One-glance verdict
Undervalued
$97.18 our estimate vs market $2.49
97% below our estimate, below the bear case
Fundamentals snapshot
Hitek Global Inc.
HKIT · NCM · Technology · Information Technology Services
Current price
$2.49
52-week range
$2.33 - $15,675.00
Market cap
$22.41M
Balance sheet
Healthy
-5.80x Concerning
Net cash $19.01M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 125.0% last year.
- Reward Returns 0.5% on equity, ahead of 50% of its peers.
- Risk Operating margin compressed from 25.5% to -7.7% over 3 years.
- Risk Insider ownership is only 0.6% (peer median: 32.9%).
What this company does
Hitek Global Inc.
Hitek Global is a technology company in China that helps other businesses manage their IT needs. It primarily makes money by selling government-required tax systems and related hardware, which creates a steady and predictable source of income. The company also earns money by providing IT consulting services and selling computer equipment like laptops and servers.
How the company got here
Founded in 1996 in Xiamen, China, Hitek Global started as an information technology (IT) consulting firm, helping other businesses with their tech needs. For many years, it focused on the Chinese market, eventually becoming a key provider of government-mandated tax systems. In 2023, the company had its Initial Public Offering (IPO), which is when a private company first sells shares of stock to the public, to raise money and began trading on the Nasdaq stock exchange. More recently, the company has been making changes, including acquiring other companies and announcing a name change to Biddance AI, signaling a new direction.
What it actually does
Hitek Global provides a mix of technology products and services to businesses in China. Think of them as an outsourced tech department for other companies. They sell essential hardware like laptops and printers, provide specialized software for specific industries, and offer services to help businesses comply with Chinese tax laws. Their customers range from small local shops to large industrial companies, each buying different types of tech solutions.
Services to Small and Medium Businesses
A major part of Hitek's business involves helping smaller companies in China handle their taxes correctly. The company sells and services special government-required hardware and software called the Anti-Counterfeiting Tax Control System (ACTCS). This system is necessary for businesses to report the value-added tax (VAT), which is a type of sales tax, that they collect. This segment makes money by selling the physical devices, like tax disks and printers, and providing ongoing IT support for them.
Services to Large Businesses
For larger corporate clients, Hitek focuses on selling computer hardware and more complex software. This includes everyday equipment like laptops, desktop computers, and servers, as well as specialized software they developed called a communication interface system. This specific software is used by industrial companies, such as those in the petrochemical industry, to gather data from their equipment for analysis. In recent periods, sales of hardware have made up the largest portion of the company's revenue (the total money it brings in from sales).
What management is betting on now
The company's leadership is focused on diversifying its business beyond the traditional tax systems, which are subject to changing government policies. They are doing this by acquiring companies in new fields, such as digital marketing, to add new sources of income. Management is also emphasizing growth in software and IT services for larger customers and has signaled a strategic shift toward artificial intelligence with a planned rebranding to Biddance AI. Their goal is to become a one-stop shop for a wider range of business consulting and technology services.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
Revenue
$6.54M
Net income
$180.14K
Diluted EPS
0.02
Operating cash flow
$-1.54M
Free cash flow
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Sources
Revenue
$2.90M
Net income
$-896.69K
Diluted EPS
-0.04
Operating cash flow
$-688.54K
Free cash flow
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Sources
Is it cheap or expensive?
Fair value $97.18 vs current price $2.49
Our most-likely fair value is $97.18 a share — about 3,800.0% above today's price of $2.49, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $19.0M - more cash than debt. Interest coverage -5.8x.
Net debt
$-19.01M
Interest coverage
-5.80x
Hitek Global Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
HKIT
BASELINE
Hitek Global Inc.
Total debt $2.65M Interest coverage -5.80x This is the baseline the peer rows are being compared against.
Total debt $29.22M Interest coverage 9.40x This peer still has a real interest-payment cushion, while HKIT does not.
Total debt $4.49M Interest coverage -0.95x Neither company has much profit cushion over interest right now.
Total debt $83.03M Interest coverage 15.53x This peer still has a real interest-payment cushion, while HKIT does not.
What you should know
The case for and against HKIT
3 Rewards
2 Risks
Rewards
-
Revenue grew 125.0% last year.
-
Returns 0.5% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 1/10 years.
Risks
-
Operating margin compressed from 25.5% to -7.7% over 3 years.
-
Insider ownership is only 0.6% (peer median: 32.9%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
0.03x
Forward P/E
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P/B
0.57x
P/S
3.43x
EV/EBITDA
-0.80x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
10.6%
Operating margin
-7.7%
Net margin
2.8%
ROE
0.5%
ROA
-2.7%
Health
Liquidity and balance-sheet strength
Debt / equity
0.07x
Current ratio
8.23x
Quick ratio
6.94x
Total debt
$2.65M
Total cash
$21.66M
Growth
How the business has been compounding
Revenue TTM
$20.43M
Revenue 5Y CAGR
0.3%
EPS TTM
75.00
EPS 5Y CAGR
-46.3%
Cash flow
How much cash the business throws off
Operating CF TTM
$1.54M
Free CF TTM
$-1.54M
FCF margin
-7.5%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
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