HNNA: Hold + Reduce
Published 18 Sep 2026, 20:43 BST. This is the frozen version, not the current recommendation.
Why this assessment was issued
First recorded assessment.
The central target is 10.1% below the price. The stronger case offers 17.3% upside, exceeding the central downside; the negative view is qualified.
Supporting evidence
Borrowing is lower relative to earnings
Net debt / EBITDA: -3.0× for HNNA, against 0.1× across 6 comparable peers.
Quarterly sales are growing
Revenue changed +4.2% from the same quarter last year, through 2026-06-30. The previous quarter’s year-on-year change was -12.3%.
Opposing evidence
Year-to-date profit is lower
Across 3 completed quarters since 2025-09-30, net income was 5.8m versus 7.5m in the matching prior-year periods (USD). Check whether the latest quarter changes that direction.
The profit margin narrowed
The latest quarterly operating margin was 34.7%, -0.7 percentage points from a year earlier. Compare the sales and margin contributions below.
The original scenarios
| Scenario | Sales growth | Profit margin | Model value |
|---|---|---|---|
| Weaker | -13.5% | 21.9% | $6.93 |
| Central | -7.7% | 24.4% | $9.26 |
| Stronger | -2.0% | 26.8% | $12.08 |
Method: Earnings and historical valuation. A sufficiently complete, positive earnings record allows the stock's own P/E history to be used. These scenarios are not probability intervals.
Original assumptions and checks
| eps | 1.0387 |
|---|---|
| cash | 35351000.0 |
| debt | 425000.0 |
| years | 1.218343600273785 |
| growth | -7.744565017153022 |
| margin | 24.775815013646042 |
| profit | 8261000.0 |
| cash_ok | True |
| debt_ok | True |
| growths | [-3.1670084301663293, -14.297486608982279, -12.322121604139713, 4.171840079463629] |
| revenue | 33343000.0 |
| downside | 32.73463973827017 |
| leverage | -3.048442000523697 |
| multiple | 10.008006405124098 |
| free_cash | 10178000.0 |
| buy_hurdle | 15 |
| volatility | 19.066333683277577 |
| history_end | 2026-09-11 |
| reward_risk | 0.0 |
| annual_years | 5 |
| usable_weeks | 157 |
| history_start | 2023-09-15 |
| history_weeks | 157 |
| financial_date | 2026-06-30 |
| interest_cover | 4.476496584973885 |
| operating_cash | 10509000.0 |
| uncapped_growth | -7.744565017153022 |
| current_multiple | 9.916241455665737 |
| projected_margin | 24.35748181701664 |
| historical_margin | 23.939148620387236 |
Recent price · Passed. Weekly close dated 2026-09-11.
Suitable business model · Passed. Value operating cash flow or comparable earnings; deduct debt and other ownership claims where appropriate.
Four quarters · Passed. Four quarters ending 2026-06-30.
Current financials · Passed. Statements through 2026-06-30; factor prices dated 2026-09-11.
Annual record · Passed. 5 consecutive annual profit margins, including loss years.
Comparable earnings history · Passed. P/E is usable in 157 of 157 weeks. At least 52 usable weeks and 70% coverage are required; excluding too many loss or missing weeks would bias the target.
Earnings and price dates · Passed. Earnings-release EPS $1.04, for four quarters ending 2026-06-30.
Price risk · Passed. Risk uses the latest 52 weekly price changes.
Comparable sales growth · Passed. Growth uses the median of four quarterly year-on-year comparisons.
Positive statement earnings · Passed. Trailing statement profit is positive.
Earnings reconciliation · Passed. Release EPS is $1.04; statement-derived EPS is $1.05. The difference is within the 5% review threshold; this does not prove there are no unusual items.
Statement totals · Passed. The latest four quarters agree with the trailing snapshot within 5%.
Cash and borrowing · Passed. Cash generation, debt and interest-cover figures are available.
Target publication review · Passed. The model estimate is within SM's automatic publication range of one quarter to four times the current price. This is a review threshold, not evidence that the market price is correct.
Policy sm-review-2-research · Model sm-assessment-14-operating-capital · Data 0dd5c7679209.