Linkage Software (SHSE:688588) - Share price, News & Analysis

688588 fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	3/6
Past Performance	2/6
Financial Health	6/6
Dividends	3/6

688588 Stock Overview

Linkage Software Co., LTD offers financial software outsourcing services for domestic securities industry.

Rewards

PE ratio (28.1x) is below the CN market (30.4x)

Earnings are forecast to grow 20.67% per year

Risk Analysis

Unstable dividend track record

Linkage Software Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Linkage Software
Historical stock prices
Current Share Price	CN¥10.27
52 Week High	CN¥19.76
52 Week Low	CN¥8.70
Beta	0.10
1 Month Change	-10.38%
3 Month Change	-28.68%
1 Year Change	-37.11%
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	-75.51%

Shareholder Returns

	688588	CN Software	CN Market
7D	-1.0%	-0.07%	1.1%
1Y	-37.1%	-32.2%	-15.4%

Return vs Industry: 688588 underperformed the CN Software industry which returned -32.7% over the past year.

Return vs Market: 688588 underperformed the CN Market which returned -15.8% over the past year.

Price Volatility

Is 688588's price volatile compared to industry and market?
688588 volatility
688588 Average Weekly Movement	6.0%
Software Industry Average Movement	7.2%
Market Average Movement	7.4%
10% most volatile stocks in CN Market	10.3%
10% least volatile stocks in CN Market	5.3%

Stable Share Price: 688588 is less volatile than 75% of CN stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: 688588's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2003	1,745	Baoquan Zhang	https://www.linkstec.com

Linkage Software Co., LTD offers financial software outsourcing services for domestic securities industry. The company’s software is used for the implementation of the line items, which includes micro-credit financing platform for online brokerage, data mining solutions, real-time big data solutions, public equity raised platform and integrated financial services platform solutions, business related to the field of Internet banking, mobile data terminals, big data analytics, and trading and other pages. It also offers software development services.

Linkage Software Fundamentals Summary

How do Linkage Software's earnings and revenue compare to its market cap?
688588 fundamental statistics
Market Cap	CN¥4.11b
Earnings (TTM)	CN¥146.28m
Revenue (TTM)	CN¥653.18m

28.1x

P/E Ratio

6.3x

P/S Ratio

Is 688588 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
688588 income statement (TTM)
Revenue	CN¥653.18m
Cost of Revenue	CN¥356.14m
Gross Profit	CN¥297.03m
Other Expenses	CN¥150.76m
Earnings	CN¥146.28m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.37
Gross Margin	45.48%
Net Profit Margin	22.39%
Debt/Equity Ratio	0%

How did 688588 perform over the long term?

See historical performance and comparison

Dividends

1.9%

Current Dividend Yield

55%

Payout Ratio

Valuation

Is Linkage Software undervalued compared to its fair value and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

28.08x

Price to Earnings (PE) ratio

Share Price vs. Fair Value

Below Fair Value: 688588 (CN¥10.27) is trading above our estimate of fair value (CN¥3.87)

Significantly Below Fair Value: 688588 is trading above our estimate of fair value.

Price To Earnings Ratio

PE vs Industry: 688588 is good value based on its PE Ratio (28.1x) compared to the CN Software industry average (47.4x).

PE vs Market: 688588 is good value based on its PE Ratio (28.1x) compared to the CN market (30.4x).

Price to Earnings Growth Ratio

PEG Ratio: 688588 is poor value based on its PEG Ratio (1.4x)

Price to Book Ratio

PB vs Industry: 688588 is overvalued based on its PB Ratio (3.1x) compared to the CN Software industry average (2.8x).

Future Growth

How is Linkage Software forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

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

20.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 688588's forecast earnings growth (20.7% per year) is above the savings rate (3.3%).

Earnings vs Market: 688588's earnings (20.7% per year) are forecast to grow slower than the CN market (23.8% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 688588's revenue (18.4% per year) is forecast to grow faster than the CN market (17.2% per year).

High Growth Revenue: 688588's revenue (18.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 688588's Return on Equity is forecast to be low in 3 years time (13.7%).

Past Performance

How has Linkage Software performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

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

21.6%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 688588 has high quality earnings.

Growing Profit Margin: 688588's current net profit margins (22.4%) are lower than last year (31%).

Past Earnings Growth Analysis

Earnings Trend: 688588's earnings have grown significantly by 21.6% per year over the past 5 years.

Accelerating Growth: 688588's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 688588 had negative earnings growth (-27.8%) over the past year, making it difficult to compare to the Software industry average (-13%).

Return on Equity

High ROE: 688588's Return on Equity (11.2%) is considered low.

Financial Health

How is Linkage Software'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: 688588's short term assets (CN¥980.9M) exceed its short term liabilities (CN¥51.9M).

Long Term Liabilities: 688588's short term assets (CN¥980.9M) exceed its long term liabilities (CN¥18.4M).

Debt to Equity History and Analysis

Debt Level: 688588 is debt free.

Reducing Debt: 688588 had no debt 5 years ago.

Debt Coverage: 688588 has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: 688588 has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

Dividend

What is Linkage Software current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

1.95%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 688588's dividend (1.95%) is higher than the bottom 25% of dividend payers in the CN market (0.55%).

High Dividend: 688588's dividend (1.95%) is low compared to the top 25% of dividend payers in the CN market (2.11%).

Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, 688588 has been paying a dividend for less than 10 years.

Growing Dividend: 688588 has only been paying a dividend for 2 years, and since then payments have not increased.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (54.7%), 688588's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (66.3%), 688588's dividend payments are covered by cash flows.

Next Steps

Explore strong dividend paying companies in the Software industry.

Management

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

CEO

Baoquan Zhang (56 yo)

no data

Tenure

Mr. Baoquan Zhang serves as Chairman of the Board and General Manager at Linkage Software Co., LTD. Mr. Zhang holds Master's degree.

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

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

Data	Last Updated (UTC time)
Company Analysis	2022/05/17 00:00
End of Day Share Price	2022/05/17 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31