G-bits Network Technology (Xiamen) (SHSE:603444) - Share price, News & Analysis

Q: What is the Fair Price of 603444 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

603444 (CN¥248.51) is trading below our estimate of [[fair value]] (CN¥977.88)

603444 fundamental analysis
Snowflake Score
Valuation	6/6
Future Growth	2/6
Past Performance	3/6
Financial Health	6/6
Dividends	3/6

603444 Stock Overview

G-bits Network Technology (Xiamen) Co., Ltd.

Rewards

Trading at 74.6% below our estimate of its fair value

Earnings are forecast to grow 15.87% per year

Trading at good value vs. peer average Price-To-Earnings ratio

Trading at good value vs. industry average Price-To-Earnings ratio

Trading below our calculated fair Price-To-Earnings ratio

Analysts in good agreement that stock price will rise by 68.2%

Risk Analysis

Dividend of 6.44% is not well covered

G-bits Network Technology (Xiamen) Competitors

Kunlun Tech

SZSE:300418

CN¥14.6b

Kingnet Network

SZSE:002517

CN¥13.8b

Shen Zhen Shengxunda TechnologyLtd

SZSE:300518

CN¥6.9b

Perfect World

SZSE:002624

CN¥24.6b

Price History & Performance

Summary of all time highs, changes and price drops for G-bits Network Technology (Xiamen)
Historical stock prices
Current Share Price	CN¥248.51
52 Week High	CN¥448.55
52 Week Low	CN¥236.66
Beta	0.088
1 Month Change	-10.46%
3 Month Change	-33.55%
1 Year Change	-36.49%
3 Year Change	-5.88%
5 Year Change	11.15%
Change since IPO	219.59%

Shareholder Returns

	603444	CN Entertainment	CN Market
7D	-1.7%	-4.9%	-3.3%
1Y	-36.5%	-25.1%	-19.2%

Return vs Industry: 603444 underperformed the CN Entertainment industry which returned -25.1% over the past year.

Return vs Market: 603444 underperformed the CN Market which returned -19.2% over the past year.

Price Volatility

Is 603444's price volatile compared to industry and market?
603444 volatility
603444 Average Weekly Movement	4.9%
Entertainment Industry Average Movement	5.6%
Market Average Movement	5.8%
10% most volatile stocks in CN Market	9.2%
10% least volatile stocks in CN Market	3.8%

Stable Share Price: 603444 is not significantly more volatile than the rest of CN stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: 603444's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2004	1,091	Hong Yan Lu	https://www.g-bits.com

G-bits Network Technology (Xiamen) Co., Ltd. develops and operates of video games. The company offers client, web, mobile, and VR games.

G-bits Network Technology (Xiamen) Fundamentals Summary

How do G-bits Network Technology (Xiamen)'s earnings and revenue compare to its market cap?
603444 fundamental statistics
Market Cap	CN¥17.86b
Earnings (TTM)	CN¥1.26b
Revenue (TTM)	CN¥4.74b

14.2x

P/E Ratio

3.8x

P/S Ratio

Is 603444 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
603444 income statement (TTM)
Revenue	CN¥4.74b
Cost of Revenue	CN¥519.05m
Gross Profit	CN¥4.22b
Other Expenses	CN¥2.97b
Earnings	CN¥1.26b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	17.48
Gross Margin	89.05%
Net Profit Margin	26.48%
Debt/Equity Ratio	0%

How did 603444 perform over the long term?

See historical performance and comparison

Dividends

6.4%

Current Dividend Yield

92%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 603444 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 603444?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 603444. This is calculated by dividing 603444's market cap by their current preferred multiple.
What is 603444's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥17.86b

603444 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	3.2x
Enterprise Value/EBITDA	7.9x
PEG Ratio	0.9x

Price to Earnings Ratio vs Peers

How does 603444's PE Ratio compare to its peers?

603444 PE Ratio vs Peers

The above table shows the PE ratio for 603444 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	31.3x
300418 Kunlun Tech	12.2x	17.3%	CN¥14.6b
002517 Kingnet Network	14.9x	22.1%	CN¥13.8b
300518 Shen Zhen Shengxunda TechnologyLtd	78.3x	n/a	CN¥6.9b
002624 Perfect World	19.7x	14.9%	CN¥24.6b
603444 G-bits Network Technology (Xiamen)	14.2x	15.9%	CN¥17.9b

Price-To-Earnings vs Peers: 603444 is good value based on its Price-To-Earnings Ratio (14.2x) compared to the peer average (31.3x).

Price to Earnings Ratio vs Industry

How does 603444's PE Ratio compare vs other companies in the CN Entertainment Industry?

Price-To-Earnings vs Industry: 603444 is good value based on its Price-To-Earnings Ratio (14.2x) compared to the CN Entertainment industry average (25.3x)

Price to Earnings Ratio vs Fair Ratio

What is 603444's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

603444 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	14.2x
Fair PE Ratio	21.1x

Price-To-Earnings vs Fair Ratio: 603444 is good value based on its Price-To-Earnings Ratio (14.2x) compared to the estimated Fair Price-To-Earnings Ratio (21.1x).

Share Price vs Fair Value

What is the Fair Price of 603444 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 603444 (CN¥248.51) is trading below our estimate of fair value (CN¥977.88)

Significantly Below Fair Value: 603444 is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Future Growth

How is G-bits Network Technology (Xiamen) forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

15.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 603444's forecast earnings growth (15.9% per year) is above the savings rate (3.2%).

Earnings vs Market: 603444's earnings (15.9% per year) are forecast to grow slower than the CN market (25.8% per year).

High Growth Earnings: 603444's earnings are forecast to grow, but not significantly.

Revenue vs Market: 603444's revenue (14.5% per year) is forecast to grow slower than the CN market (18.1% per year).

High Growth Revenue: 603444's revenue (14.5% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 603444's Return on Equity is forecast to be high in 3 years time (28.7%)

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Past Performance

How has G-bits Network Technology (Xiamen) performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

19.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 603444 has high quality earnings.

Growing Profit Margin: 603444's current net profit margins (26.5%) are lower than last year (37.6%).

Past Earnings Growth Analysis

Earnings Trend: 603444's earnings have grown by 19.9% per year over the past 5 years.

Accelerating Growth: 603444's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 603444 had negative earnings growth (-10.1%) over the past year, making it difficult to compare to the Entertainment industry average (-18.7%).

Return on Equity

High ROE: 603444's Return on Equity (34.3%) is considered high.

Discover strong past performing companies

Financial Health

How is G-bits Network Technology (Xiamen)'s financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 603444's short term assets (CN¥3.9B) exceed its short term liabilities (CN¥1.9B).

Long Term Liabilities: 603444's short term assets (CN¥3.9B) exceed its long term liabilities (CN¥187.8M).

Debt to Equity History and Analysis

Debt Level: 603444 is debt free.

Reducing Debt: 603444 has no debt compared to 5 years ago when its debt to equity ratio was 6.3%.

Debt Coverage: 603444 has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: 603444 has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is G-bits Network Technology (Xiamen) current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

6.44%

Current Dividend Yield

Dividend Yield vs Market

G-bits Network Technology (Xiamen) Dividend Yield vs Market

How does G-bits Network Technology (Xiamen) dividend yield compare to the market?
Segment	Dividend Yield
Company (G-bits Network Technology (Xiamen))	6.4%
Market Bottom 25% (CN)	0.5%
Market Top 25% (CN)	2.2%
Industry Average (Entertainment)	2.8%
Analyst forecast in 3 Years (G-bits Network Technology (Xiamen))	5.8%

Notable Dividend: 603444's dividend (6.44%) is higher than the bottom 25% of dividend payers in the CN market (0.55%).

High Dividend: 603444's dividend (6.44%) is in the top 25% of dividend payers in the CN market (2.16%)

Stability and Growth of Payments

Stable Dividend: 603444 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 603444's dividend payments have increased, but the company has only paid a dividend for 5 years.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (91.6%), 603444's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (55.1%), 603444's dividend payments are covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

0.8yrs

Average board tenure

CEO

Hong Yan Lu (45 yo)

no data

Tenure

CN¥713,300

Compensation

Mr. Lu Hong Yan serves as Chairman of the Board and General Manager at Xiamen Gigabit Network Limited. Mr. Lu serves as an Executive Director of Xiamen Jufeng Software Technology Co., Ltd., Xiamen Leiting...

Board Members

Experienced Board: 603444's board of directors are not considered experienced ( 0.8 years average tenure), which suggests a new board.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

What is the ownership structure of 603444?
Owner Type	Number of Shares	Ownership Percentage
Institutions	10,227,462	14.2%
General Public	28,680,433	39.9%
Individual Insiders	32,958,387	45.9%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Top Shareholders

Top 25 shareholders own 57.02% of the company

Ownership	Name	Shares	Current Value	Change %	Portfolio %
30.1%	Hong Yan Lu	21,629,475	CN¥5.4b	0%	no data
11.47%	Tuo Lin Chen	8,240,025	CN¥2.0b	0%	no data
2.02%	Zhi Hui Huang	1,450,282	CN¥360.4m	0%	no data
1.88%	Pei Ying Li	1,350,000	CN¥335.5m	0%	no data
1.59%	Zhongtai Securities (Shanghai) Asset Management Co.,Ltd.	1,142,768	CN¥284.0m	0%	3.1%
1.58%	Fullgoal Fund Management Co., Ltd.	1,138,844	CN¥283.0m	0%	0.12%
1.05%	National Council for Social Security Fund	751,901	CN¥186.9m	0%	0.04%
0.9%	Yinhua Fund Management Co. Ltd.	644,434	CN¥160.1m	-13.2%	0.15%
0.85%	Bosera Asset Management Co., Ltd.	614,010	CN¥152.6m	0%	0.14%
0.74%	China Asset Management Co., Ltd.	529,215	CN¥131.5m	0%	0.04%
0.68%	E Fund Management Co., Ltd.	486,618	CN¥120.9m	0%	0.03%
0.63%	Lombarda China Fund Management Co., Ltd.	454,597	CN¥113.0m	0%	0.06%
0.55%	GF Fund Management Co., Ltd.	396,984	CN¥98.7m	0%	0.04%
0.5%	China Southern Asset Management Co., Ltd.	356,610	CN¥88.6m	0%	0.04%
0.46%	Baoying Fund Management Co., Ltd.	333,100	CN¥82.8m	0%	0.39%
0.3%	Guotai Asset Management Co., Ltd.	212,397	CN¥52.8m	0%	0.04%
0.28%	Yan Gao	204,125	CN¥50.7m	0%	no data
0.25%	The Vanguard Group, Inc.	182,916	CN¥45.5m	0%	no data
0.24%	Acadian Asset Management LLC	174,519	CN¥43.4m	0.03%	0.02%
0.23%	Great Wall Fund Management Co. Ltd.	163,752	CN¥40.7m	0%	0.16%
0.18%	BlackRock, Inc.	127,167	CN¥31.6m	6.44%	no data
0.15%	ABC-CA Fund Management Co., Ltd.	107,200	CN¥26.6m	0%	0.07%
0.13%	ICBC Credit Suisse Asset Management Co., Ltd.	96,080	CN¥23.9m	0%	0.02%
0.13%	Penghua Fund Management Co. Ltd.	94,506	CN¥23.5m	0%	0.02%
0.13%	Strategic Advisers LLC	93,773	CN¥23.3m	0.17%	no data

Ticker	Exchange	Primary Security	Security Type	Country	Currency	Listed on
603444	SHSE (Shanghai Stock Exchange)	Yes	Domestic Shares	CN	CNY	Jan 2017
603444	XSSC (Shanghai Stock Exchange - Shanghai - Hong Kong Stock Connect)	Yes	Domestic Shares	CN	CNY	Jan 2017

Data	Last Updated (UTC time)
Company Analysis	2022/10/05 00:00
End of Day Share Price	2022/09/30 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31