HWH International Inc. (NASDAQ: HWH)

Sector: Consumer Cyclical Industry: Leisure CIK: 0001897245
Market Cap 5.61 Mn
P/B 1.98
P/E -5.15
P/S 5.11
ROIC (Qtr) -34.53
Div Yield % 0.00
Rev 1y % (Qtr) -40.16
Total Debt (Qtr) 1.11 Mn
Debt/Equity (Qtr) 0.39
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About

HWH International Inc., known by its ticker symbol HWH, is a company that operates in the membership-based social experience and product sales industry. The company was established in Delaware in October 2021 and went public in February 2022, raising $86.25 million. HWH International Inc. has since completed a business combination with a target company in January 2024. The company's main business activities revolve around providing a social and business-centric atmosphere at its Hapi Café locations and through its online marketplace. HWH International...

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Investment thesis

Bull case

  • Healthy cash reserves of 2.90M provide 2.67x coverage of short-term debt 1.08M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of (984252) provides exceptional 26.80x coverage of minority interest expenses (36721), showing strong core operations.
  • Strong tangible asset base of 5.18M provides 4.68x coverage of total debt 1.11M, indicating robust asset backing and low credit risk.
  • Long-term investments of 1.07M provide solid 44.55x coverage of long-term debt 24084, indicating strategic financial planning.
  • Robust tangible asset base of 5.18M provides 3.23x coverage of working capital 1.61M, indicating strong operational backing.

Bear case

  • Operating cash flow of (984252) barely covers its investment activities of (1.01M), with a coverage ratio of 0.97, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 2.90M provide limited coverage of acquisition spending of (507971), which is -5.70x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 559106 relative to inventory of 1113 (502.34 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Operating cash flow of (984252) provides minimal -20.73x coverage of tax expenses of 47472, suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Operating earnings of (914173) show weak coverage of depreciation charges of 355888, with a -2.57 ratio indicating high capital intensity and potential reinvestment needs.

Peer comparison

Companies in the Leisure
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 AS Amer Sports, Inc. 22.38 Bn 71.89 3.67 1.87 Bn
2 HAS Hasbro, Inc. 13.30 Bn 46.47 3.26 3.32 Bn
3 PLNT Planet Fitness, Inc. 7.78 Bn 37.79 6.04 2.58 Bn
4 GOLF Acushnet Holdings Corp. 7.40 Bn 80.24 4.75 0.90 Bn
5 LTH Life Time Group Holdings, Inc. 6.29 Bn 21.85 2.16 4.13 Bn
6 MAT Mattel Inc /De/ 5.43 Bn 12.57 1.04 2.59 Bn
7 YETI YETI Holdings, Inc. 3.97 Bn 24.75 2.17 0.22 Bn
8 MSGE Madison Square Garden Entertainment Corp. 2.95 Bn 56.80 2.91 1.20 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.30 1.19
EV to Cash from Ops. EV/CFO -6.85 -6.09
EV to Debt EV to Debt 6.08 14.49
EV to EBIT EV/EBIT -7.37 -159.90
EV to EBITDA EV/EBITDA -6.20 -4.06
EV to Free Cash Flow [EV/FCF] EV/FCF -6.71 0.74
EV to Market Cap EV to Market Cap 1.20 -0.64
EV to Revenue EV/Rev 6.13 4.65
Price to Book Value [P/B] P/B 1.98 4.75
Price to Earnings [P/E] P/E -5.15 12.00
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -0.51
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 3.11
Dividend per Basic Share Div per Share (Qtr) 0.00 0.22
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 6.13
Interest Coverage Int. cover (Qtr) -7.11 -30.68
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 37.13 -13.50
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 248.16 1,190.33
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 13.88
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 70.56 -111.75
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 63.65 -165.31
EBIT Growth (1y) % EBIT 1y % (Qtr) 71.50 -1,562.20
EBT Growth (1y) % EBT 1y % (Qtr) 68.04 -1,555.34
EPS Growth (1y) % EPS 1y % (Qtr) 0.00 -377.44
FCF Growth (1y) % FCF 1y % (Qtr) 44.45 10.93
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -10.87 17.65
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.21 0.73
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.07
Cash Ratio Cash Ratio (Qtr) 1.29 3.31
Current Ratio Curr Ratio (Qtr) 1.71 4.80
Debt to Equity Ratio Debt/Equity (Qtr) 0.39 2.35
Interest Cover Ratio Int Coverage (Qtr) -7.11 -30.68
Times Interest Earned Times Interest Earned (Qtr) -7.11 -30.68
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -50.80 -57.55
EBIT Margin % EBIT Margin % (Qtr) -83.15 -65.38
EBT Margin % EBT Margin % (Qtr) -94.84 -69.55
Gross Margin % Gross Margin % (Qtr) 48.60 46.51
Net Profit Margin % Net Margin % (Qtr) -99.20 -74.45