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KAZR, Skyline Builders Group Holding Limited
We operate in a single segment that represents the Company's core business as an Approved Public Works Contractor undertaking roads and drainage to its customers in Hong Kong.
In our operating history of over 12 years, we have focused on providing civil engineering services in the role of subcontractor and built up our expertise and track record in civil engineering works.
We had over three years business relationship with most of our major customers.
The business
What it sells, where the money comes from, the kind of company it is.
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- Situation
- Distress / turnaround. Thin interest coverage, or operating cash burned against real debt, across the record. The balance sheet carries this situation; the debt schedule sets the clock.
- What moves the needle
- Gross margin has run about 6.1% and operating margin about 2.6% through the cycle, a thin spread that turns the result on volume and the cost of what it sells far more than on the price it sets. On a spread this thin the operating result swings hard on small moves in cost or volume — it has ranged from −24% to 3.4% over the years, so the cost line is where the needle moves. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
- Is it a good business?
- Return on capital has sat near the cost of capital (median 8%). Owner earnings, the cash-based check, have been thin too. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.
Every line is arithmetic on the company's filings, shown in full in the sections below.
The record
Ten years of arithmetic, read across the cycle.
The record, 2023–2026
realized figures from each filing · older years to the left| 2023’23 | 2024’24 | 2025’25 | 2026’26 | TTMTTMMar 2026 | |
|---|---|---|---|---|---|
| Income statement | |||||
| $45M | $49M | $46M | $50M | $50M | RevenueRevenue |
| $1M | $3M | $3M | $3M | $3M | Gross profitGross prof. |
| 3% | 6% | 6% | 7% | 7% | Gross marginGross mgn |
| $856K | $2M | $2M | ($12M) | ($12M) | Operating incomeOp. inc. |
| 1.9% | 3.4% | 3.4% | −24.1% | −24.1% | Operating marginOp. mgn |
| $880K | $930K | $727K | $9M | $9M | Net incomeNet inc. |
| 12% | 14% | 20% | — | — | Effective tax rateTax rate |
| Cash flow & returns | |||||
| $2M | ($7M) | ($3M) | ($3M) | ($3M) | Operating cash flowOp. cash |
| $1M | $1M | $803K | $370K | $370K | DepreciationDeprec. |
| $156K | ($9M) | ($5M) | ($12M) | ($12M) | Working capital & otherWC & other |
| $196K | $60K | — | $206K | $206K | CapexCapex |
| 0.4% | 0.1% | — | 0.4% | 0.4% | Capex / revenueCapex/rev |
| $2M | ($7M) | — | ($3M) | ($3M) | Owner earningsOwner earn. |
| 4.3% | −13.5% | — | −6.1% | −6.1% | Owner earnings marginOE mgn |
| $2M | ($7M) | — | ($3M) | ($3M) | Free cash flowFCF |
| 4.3% | −13.5% | — | −6.1% | −6.1% | Free cash flow marginFCF mgn |
| 14% | 10% | 6% | -14% | -14% | ROICROIC |
| 33% | 31% | 8% | 11% | 11% | Return on equityROE |
| 33% | 31% | 8% | 11% | 11% | Retained to equityRetained/eq |
| Balance sheet | |||||
| — | $324K | $719K | $5M | $5M | Cash & investmentsCash+inv |
| — | $4M | $10M | $7M | $7M | ReceivablesReceiv. |
| — | $2M | $2M | $2M | $2M | Accounts payablePayables |
| — | $2M | $8M | $6M | $6M | Operating working capitalOper. WC |
| — | $16M | $22M | $67M | $67M | Current assetsCur. assets |
| — | $17M | $20M | $23M | $23M | Current liabilitiesCur. liab. |
| — | 0.9× | 1.1× | 3.0× | 3.0× | Current ratioCurr. ratio |
| — | $595K | $242K | $326K | $326K | Net PP&ENet PP&E |
| — | $21M | $28M | $122M | $122M | Total assetsAssets |
| $3M | $11M | $12M | $12M | $12M | Total debtDebt |
| $3M | $11M | $11M | $7M | $8M | Net debt / (cash)Net debt |
| 2.4× | 2.3× | 1.7× | -739.1× | -739.1× | Interest coverageInt. cov. |
| $3M | $3M | $9M | $80M | $80M | Shareholders’ equityEquity |
| Per share | |||||
| 28.5M | 28.5M | 28.8M | 40.9M | 40.9M | Shares out (diluted)Shares |
| $1.56 | $1.71 | $1.60 | $1.22 | $1.22 | Revenue / shareRev/sh |
| $0.03 | $0.03 | $0.03 | $0.22 | $0.22 | EPS (diluted)EPS |
| $0.07 | $-0.23 | — | $-0.07 | $-0.07 | Owner earnings / shareOE/sh |
| $0.07 | $-0.23 | — | $-0.07 | $-0.07 | Free cash flow / shareFCF/sh |
| $0.01 | $0.00 | — | $0.01 | $0.01 | Cap. spending / shareCapex/sh |
| $0.09 | $0.11 | $0.30 | $1.94 | $1.94 | Book value / shareBVPS |
The diluted share count moved ×1.42 into 2026 — shares issued, not a split the totals corroborate — and the per-share figures carry the counts as filed.
| 3-yr | 5-yr | |
|---|---|---|
| Revenue / share | −7.8%/yr | −7.8%/yr (3-yr) |
| EPS | +92.9%/yr | +92.9%/yr (3-yr) |
| Capital spending / share | −9.9%/yr | −9.9%/yr (3-yr) |
| Book value / share | +175.5%/yr | +175.5%/yr (3-yr) |
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In fiscal 2026 the business reported $9M of profit but ($3M) of owner earnings: $12M less than the profit line, taken out by capital spending and the timing of cash.
| FY2026 | FY2024 | FY2023 | |
|---|---|---|---|
| Reported net income | $9M | $930K | $880K |
| Depreciation & amortizationnon-cash charge added back | +$370K | +$1M | +$1M |
| Working capital & othertiming of cash in and out, other non-cash items | −$12M | −$9M | +$156K |
| Cash from operations | ($3M) | ($7M) | $2M |
| Capital expenditurecash put back in to keep running and to grow | −$206K | −$60K | −$196K |
| Owner earnings | ($3M) | ($7M) | $2M |
| Owner-earnings marginowner earnings ÷ revenue | -6% | -13% | 4% |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position .
Much of fiscal 2026's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
Will it survive?
- Can it pay its interest? -739.1×Does not cover its interestOperating income ($12M) ÷ interest expense $16K
What this means
A full year of operating profit didn't cover the interest bill. This is the zombie zone: the business depends on refinancing, asset sales, or forbearance to service its debt.
- Net debt against an operating lossCash $5M − debt $12M
What this means
Netting $5M of cash and short-term investments against $12M of debt leaves $8M owed, with no operating profit this year to measure it against — understand that combination before anything else about the company. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- Not enough data
What this means
The filing data didn't include the inputs for this check.
Is it a good business?
- Solid through the cycle4-yr median, range -14%–14%; -14% latest = NOPAT ($12M) ÷ invested capital $87MIndustry peers: median 8%
What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. The headline is the median of the last 4 years (it ran -14% most recently), so one peak or trough year doesn't set the verdict. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- Consumes cash through the cycle3-yr median margin, range -13%–4%; latest ($3M) = operating cash ($3M) − maintenance capex $206KIndustry peers: median 0%
What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's -6% of revenue this year, a -6% median across 3 years.
- Are earnings backed by cash? -0.31×Thinly cash-backedCash from ops ($3M) ÷ net income $9M
In the filing’s words Read against the cash, reported earnings have run ahead of the operating cash the business generated over the record — about 16% of assets a year, among the widest gaps in the catalogue. For an inventory- or content-heavy grower that can be cash tied up in real assets as it expands; elsewhere it can mean the earnings lean on accounting estimates — the cash-flow statement against the income statement is where to tell which.
What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- No surplus to allocate
What this means
The business didn't generate positive Owner Earnings this year, so any distributions came from the balance sheet or borrowing, not from operations.
- Investing or harvesting? 0.56×HarvestingCapex $206K ÷ depreciation $370K
What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Graham’s defensive tests · 2 of 3 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size MissRevenue ≥ $2B · $50M
What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity PassCurrent ratio ≥ 2× · 2.99×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt PassDebt ≤ working capital · $12M vs $45M WC
What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $0.09/share (latest year $0.22), the averaged base the calculator's gate runs on, and book value is $1.94/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Durability & moat, 2023–2026
Whether the record’s returns held, and what the capital reinvested earned.
- Profitable years 4 of 4
What this means
Never lost money over the record, the earnings stability Graham insisted on.
- Return on capital ≥ 15% 0 of 4 yrs
What this means
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 3% → −10% (2-yr avg ends)
What this means
Through the cycle the operating margin slipped — about 3% early to −10% lately, median 2% — competition or costs are biting in.
- Reinvestment, incremental ROIC −16%
What this means
Reinvested capital came back at a negative incremental return over this window — the invested base grew while operating profit did not. The filings show where it went.
- Worst year 2026 · −24.1% op. margin
What this means
Operations went underwater in 2026, understand why before trusting the good years.
- Share count +12.8%/yr
What this means
The share count is rising, dilution works against you on a per-share basis.
All figures as filed; the source filing is linked above.
Current Position
as of fiscal year-end, Mar 31, 2026Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
- Cash & short-term investments$5M
- Receivables$7M
- Other current assets$55M
- Debt due within a year$12M
- Accounts payable$2M
- Other current liabilities$9M
From the company's latest filing.
What an owner would ask, FY2025
read the 10-K →- How much of the revenue rides on one buyer?≈$5M · 10% of revenue on the largest customers (TTM)
“In the fiscal year ended March 31, 2025, 5 of our customers accounted for more than 10% of our annual revenue, all being construction contractors in Hong Kong, for 31.1%, 18.6%, 12.0%, 10.8% and 10.2%, respectively.”verify →
The questions the record and the charts do not answer on their own; each carries the figure and the place to look.
Peers, Construction & Engineering
The same industry, side by side on owner economics. Each column names the period it is read over, and a median resting on fewer than three years carries that count beside it; the group median at the foot is the line to read each figure against.
| Company | Revenuelatest FY, USD | Gross marginmedian over the record | Op. marginmedian over the record | ROICmedian over the record | Owner earn. marginmedian over the record |
|---|---|---|---|---|---|
| MTRXMatrix Service Company | $874M | 6% | -3.7% | -16% | 1% |
| LMBLimbach Holdings Inc. | $647M | 18% | 2.9% | 10% | 6% |
| BBCPConcrete Pumping Holdings Inc. | $393M | 41% | 12.0% | 6% | 10% |
| KAZRSkyline Builders Group Holding Limited | $50M | 6% | 2.6% | 8% | -6% |
| JLHLJulong Holding Limited | $38M | 16% | 11.5% | 19%1y | 14%2y |
| PBKPowerBank Corporation | $29M | 25% | -7.6% | -23% | 14%2y |
| WXMWF International Limited | $13M | 16% | 5.5% | 23% | 5%1y |
| PHOEPhoenix Asia Holdings Limited | $7M | 26% | 17.3% | 90% | 6%2y |
| Group median | — | 17% | 4.2% | 9% | 6% |
The price
What a price has to assume.
What the price implies
reverse-DCFEnter the home-market price, not the US ADR quote. Skyline Builders Group Holding Limited reports in USD, and every figure here (owner earnings, book value, the share count) is on that ordinary-share basis. Enter the price on the same basis: the local-exchange quote per ordinary share. A US ADR price in dollars bundles the ADR-to-ordinary ratio, so it will not reconcile with these figures and would throw the multiple off.
Skyline Builders Group Holding Limited is profitable, but owner earnings are negative this year because capital spending currently outruns operating cash, a build-out, so the owner-earnings reverse-DCF has no positive base to grow. We read the price from both ends instead: type a price to see the steady-state profitability it demands, then set the mature margin you would believe and weigh the two against each other. Nothing leaves your browser unless you enter it in your notebook.
Revenue, delivered3%/yr’23→’26
Enter a price to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Two reads of one future. From your price: the owner earnings the company must reach, valued at a mature multiple and discounted back at your rate, expressed as the margin it implies on revenue grown at your rate. From your belief: the mature margin you would credit, set on the dial above. When the margin the price demands runs above the one you would believe, you are paying for a future taken on faith. For a deep cyclical at a trough, normalized through-cycle earnings are the better lens; this mode is for the genuinely unprofitable, and for the profitable business whose capital spending currently outruns its cash.
Manual order: ← KARO its page in the Manual KBSX →
Industry order: ← JLHL the Construction & Engineering chapter KBR →