Equity Research Analysis: OneConstruction Group Ltd (ONEG)
|Blank Capital Research Unit|Spot: $1.69
Price$1.69
Composite Score45.6/100
RatingREDUCE (2★)
Rank#2697 OF 7,333
Market Cap$27M
P/E Ratio
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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#2697
Positioning
Market Dominance
Construction
Construction
$27M
Ka Chun Gordon Li
OneConstruction Group Limited and its subsidiaries (“We”), through the operating subsidiary, are a structural steelwork contractor in Hong Kong, specializing in the procurement and installation of structural steel for construction projects in Hong Kong. Since our establishment in 2021, the operating subsidiary has been undertaking structural steelwork projects in the role of subcontractor and has conducted all of our business activities in Hong Kong, where all of our clients and suppliers are located. Structural steelwork refers to the installation and formation of steel structures, typically serving as the backbone of commercial and residential buildings and infrastructure during the initial construction stage. Essentially, structural steelwork involves columns and beams that are riveted, bolted or welded together. As a structural steelwork contractor, the operating subsidiary will supply, cut, bend, weld and assemble structural steel frames, trusses and other components into structures in accordance with the specifications provided in the building plans and designs provided by the general contractors that engage it.
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = ONEG ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$FER Ferrovial SE | 76 | 89 | 94 | 72 | - | - | 162.2% | 12.2% | 87.8% | 88.9% | 38.1% | 0.5% | 2.1% | - | $30.3B | VS | |
$CX CEMEX SAB DE CV | 74 | 81 | 87 | 87 | - | - | 7.8% | 3.5% | 33.6% | 11.2% | 5.9% | -2.1% | 1.1% | 60.0x | $32.6B | VS | |
$MWA Mueller Water Products, Inc. | 69 | 85 | 87 | 57 | 17.9x | 11.0x | 21.4% | 11.0% | 36.1% | 18.2% | 13.4% | 8.8% | 1.1% | 46.0x | $4.0B | VS | |
$TOL Toll Brothers, Inc. | 69 | 83 | 92 | 63 | 7.9x | 5.6x | 16.9% | 9.7% | 25.1% | 15.7% | 12.3% | 1.1% | 0.7% | 34.0x | $13.0B | VS | |
$GFF GRIFFON CORP | 68 | 86 | 82 | 60 | - | - | 34.2% | 2.3% | 42.0% | 8.2% | 2.0% | -4.0% | 0.9% | 1909.0x | $3.5B | VS | |
$FIX COMFORT SYSTEMS USA INC | 68 | 80 | 43 | 97 | 25.0x | 18.1x | 52.7% | 19.4% | 24.8% | 15.5% | 11.9% | 35.2% | 0.2% | 6.0x | $29.1B | VS | |
$BBU Brookfield Business Partners L.P. | 66 | 63 | 94 | 68 | - | - | 5.0% | 1.1% | 14.1% | 7.2% | 2.2% | -26.2% | 1.1% | 1081.0x | $1.7B | VS | |
$PHOE Phoenix Asia Holdings Ltd | 64 | 95 | 97 | 40 | - | - | 42.6% | 22.6% | 29.5% | 17.6% | 13.9% | 28.1% | 0.0% | 0.0x | $6M | VS | |
$EME EMCOR Group, Inc. | 64 | 75 | 42 | 80 | 24.6x | 16.0x | 36.5% | 14.0% | 19.4% | 9.4% | 6.9% | 16.4% | 0.1% | 3.0x | $29.1B | VS | |
$DY DYCOM INDUSTRIES INC | 64 | 68 | 58 | 89 | 19.9x | 9.7x | 29.4% | 11.8% | 22.1% | 10.4% | 7.3% | 14.1% | 0.0% | 63.0x | $8.5B | VS | |
$ONEG OneConstruction Group Ltd | 46 | 70 | 66 | 23 | 0.2x | 6.3x | 29.6% | 7.2% | 7.4% | 3.2% | 1.7% | -16.2% | 0.0% | 17.0x | $27M | ||
| SECTOR BENCH | - | - | - | - | - | 19.1x | 10.7x | 14.2% | 5.9% | 23.7% | 7.3% | 5.4% | 1.9% | 0.0% | 0.4x | - | REF |
OneConstruction Group Ltd (ONEG) receives a "Reduce" rating with a composite score of 45.6/100. It ranks #2697 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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YOY expansion rate
Core pricing power
Operating efficiency
Bottom-line conversion
Equity capital efficiency
Asset base utilization
Financial leverage load
Direct cash return
Ka Chun Gordon Li
Chief Executive Officer
70
37
22
Audit Verdict: Lower quality and stability scores may indicate governance concerns.
No recent insider transactions available for ONEG
Headcount
—
HQ Base
WANCHAI,
Lagging peers — losers tend to keep underperforming
Trading at a discount to fundamentals — favorable entry valuation
High profitability & efficiency — strong quality floor supports entry
High volatility — wider range of outcomes increases timing risk
Moderate investment profile
Mid-range overall rating
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Relative valuation derived from Construction sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Reverse DCF Framework — Mauboussin Methodology
Institutional-grade Reverse DCF analysis. This model identifies the growth hurdles embedded in current market prices. When implied growth is significantly lower than historical or projected rates, a margin of safety may exist. Re-audited daily.
No analyst ratings for ONEG.
View All RatingsInsufficient data for Financial Analysis
| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 70 | 81 | -11DRAG |
| MOMENTUM | 23 | 14 | +9ALPHA |
| VALUATION | 66 | 83 | -17DRAG |
| INVESTMENT | 37 | 61 | -24DRAG |
| STABILITY | 22 | 10 | +12ALPHA |
| SHORT INT | 52 | 53 | -1NEUTRAL |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROIC 105.8% vs WACC 9.4% (spread +96.4%)
GM 7% vs sector 24%, OM 3% vs sector 7%
Capital turnover 38.89x
Rev growth -16%
Interest coverage N/A, Net debt/EBITDA 1.2x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
OneConstruction Group Ltd receives a Reduce rating from our analysis, with a composite score of 45.6/100 and 2 out of 5 stars, ranking #2697 out of 7,333 stocks. ONEG's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
ONEG earns a quality score of 70/100, indicating above-average business quality. The company reports a return on equity of 29.6% (sector avg: 14.2%), gross margins of 7.4% (sector avg: 23.7%), net margins of 1.7% (sector avg: 5.4%). Companies in this tier generally demonstrate consistent profitability and efficient capital deployment, though they may face some competitive pressure.
ONEG's value score of 66/100 indicates the stock is fairly valued based on its current fundamentals. Key valuation metrics include a P/E ratio of 0.22x, an EV/EBITDA of 6.25x, a P/B ratio of 2.27x. At this level, neither a clear bargain nor overpriced, the stock's attractiveness depends more on forward growth expectations and qualitative factors.
OneConstruction Group Ltd's investment score of 37/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of -16.2% vs. a sector average of 1.9% and a return on assets of 7.2% (sector: 5.9%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
OneConstruction Group Ltd is experiencing notably weak momentum with a score of just 23/100. The stock has underperformed its peers and is trending below major moving averages. Revenue growth stands at -16.2% year-over-year, while a beta of 0.87 reflects its sensitivity to broader market moves. While deep momentum weakness can occasionally present value opportunities, it often reflects deteriorating fundamentals or structural headwinds that may persist.
OneConstruction Group Ltd registers a low stability score of 22/100, indicating high volatility and potentially stressed financial conditions. Key stability metrics include a beta of 0.87 and a debt-to-equity ratio of 17.00x (sector avg: 0.4x). Stocks at this level carry elevated capital loss risk and may be unsuitable for conservative portfolios without careful risk management.
The short interest score of 52/100 for ONEG suggests somewhat elevated bearish positioning by institutional traders. Specific risk factors include elevated leverage (D/E: 17.00x), micro-cap liquidity risk. With a $27M market cap (micro-cap), OneConstruction Group Ltd may experience above-average volatility. Investors should consider whether the short thesis has merit or if it creates a potential short-squeeze opportunity.
OneConstruction Group Ltd is a micro-cap company in the Construction sector, ranked #0 of 50 in its sector (100th percentile) and #2697 of 7,333 overall (63rd percentile). Key comparisons include ROE of 29.6% exceeding the 14.2% sector median and operating margins of 3.2% below the 7.3% sector average. This top-quartile standing reflects exceptional competitive strength relative to Construction peers.
While ONEG currently exhibits a REDUCE profile, superior opportunities exist within the CONSTRUCTION sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
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Improvement in Stability (22) would have the largest impact on the composite score.
EV/EBITDA 42% BELOW SECTOR MEDIAN (FAVORABLE)
ROE 109% ABOVE SECTOR MEDIAN (FAVORABLE)
Gross Margin 69% BELOW SECTOR MEDIAN
AUDIT DATA AS OF MAR 31, 2025 (Q4 FY2024)
We rate OneConstruction Group Ltd (ONEG) as a Reduce with a composite score of 45.6/100 at a current price of $1.69. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.
The rating is primarily driven by strength in quality (70th percentile) and value (66th percentile), which together account for the majority of the composite score. Offsetting weakness in stability (22th percentile) and momentum (23th percentile) tempers our overall conviction. We assign a Narrow Moat rating (47/100), Medium uncertainty, and Standard capital allocation.
Key items to watch: momentum to confirm whether the current price trend has legs. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.
OneConstruction Group Ltd holds a top-quartile position (#0 of 50) within the Construction sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 45.6/100 places it at rank #2697 in our full 7,333-stock universe. At $27M in market capitalization, OneConstruction Group Ltd is a small-cap player in the Construction space, which limits certain scale advantages but may allow for more agile strategic execution.
Revenue contraction of -16% combined with momentum at the 23th percentile paints a cautious picture of the near-term business outlook. The market appears to be pricing in continued challenges, and a catalyst for reversal is not clearly visible from current data.
The margin cascade tells an important story: gross margins of 7% (-16.4pp vs sector) narrow to operating margins of 3% (-4.2pp vs sector) and net margins of 1.7%, yielding a gross-to-net conversion rate of 23%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.
At a current price of $1.69, OneConstruction Group Ltd is trading near fair value based on current fundamentals. Our value factor score of 66/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.
The stock currently trades at a P/E of 0.2x (a 99% discount to the sector median of 19.1x), EV/EBITDA of 6.3x (discounted to peers), P/B of 2.3x, P/S of 0.1x. The below-sector P/E suggests possible undervaluation or the market pricing in near-term headwinds.
Returns on equity of 29.6% exceed the cost of equity for most companies, indicating genuine shareholder value creation and a reinvestment engine that compounds wealth over time.
A value factor score of 66/100 suggests the market is underpricing these fundamentals, creating a potential margin of safety for new investors.
A conservative balance sheet (17% D/E) provides financial flexibility for acquisitions, buybacks, or weathering economic downturns without dilution.
The Reduce rating (composite 45.6/100) reflects multi-factor weakness, and historically, stocks in this scoring range have underperformed the market by a meaningful margin.
Revenue decline of -16% signals business deterioration — declining revenues make it difficult to grow into the current valuation and often precede further negative revisions.
We assign a Medium uncertainty rating to OneConstruction Group Ltd. The stock presents a balanced risk profile: below-average price stability (22th percentile). While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.
Specific risk factors that inform our assessment include: below-average price stability (22th percentile). Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 22th percentile and quality factor at the 70th percentile provide a quantitative summary of the overall risk landscape.
Key risk mitigants include: conservative leverage (17% D/E) limits balance sheet risk. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.
We rate OneConstruction Group Ltd's capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 29.6%, and the balance sheet is managed within acceptable parameters (D/E: 17%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; OneConstruction Group Ltd falls short on at least one dimension.
There is room for improvement in optimizing the capital structure or enhancing shareholder returns. Absent a dividend, the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.
In summary, OneConstruction Group Ltd receives a Reduce rating with a composite score of 45.6/100 (rank #2697 of 7,333). Our quantitative framework assigns a Narrow Moat (47/100, trend: stable), Medium uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 43/100.
Our analysis does not support a constructive view on OneConstruction Group Ltd at this time. The combination of the current quantitative profile, medium uncertainty, and standard capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.
Analysis derived from Blank Capital Research quantitative terminal. For informational purposes only. No trade solicitation. Past performance not indicative of future results. Consult a qualified advisor.
We assign OneConstruction Group Ltd a Narrow Moat rating with a composite moat score of 47/100. The ROIC-WACC spread of +96.4% is the primary signal of economic value creation. The company possesses identifiable competitive advantages, though they are less entrenched than those of wide-moat peers. Our analysis indicates that OneConstruction Group Ltd can sustain above-average returns on invested capital for at least 10 years, with the strongest contributor being economic value creation at 17.5/20.
The strongest moat sources are economic value creation (17.5/20) and reinvestment efficiency (10/20). ROIC 105.8% vs WACC 9.4% (spread +96.4%). Capital turnover 38.89x. These pillars form the core of OneConstruction Group Ltd's competitive identity and are the primary drivers of excess returns in our framework.
Areas of relative weakness include financial resilience (5.3/20) and margin superiority (6.7/20). Interest coverage N/A, Net debt/EBITDA 1.2x. Improvement in these areas could meaningfully widen the moat over time, while deterioration would be an early warning of competitive erosion.
Our moat trend assessment is Stable. Multi-year ROIC and operating margin trajectories show neither meaningful improvement nor deterioration, suggesting the competitive position is steady. We expect OneConstruction Group Ltd's moat profile to remain largely unchanged absent a material shift in return on capital or industry dynamics.
Key profit drivers include declining revenues (-16%) that pressure the earnings outlook, returns on equity of 29.6% driving shareholder value creation. The margin cascade from 7% gross to 3% operating to 1.7% net reveals the company's cost structure and reinvestment intensity. Our analysis indicates that the profit engine is high-quality and likely sustainable, with the quality factor at the 70th percentile.
The margin profile shows gross margins of 7%, operating margins of 3%, net margins of 1.7%. Return metrics include ROE of 29.6% and ROA of 7.2%. Relative to the Construction sector, gross margins are 16.4 percentage points below the sector median of 24%, and ROE of 29.6% compares to a sector median of 14.2%.
The balance sheet reflects a conservatively managed balance sheet with D/E of 17%, revenue growth of -16%. The sector median D/E is 0%, putting OneConstruction Group Ltd at higher leverage than the typical peer. Overall balance sheet health is adequate for the current business environment.
Thin net margins of 1.7% provide limited cushion against cost pressures, competitive pricing, or macroeconomic headwinds — even small changes in costs could swing the company to a loss.
Weak momentum (23th percentile) suggests institutional selling pressure and unfavorable technical dynamics that may persist.
Above 50MA
37.18%
Net New Highs
+51081
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