Hongren Li has been the CEO of Yuanda China Holdings Limited (HKG:2789) since 2017. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Next, we’ll consider growth that the business demonstrates. And finally – as a second measure of performance – we will look at the returns shareholders have received over the last few years. The aim of all this is to consider the appropriateness of CEO pay levels.
Check out our latest analysis for Yuanda China Holdings
How Does Hongren Li’s Compensation Compare With Similar Sized Companies?
Our data indicates that Yuanda China Holdings Limited is worth HK$571m, and total annual CEO compensation was reported as CN¥2.7m for the year to December 2018. It is worth noting that the CEO compensation consists almost entirely of the salary, worth CN¥2.7m. We took a group of companies with market capitalizations below CN¥1.4b, and calculated the median CEO total compensation to be CN¥1.6m.
As you can see, Hongren Li is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Yuanda China Holdings Limited is paying too much. A closer look at the performance of the underlying business will give us a better idea about whether the pay is particularly generous.
You can see, below, how CEO compensation at Yuanda China Holdings has changed over time.
Is Yuanda China Holdings Limited Growing?
On average over the last three years, Yuanda China Holdings Limited has grown earnings per share (EPS) by 46% each year (using a line of best fit). Its revenue is down 25% over last year.
Overall this is a positive result for shareholders, showing that the company has improved in recent years. The lack of revenue growth isn’t ideal, but it is the bottom line that counts most in business. We don’t have analyst forecasts, but you might want to assess this data-rich visualization of earnings, revenue and cash flow.
Has Yuanda China Holdings Limited Been A Good Investment?
Given the total loss of 44% over three years, many shareholders in Yuanda China Holdings Limited are probably rather dissatisfied, to say the least. It therefore might be upsetting for shareholders if the CEO were paid generously.
In Summary…
We examined the amount Yuanda China Holdings Limited pays its CEO, and compared it to the amount paid by similar sized companies. Our data suggests that it pays above the median CEO pay within that group.
However, the earnings per share growth over three years is certainly impressive. However, the returns to investors are far less impressive, over the same period. Considering the per share profit growth, but keeping in mind the weak returns, we’d need more time to form a view on CEO compensation. Shareholders may want to check for free if Yuanda China Holdings insiders are buying or selling shares.
Important note: Yuanda China Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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