Free cash flow has deteriorated to a -2.3% margin, with an OCF/NI ratio of 0.21 in 2025Q4 highlighting a persistent disconnect between accounting results and actual cash generation.
| Cash from Operations | 569.21K | -394.33K | 1.73M |
| Operating CF Margin % | 2.8% | -2.36% | 13.76% |
| Operating CF Growth % | 244.35% | -122.83% | - |
| Net Income | -27.06K | 1.33M | 998.2K |
| Depreciation & Amortization | 1.07M | 925.58K | 714.59K |
| Stock-Based Compensation | 0 | 0 | 0 |
| Deferred Taxes | 0 | 0 | 0 |
| Other Non-Cash Items | 43.15K | -708 | 0 |
| Working Capital Changes | -520.25K | -2.65M | 14.3K |
| Change in Receivables | -1.02M | -2.09M | -929.51K |
| Change in Inventory | 378.2K | -741.95K | -191.16K |
| Change in Payables | 396.88K | -105.22K | 955.27K |
| Cash from Investing | -2.45M | -40.8K | -132.09K |
| Capital Expenditures | -69.92K | -52.74K | -114.64K |
| CapEx % of Revenue | 0.34% | 0.32% | 0.91% |
| Acquisitions | 0 | 0 | 0 |
| Investments | - | - | - |
| Other Investing | -85.07K | 11.94K | -17.45K |
| Cash from Financing | 2M | 537.32K | -1.16M |
| Debt Issued (Net) | -927.31K | 373.03K | -1.16M |
| Equity Issued (Net) | 1000K | 509.5K | 0 |
| Dividends Paid | 0 | 0 | 0 |
| Share Repurchases | 0 | 0 | 0 |
| Other Financing | -1.38M | -345.22K | 0 |
| Net Change in Cash | 121.86K | 102.64K | 439.63K |
| Free Cash Flow | 414.23K | -482.35K | 1.61M |
| FCF Margin % | 2.04% | -2.89% | 12.82% |
| FCF Growth % | 185.88% | -129.97% | - |
| FCF per Share | 0.04 | -0.07 | 0.15 |
| FCF Conversion (FCF/Net Income) | -21.04x | -0.30x | 1.73x |
| Interest Paid | 97.67K | 82.77K | 7.31K |
| Taxes Paid | 294.83K | 0 | 0 |
Liquidity and Working Capital
As reported in recent financial filings, HKPD's OCF/NI ratio of 0.21 in 2025Q4 highlights a significant disconnect between accounting losses and cash generation, suggesting that the company's reported net income is failing to capture the underlying cash burn inherent in its current pharmaceutical distribution business model.
The divergence between net income and operating cash flow suggests that non-cash items, such as depreciation, are masking the true extent of the operational cash drain. Investors should monitor whether this trend persists, as the inability to convert earnings into cash flow often precedes liquidity constraints in high-volume, low-margin industrial sectors.
Based on HKPD's reported figures, the company's FCF margin deteriorated to -2.3% in 2025Q4, reflecting a consistent inability to generate positive free cash flow as the firm struggles to scale its operations profitably within the competitive Hong Kong-Mainland China pharmaceutical logistics corridor.
The persistent negative FCF trajectory indicates that the company is currently consuming capital to sustain its operations rather than generating it. This trend warrants further investigation into whether the company can achieve a self-sustaining cash flow profile without recurring external financing or significant operational restructuring.
According to recent SEC filings, HKPD's working capital dynamics show extreme volatility, with a $1.6M outflow in 2024Q4 followed by a $163.1K inflow in 2025Q4, indicating that the company's cash position is highly sensitive to the timing of inventory procurement and accounts receivable collections.
The erratic nature of these working capital changes suggests that the company lacks a stable cash conversion cycle, which is critical for a business operating on razor-thin margins. Such instability may indicate that the company is forced to manage its liquidity through aggressive payables management or inventory liquidation.
Financial statements reveal that HKPD's cash flow is heavily supported by $631.4K in depreciation and amortization charges in 2025Q4, which obscures the actual cash-based operational losses and suggests that the company's physical asset base is a significant, yet non-cash, drag on its overall financial performance.
The reliance on non-cash adjustments to bridge the gap between net income and operating cash flow may be masking the true cost of maintaining its specialized warehousing infrastructure. Analysts should be wary of this reliance, as it does not represent a sustainable source of liquidity for future growth initiatives.
Quick answers to the most common questions about buying HKPD stock.
Hong Kong Pharma Digital Technology Holdings Limited (HKPD) generated $0.6M in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Hong Kong Pharma Digital Technology Holdings Limited (HKPD) generated $0.4M in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Hong Kong Pharma Digital Technology Holdings Limited (HKPD) spent $0.1M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.