenue in free fall with -36.8% YoY decline showing accelerating business deterioration
- Cannot service debt: interest coverage ratio -19.6x with $150K long-term debt against tiny asset base
- Cyclical hotel sector subject to economic downturns and intense competition
Key Metrics to Watch
- Quarterly revenue trend and stabilization potential
- Operating cash flow inflection to positive
- Cash position and runway (currently $8K)
- Debt restructuring or refinancing announcements
- Loss mitigation trajectory and path to EBITDA break-even
Financial Metrics
Revenue
34.5K
Net Income
-44.3K
EPS (Diluted)
$0.00
Free Cash Flow
-3.1K
Total Assets
72.3K
Cash
8.0K
Profitability Ratios
Gross Margin
40.1%
Operating Margin
-129.5%
Net Margin
-128.2%
ROE
N/A
ROA
-61.2%
FCF Margin
-9.0%
Balance Sheet & Liquidity
Current Ratio
0.26x
Quick Ratio
0.03x
Debt/Equity
N/A
Debt/Assets
383.6%
Interest Coverage
-19.64x
Long-term Debt
150.0K
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-04-11T03:57:21.770184 |
Data as of: 2025-09-30 |
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