Vico International Holdings Limited

Income statement

Sources and notes.

• FY2023–FY2026 figures are from the annual results announcements.

• FY2022 revenue, gross profit and net profit are from the FY2022 and FY2023 announcements.

• FY2022 PBT, tax and expense lines are derived from S&P data: a 22.7% effective tax rate, S&P SG&A of HK$33.2 million split using the FY2023 proportions, and D&A of HK$11.1 million.

• The FY2022 expense split is approximate. Treat those FY2022 lines as indicative.

• The two EBITDA series differ for two reasons. The derived series includes other income and right-of-use depreciation. The S&P series excludes other income and uses PP&E plus investment-property depreciation only.

Margins and growth

Compound growth rates (derived).

• Revenue CAGR FY2021–FY2026 (5 years, from HK$816.4 million): +9.9%.

• Revenue CAGR FY2022–FY2026 (4 years): −1.2%.

• Net profit CAGR FY2022–FY2026: +15.0%.

• Net profit CAGR FY2021–FY2026, from HK$18.3 million: −2.6%.

Commentary.

Revenue follows oil prices and volume: It is a poor measure of performance. The FY2023 trough reflects volume collapsing to 135.0 million litres under cross-border restrictions. The implied average diesel price was high that year, at about HK$6.95 per litre. In FY2024, volume doubled to 269.7 million litres when the boundary reopened, while the price fell to about HK$5.60 per litre.

Gross profit moves in a tight band of HK$43.5–49.0 million: This is despite revenue swinging by nearly 60%. It confirms that earnings depend on spreads rather than prices.

FY2026 shows real margin gains on lower revenue: Gross margin rose to 3.75%, the highest since FY2023. Management attributes this to tighter cost control and better supplier terms (FY2026 MD&A).

The FY2024 profit doubling came from below the gross line: Administrative expenses fell HK$5.5 million, mainly because HK$2.3 million of impairment on receivables from cross-border truck drivers was reversed after HK$3.6 million had been booked in FY2023 (FY2024 MD&A).

The FY2025 fall came from operating leverage: Gross profit dipped HK$2.4 million while administrative costs rose HK$2.1 million and other income fell HK$1.1 million. The rental income line declined as investment property became owner-occupied.

Balance sheet

Sources and notes.

• FY2023–FY2026 are from the annual results announcements.

• FY2022 is from S&P via StockAnalysis.com. The FY2022 investment properties figure is S&P's "other long-term assets", and the FY2022 trade deposits figure is S&P's "other current assets". Both are proxies.

• S&P's net cash figures (−8.12, −3.66, 5.23, 43.80 and 67.36) differ slightly from the filing-derived figures above because S&P classifies short-term investments differently.

• Bank borrowings are all shown as current. The interim report says they are repayable within five years, which suggests repayment-on-demand clauses.

• Borrowings are secured on leasehold land and buildings of HK$109.7 million and investment property of HK$5.6 million at 31 March 2026.

Commentary.

The balance sheet has de-risked steadily: Total debt fell from HK$63.4 million to HK$33.1 million over four years, and liquidity rose to HK$99.6 million. Over half of that liquidity is now held as time deposits.

Equity has compounded with retained profit: No dividends have been paid since March 2022, and book value per share has risen from HK$0.194 to HK$0.248.

• "Trade deposits paid" is a meaningful hidden working-capital item. These are prepayments to suppliers, reaching HK$37.9 million in FY2026, compared with only HK$0.4 million of trade payables. The company effectively pre-funds its supply rather than enjoying supplier credit.

Cash flow

Source: S&P Global Market Intelligence via StockAnalysis.com (cash flow statement, last updated 23 July 2026), cross-checked with the FY2026 operating cash flow of HK$29.253 million and financing outflow of HK$10.817 million reported in the FY2026 annual report summary (Bulletin Express, 23 July 2026).

Commentary.

Cash conversion is lumpy and depends on working capital: In FY2025, operating cash flow was 3.7 times net profit as receivables fell by HK$27 million. In FY2023 it was 0.4 times, as receivables built up and impairments rose.

Free cash flow is strong relative to the market cap: Five-year cumulative free cash flow was HK$104.3 million, against a market cap of about HK$225 million.

• The cash has been used for de-leveraging and deposits, not shareholder returns. No dividend has been paid in four fiscal years despite net cash of HK$66.5 million.

Key ratios

Sources and notes.

• All ratios are derived from the filings data above.

• FY2022 ROE uses an FY2021 equity of HK$195.1 million (derived). FY2022 ROA and asset turnover use year-end assets.

• Company-defined gearing comes from the FY2024–FY2026 announcements; the FY2022 figure is derived.

• S&P reports TTM ratios of ROE 6.67%, ROA 3.96% (EBIT-based), ROIC 8.53%, interest coverage 19.16x, current ratio 3.90 and debt to equity 0.13.

• The reported cash conversion cycle excludes trade deposits paid. Counting those deposits as part of supplier days would add about 11 days in FY2026 (HK$37.9 million ÷ HK$1,258 million × 365).

Inflections to note.

1. Returns peaked in FY2024 on volume recovery. They have since rebuilt to 6.7% ROE in FY2026 on margin, despite lower revenue.

2. The current ratio has more than doubled since FY2022. This is driven by de-leveraging and the build-up of time deposits.

3. Receivables quality has improved. DSO has fallen to 7 days. However, receivables more than 90 days past due rose to HK$2.6 million at FY2026, from HK$0.3 million at FY2025. This is a monitorable.

Management guidance

The FY2026 MD&A, published 26 June 2026, gives a cautious qualitative outlook for 2027. Management expects pressure on both volumes and gross margins from:

• high energy prices;

• supply bottlenecks;

• a compressed local economy;

• illegal fuel channels;

• fleet electrification.

Its responses are strict cost control, a more diversified supplier base and adjustments to its wholesale structure. No numeric guidance has been issued.

Consensus

None. The stock has no analyst coverage. Simply Wall St displays a long-range model projection of HK$2.0 billion revenue and HK$23.9 million earnings by 2031.

Bull case

1. Margin repair is real and cash-backed. Gross margin rose to 3.75% and net profit to HK$16.0 million while revenue fell 15%. Operating cash flow of HK$29.3 million and free cash flow of HK$25.3 million confirm the earnings quality.

2. The balance sheet supports re-rating or payouts. Net cash of HK$66.5 million is about 30% of the market cap. A HK$0.01 dividend would cost HK$10 million and yield 4.4%. The stock trades at 0.91x book value and about 5–6x EV/EBITDA, with an FCF yield above 11%.

3. Mix shift toward higher-value lines. Lubricant volume rose 42.9%, fleet-card revenue per account rose about 43%, and the overseas customer base is broadening. These lines carry structurally better margins than diesel.

Bear case

1. Structural volume decline. Diesel volume fell 12% and fleet accounts 18% in FY2026. Management itself flags electrification and illegal fuel stations as severe and secular headwinds.

2. The valuation has already re-rated. At 14x trailing P/E, the stock is near the top of its 5-year range (97th percentile) after a roughly 150% one-year rally. The free float is only 27%, liquidity is thin, and there is no analyst coverage.

3. Governance and capital allocation. The board is non-compliant with Listing Rule independence requirements. No dividend has been paid in four years despite rising cash. Three family members sit on the board, and the controlling shareholder holds 73%. Minority shareholders have limited influence.

Catalysts and monitorables (next 12 months)

Concluding analyst verdict

Vico International is a well-run but structurally challenged micro-cap distributor. In FY2026 it did what a commodity middleman should do when revenue falls: it protected spread, cut costs and turned working capital into cash. Net profit rose 29.8% to HK$16.0 million on revenue down 15.4%. Gross margin widened to 3.75%. Net cash increased to about HK$66.5 million, while debt fell to HK$33 million. The balance sheet has no goodwill and is backed by a pledged property carried at HK$110 million. On conventional measures, the stock is not expensive on cash flow, with an FCF yield above 11% and EV/EBITDA of about 5–6x.

The underlying volume trend, however, is negative. Diesel litres fell 12%, the fleet card account base has shrunk by a third in three years, and management's own outlook is unusually blunt about electrification, illegal fuel stations and a cautious 2027. The growth businesses, lubricants and overseas sales, are real but tiny: lubricants are HK$48 million of revenue and overseas sales HK$4 million. They cannot offset the diesel trend in the medium term.

The market has re-rated the shares sharply over the past year. The P/E has moved from the mid-single digits to about 14x, near the 5-year high, without any analyst coverage or change in capital return policy. Governance adds a discount. The August 2026 INED resignation left the board out of compliance with the Listing Rules, and the controlling family has preferred to accumulate cash rather than distribute it.

On balance, the profile is a hold-quality, cash-rich, ex-growth distributor. Upside from here most plausibly comes from a return to dividends or buybacks rather than from earnings growth. Key risks are a reversal in the diesel spread, the loss of a top-three customer, and slippage on governance remediation. Investors should treat the November 2026 interim results and the INED appointment as the decisive near-term tests.