Declared Dividend • May 14
Dividend reduced to CN¥0.073 Dividend of CN¥0.073 is 62% lower than last year. Ex-date: 19th May 2026 Payment date: 19th May 2026 Dividend yield will be 0.2%, which is lower than the industry average of 0.8%. Sustainability & Growth Dividend is covered by earnings (9% earnings payout ratio) but the company has no free cash flows available, indicating it may be using cash reserves or debt to pay the dividend. The dividend has increased by an average of 8.5% per year over the past 8 years. However, payments have been volatile during that time. EPS is expected to grow by 134% over the next 3 years, which should provide support to the dividend and adequate earnings cover. New Risk • Apr 28
New major risk - Earnings quality The company has a high level of non-cash earnings. Accrual ratio: 37% This is considered a major risk. Non-cash earnings can arise from many different things. However, if a company consistently has a high level of non-cash earnings, it may be a sign that they are recognizing revenue from customers before the full value of the sales are received as cash or they are not depreciating the value of their assets appropriately. These are practices that inflate earnings, while not providing a similar increase to cash flows. Companies in some select industries naturally have a high level of non-cash earnings and it is not a major concern. However, in the worst case scenario it can be an early sign of performance manipulation by management. Currently, the following risks have been identified for the company: Major Risks Debt is not well covered by operating cash flow (currently running at an operating cash loss). High level of non-cash earnings (37% accrual ratio). Minor Risk Profit margins are more than 30% lower than last year (0.4% net profit margin). Major Estimate Revision • Apr 11
Consensus EPS estimates fall by 46% The consensus outlook for fiscal year 2026 has been updated. 2026 EPS estimate fell from CN¥1.83 to CN¥0.99 per share. Revenue forecast steady at CN¥156.3b. Net income forecast to grow 38% next year vs 66% growth forecast for IT industry in China. Consensus price target of CN¥55.97 unchanged from last update. Share price rose 10% to CN¥35.31 over the past week. Announcement • Mar 31
Digital China Group Co., Ltd. to Report Q1, 2026 Results on Apr 28, 2026 Digital China Group Co., Ltd. announced that they will report Q1, 2026 results on Apr 28, 2026 Reported Earnings • Mar 31
Full year 2025 earnings: EPS misses analyst expectations Full year 2025 results: EPS: CN¥0.77 (down from CN¥1.17 in FY 2024). Revenue: CN¥143.8b (up 12% from FY 2024). Net income: CN¥522.9m (down 31% from FY 2024). Profit margin: 0.4% (down from 0.6% in FY 2024). Revenue was in line with analyst estimates. Earnings per share (EPS) missed analyst estimates by 41%. Revenue is forecast to grow 7.8% p.a. on average during the next 2 years, compared to a 18% growth forecast for the IT industry in China. Over the last 3 years on average, earnings per share has fallen by 22% per year but the company’s share price has increased by 2% per year, which means it is well ahead of earnings. Announcement • Mar 31
Digital China Group Co., Ltd., Annual General Meeting, Apr 22, 2026 Digital China Group Co., Ltd., Annual General Meeting, Apr 22, 2026, at 14:30 China Standard Time. Location: No. 9, Shangdi 9th Street, Haidian District, Beijing China Announcement • Dec 31
Digital China Group Co., Ltd. to Report Fiscal Year 2025 Results on Mar 31, 2026 Digital China Group Co., Ltd. announced that they will report fiscal year 2025 results on Mar 31, 2026 Board Change • Dec 12
High number of new directors There are 5 new directors who have joined the board in the last 3 years. Independent Director Long Peng was the last director to join the board, commencing their role in 2024. The company’s lack of board continuity is considered a risk according to the Simply Wall St Risk Model. Price Target Changed • Nov 29
Price target increased by 16% to CN¥50.49 Up from CN¥43.58, the current price target is an average from 2 analysts. New target price is 27% above last closing price of CN¥39.72. Stock is up 17% over the past year. The company is forecast to post earnings per share of CN¥1.46 for next year compared to CN¥1.17 last year. Reported Earnings • Oct 31
Third quarter 2025 earnings released: EPS: CN¥0.35 (vs CN¥0.59 in 3Q 2024) Third quarter 2025 results: EPS: CN¥0.35 (down from CN¥0.59 in 3Q 2024). Revenue: CN¥30.8b (up 6.1% from 3Q 2024). Net income: CN¥243.6m (down 37% from 3Q 2024). Profit margin: 0.8% (down from 1.3% in 3Q 2024). Revenue is forecast to grow 5.7% p.a. on average during the next 3 years, compared to a 16% growth forecast for the IT industry in China. Over the last 3 years on average, earnings per share has fallen by 13% per year but the company’s share price has increased by 20% per year, which means it is well ahead of earnings. Announcement • Sep 30
Digital China Group Co., Ltd. to Report Q3, 2025 Results on Oct 31, 2025 Digital China Group Co., Ltd. announced that they will report Q3, 2025 results on Oct 31, 2025 Reported Earnings • Aug 28
Second quarter 2025 earnings released: EPS: CN¥0.31 (vs CN¥0.43 in 2Q 2024) Second quarter 2025 results: EPS: CN¥0.31 (down from CN¥0.43 in 2Q 2024). Revenue: CN¥39.8b (up 20% from 2Q 2024). Net income: CN¥209.1m (down 24% from 2Q 2024). Profit margin: 0.5% (down from 0.8% in 2Q 2024). Revenue is forecast to grow 5.7% p.a. on average during the next 3 years, compared to a 16% growth forecast for the IT industry in China. Over the last 3 years on average, earnings per share has fallen by 3% per year but the company’s share price has increased by 39% per year, which means it is well ahead of earnings. Announcement • Jul 02
Digital China Group Co., Ltd. to Report First Half, 2025 Results on Aug 28, 2025 Digital China Group Co., Ltd. announced that they will report first half, 2025 results on Aug 28, 2025 Major Estimate Revision • May 08
Consensus EPS estimates fall by 31%, revenue upgraded The consensus outlook for fiscal year 2025 has been updated. 2025 revenue forecast increased from CN¥134.0b to CN¥140.8b. EPS estimate fell from CN¥2.43 to CN¥1.67 per share. Net income forecast to grow 81% next year vs 61% growth forecast for IT industry in China. Consensus price target of CN¥46.00 unchanged from last update. Share price rose 3.8% to CN¥42.28 over the past week. Declared Dividend • May 05
Dividend reduced to CN¥0.27 Dividend of CN¥0.27 is 40% lower than last year. Ex-date: 12th May 2025 Payment date: 12th May 2025 Dividend yield will be 0.7%, which is lower than the industry average of 0.8%. Sustainability & Growth Dividend is well covered by both earnings (23% earnings payout ratio) and cash flows (4% cash payout ratio). The dividend has increased by an average of 32% per year over the past 7 years. However, payments have been volatile during that time. EPS is expected to grow by 46% over the next year, which should provide support to the dividend and adequate earnings cover. New Risk • Apr 14
New minor risk - Dividend sustainability The company has an unstable dividend paying track record. The dividend has had an annual drop of over 20% in the past. Dividend yield: 0.7% This is considered a minor risk. If the company has cut or reduced its dividend in the past, it may be a sign that the underlying business is too cyclical to consistently maintain or grow the dividend over the long-term. It may also indicate the company prioritizes other outcomes instead of maintaining the dividend. For dividend paying companies, any reduction in the dividend can significantly impact the share price. Currently, the following risks have been identified for the company: Major Risk Interest payments are not well covered by earnings (2.6x net interest cover). Minor Risks Unstable dividend paying track record with dividend experiencing an annual drop of over 20% in the past. Share price has been volatile over the past 3 months (9.2% average weekly change). Large one-off items impacting financial results. Profit margins are more than 30% lower than last year (0.6% net profit margin). Valuation Update With 7 Day Price Move • Apr 08
Investor sentiment deteriorates as stock falls 16% After last week's 16% share price decline to CN¥33.90, the stock trades at a forward P/E ratio of 14x. Average forward P/E is 38x in the IT industry in China. Total returns to shareholders of 126% over the past three years. Announcement • Apr 01
Digital China Group Co., Ltd. Proposes Final Cash Dividend for the Year 2024 Digital China Group Co., Ltd. announced on 31 March 2025 the profit distribution proposal for the year 2024 as final cash dividend/10 shares (tax included) of CNY 2.67000000. Announcement • Mar 31
Digital China Group Co., Ltd. to Report Q1, 2025 Results on Apr 26, 2025 Digital China Group Co., Ltd. announced that they will report Q1, 2025 results on Apr 26, 2025 Reported Earnings • Mar 30
Full year 2024 earnings: EPS misses analyst expectations Full year 2024 results: EPS: CN¥1.17 (down from CN¥1.79 in FY 2023). Revenue: CN¥128.2b (up 7.1% from FY 2023). Net income: CN¥752.7m (down 36% from FY 2023). Profit margin: 0.6% (down from 1.0% in FY 2023). Revenue was in line with analyst estimates. Earnings per share (EPS) missed analyst estimates by 45%. Revenue is forecast to grow 5.8% p.a. on average during the next 2 years, compared to a 15% growth forecast for the IT industry in China. Over the last 3 years on average, earnings per share has increased by 26% per year but the company’s share price has increased by 41% per year, which means it is tracking significantly ahead of earnings growth. Announcement • Mar 29
Digital China Group Co., Ltd., Annual General Meeting, Apr 22, 2025 Digital China Group Co., Ltd., Annual General Meeting, Apr 22, 2025, at 14:30 China Standard Time. Location: No. 59, Beizhenghuangqi, Haidian District, Beijing China Valuation Update With 7 Day Price Move • Mar 03
Investor sentiment deteriorates as stock falls 17% After last week's 17% share price decline to CN¥47.89, the stock trades at a forward P/E ratio of 20x. Average forward P/E is 39x in the IT industry in China. Total returns to shareholders of 229% over the past three years. Simply Wall St's valuation model estimates the intrinsic value at CN¥51.28 per share. New Risk • Feb 26
New minor risk - Share price stability The company's share price has been volatile over the past 3 months. It is more volatile than 75% of Chinese stocks, typically moving 8.2% a week. This is considered a minor risk. Share price volatility indicates the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. It also increases the risk of potential losses in the short term as the stock tends to have larger drops in price more frequently than other stocks. Currently, the following risks have been identified for the company: Major Risk Debt is not well covered by operating cash flow (9.4% operating cash flow to total debt). Minor Risk Share price has been volatile over the past 3 months (8.2% average weekly change). Valuation Update With 7 Day Price Move • Feb 07
Investor sentiment improves as stock rises 22% After last week's 22% share price gain to CN¥39.88, the stock trades at a forward P/E ratio of 17x. Average forward P/E is 36x in the IT industry in China. Total returns to shareholders of 163% over the past three years. Simply Wall St's valuation model estimates the intrinsic value at CN¥50.09 per share. Valuation Update With 7 Day Price Move • Jan 06
Investor sentiment deteriorates as stock falls 16% After last week's 16% share price decline to CN¥31.05, the stock trades at a forward P/E ratio of 13x. Average forward P/E is 29x in the IT industry in China. Total returns to shareholders of 99% over the past three years. Simply Wall St's valuation model estimates the intrinsic value at CN¥48.52 per share. Announcement • Dec 31
Digital China Group Co., Ltd. to Report Fiscal Year 2024 Results on Mar 29, 2025 Digital China Group Co., Ltd. announced that they will report fiscal year 2024 results on Mar 29, 2025 Reported Earnings • Oct 31
Third quarter 2024 earnings released: EPS: CN¥0.59 (vs CN¥0.64 in 3Q 2023) Third quarter 2024 results: EPS: CN¥0.59 (down from CN¥0.64 in 3Q 2023). Revenue: CN¥29.0b (up 1.6% from 3Q 2023). Net income: CN¥384.2m (down 7.9% from 3Q 2023). Profit margin: 1.3% (down from 1.5% in 3Q 2023). The decrease in margin was driven by higher expenses. Revenue is forecast to grow 6.1% p.a. on average during the next 3 years, compared to a 15% growth forecast for the IT industry in China. Over the last 3 years on average, earnings per share has increased by 40% per year but the company’s share price has only increased by 32% per year, which means it is significantly lagging earnings growth. Announcement • Sep 30
Digital China Group Co., Ltd. to Report Q3, 2024 Results on Oct 31, 2024 Digital China Group Co., Ltd. announced that they will report Q3, 2024 results on Oct 31, 2024 Valuation Update With 7 Day Price Move • Sep 30
Investor sentiment improves as stock rises 26% After last week's 26% share price gain to CN¥30.78, the stock trades at a forward P/E ratio of 13x. Average forward P/E is 24x in the IT industry in China. Total returns to shareholders of 109% over the past three years. Simply Wall St's valuation model estimates the intrinsic value at CN¥15.93 per share. Announcement • Sep 27
Accton Technology Corporation (TWSE:2345) agreed to acquire 40% stake in Shenzhen Muxi Network Co., Ltd. for CNY 200 million. Digital China Group Co., Ltd. (SZSE:000034) agreed to acquire Joytech Technology (Shenzhen) Co., Ltd. and Accton Technology Co., Ltd. from Accton Technology Corporation (TWSE:2345) for CNY 500 million on September 26, 2024. As part of the consideration, CNY 300 million will be paid in cash and 40% equity in MuXi Networks Ltd, a new entity to be formed by Digital China Group valued at CNY 200 million. Reported Earnings • Aug 31
Second quarter 2024 earnings released: EPS: CN¥0.43 (vs CN¥0.34 in 2Q 2023) Second quarter 2024 results: EPS: CN¥0.43 (up from CN¥0.34 in 2Q 2023). Revenue: CN¥33.3b (up 17% from 2Q 2023). Net income: CN¥274.4m (up 22% from 2Q 2023). Profit margin: 0.8% (in line with 2Q 2023). Revenue is forecast to grow 6.0% p.a. on average during the next 3 years, compared to a 16% growth forecast for the IT industry in China. Over the last 3 years on average, earnings per share has increased by 47% per year but the company’s share price has only increased by 14% per year, which means it is significantly lagging earnings growth. Announcement • Jun 29
Digital China Group Co., Ltd. to Report First Half, 2024 Results on Aug 31, 2024 Digital China Group Co., Ltd. announced that they will report first half, 2024 results on Aug 31, 2024 Valuation Update With 7 Day Price Move • Jun 19
Investor sentiment deteriorates as stock falls 16% After last week's 16% share price decline to CN¥23.81, the stock trades at a forward P/E ratio of 11x. Average forward P/E is 23x in the IT industry in China. Total returns to shareholders of 29% over the past three years. Price Target Changed • May 15
Price target decreased by 14% to CN¥44.67 Down from CN¥52.20, the current price target is an average from 2 analysts. New target price is 55% above last closing price of CN¥28.83. Stock is up 18% over the past year. The company is forecast to post earnings per share of CN¥2.12 for next year compared to CN¥1.79 last year. Declared Dividend • Apr 29
Dividend increased to CN¥0.45 Dividend of CN¥0.45 is 0.04% higher than last year. Ex-date: 6th May 2024 Payment date: 6th May 2024 Dividend yield will be 1.4%, which is higher than the industry average of 0.8%. Sustainability & Growth Dividend is covered by earnings (24% earnings payout ratio) but the company has no free cash flows available, indicating it may be using cash reserves or debt to pay the dividend. The dividend has increased by an average of 51% per year over the past 6 years and payments have been stable during that time. EPS is expected to grow by 65% over the next 3 years, which should provide support to the dividend and adequate earnings cover. Reported Earnings • Apr 28
First quarter 2024 earnings released: EPS: CN¥0.35 (vs CN¥0.32 in 1Q 2023) First quarter 2024 results: EPS: CN¥0.35 (up from CN¥0.32 in 1Q 2023). Revenue: CN¥29.3b (up 7.9% from 1Q 2023). Net income: CN¥234.9m (up 12% from 1Q 2023). Profit margin: 0.8% (in line with 1Q 2023). Revenue is forecast to grow 7.1% p.a. on average during the next 3 years, compared to a 19% growth forecast for the IT industry in China. Over the last 3 years on average, earnings per share has increased by 44% per year but the company’s share price has only increased by 21% per year, which means it is significantly lagging earnings growth. Reported Earnings • Mar 31
Full year 2023 earnings: EPS and revenues miss analyst expectations Full year 2023 results: EPS: CN¥1.79 (up from CN¥1.57 in FY 2022). Revenue: CN¥119.6b (up 3.2% from FY 2022). Net income: CN¥1.17b (up 17% from FY 2022). Profit margin: 1.0% (up from 0.9% in FY 2022). The increase in margin was driven by higher revenue. Revenue missed analyst estimates by 3.0%. Earnings per share (EPS) also missed analyst estimates by 4.2%. Revenue is forecast to grow 8.8% p.a. on average during the next 2 years, compared to a 18% growth forecast for the IT industry in China. Over the last 3 years on average, earnings per share has increased by 40% per year but the company’s share price has only increased by 18% per year, which means it is significantly lagging earnings growth. Announcement • Mar 30
Digital China Group Co., Ltd. to Report Q1, 2024 Results on Apr 27, 2024 Digital China Group Co., Ltd. announced that they will report Q1, 2024 results on Apr 27, 2024 Announcement • Mar 29
Digital China Group Co., Ltd., Annual General Meeting, Apr 22, 2024 Digital China Group Co., Ltd., Annual General Meeting, Apr 22, 2024, at 14:30 China Standard Time. Location: No. 59, Beizhenghuangqi, Haidian District, Beijing China Valuation Update With 7 Day Price Move • Feb 27
Investor sentiment improves as stock rises 20% After last week's 20% share price gain to CN¥31.50, the stock trades at a forward P/E ratio of 15x. Average forward P/E is 25x in the IT industry in China. Total returns to shareholders of 79% over the past three years. Valuation Update With 7 Day Price Move • Feb 05
Investor sentiment deteriorates as stock falls 19% After last week's 19% share price decline to CN¥20.63, the stock trades at a forward P/E ratio of 10x. Average forward P/E is 20x in the IT industry in China. Total returns to shareholders of 28% over the past three years. Announcement • Dec 30
Digital China Group Co., Ltd. to Report Fiscal Year 2023 Results on Mar 29, 2024 Digital China Group Co., Ltd. announced that they will report fiscal year 2023 results on Mar 29, 2024 Reported Earnings • Nov 01
Third quarter 2023 earnings released: EPS: CN¥0.64 (vs CN¥0.45 in 3Q 2022) Third quarter 2023 results: EPS: CN¥0.64 (up from CN¥0.45 in 3Q 2022). Revenue: CN¥28.6b (up 6.4% from 3Q 2022). Net income: CN¥417.3m (up 43% from 3Q 2022). Profit margin: 1.5% (up from 1.1% in 3Q 2022). The increase in margin was driven by higher revenue. Revenue is forecast to grow 8.7% p.a. on average during the next 3 years, compared to a 20% growth forecast for the IT industry in China. Over the last 3 years on average, earnings per share has increased by 36% per year but the company’s share price has only increased by 2% per year, which means it is significantly lagging earnings growth. New Risk • Oct 30
New major risk - Share price stability The company's share price has been highly volatile over the past 3 months. It is more volatile than 90% of Chinese stocks, typically moving 8.4% a week. This is considered a major risk. Share price volatility increases the risk of potential losses in the short-term as the stock tends to have larger drops in price more frequently than other stocks. It may also indicate the stock is highly sensitive to market conditions or economic conditions rather than being sensitive to its own business performance, which may also be inconsistent. Currently, the following risks have been identified for the company: Major Risks Debt is not well covered by operating cash flow (10% operating cash flow to total debt). Share price has been highly volatile over the past 3 months (8.4% average weekly change). Minor Risk Unstable dividend paying track record with dividend experiencing an annual drop of over 20% in the past. Valuation Update With 7 Day Price Move • Oct 30
Investor sentiment improves as stock rises 17% After last week's 17% share price gain to CN¥32.51, the stock trades at a forward P/E ratio of 16x. Average forward P/E is 24x in the IT industry in China. Total returns to shareholders of 31% over the past three years. Simply Wall St's valuation model estimates the intrinsic value at CN¥52.57 per share. Reported Earnings • Aug 31
Second quarter 2023 earnings released: EPS: CN¥0.34 (vs CN¥0.32 in 2Q 2022) Second quarter 2023 results: EPS: CN¥0.34 (up from CN¥0.32 in 2Q 2022). Revenue: CN¥28.5b (down 2.0% from 2Q 2022). Net income: CN¥224.3m (up 11% from 2Q 2022). Profit margin: 0.8% (up from 0.7% in 2Q 2022). The increase in margin was driven by lower expenses. Revenue is forecast to grow 8.6% p.a. on average during the next 3 years, compared to a 19% growth forecast for the IT industry in China. Over the last 3 years on average, earnings per share has increased by 29% per year but the company’s share price has only increased by 7% per year, which means it is significantly lagging earnings growth. Board Change • Aug 24
High number of new directors There are 5 new directors who have joined the board in the last 3 years. VP & Non-Independent Director Haiqiang Ye was the last director to join the board, commencing their role in 2023. The company’s lack of board continuity is considered a risk according to the Simply Wall St Risk Model. Price Target Changed • Aug 11
Price target increased by 11% to CN¥39.50 Up from CN¥35.66, the current price target is an average from 2 analysts. New target price is 40% above last closing price of CN¥28.27. Stock is up 44% over the past year. The company is forecast to post earnings per share of CN¥1.83 for next year compared to CN¥1.57 last year. Valuation Update With 7 Day Price Move • Jun 27
Investor sentiment deteriorates as stock falls 16% After last week's 16% share price decline to CN¥26.02, the stock trades at a forward P/E ratio of 13x. Average forward P/E is 31x in the IT industry in China. Total returns to shareholders of 11% over the past three years. Valuation Update With 7 Day Price Move • May 31
Investor sentiment improves as stock rises 17% After last week's 17% share price gain to CN¥28.32, the stock trades at a forward P/E ratio of 14x. Average forward P/E is 31x in the IT industry in China. Total returns to shareholders of 23% over the past three years. Simply Wall St's valuation model estimates the intrinsic value at CN¥40.25 per share. Upcoming Dividend • May 03
Upcoming dividend of CN¥0.45 per share at 1.7% yield Eligible shareholders must have bought the stock before 10 May 2023. Payment date: 10 May 2023. Payout ratio is a comfortable 28% but the company is paying out more than the cash it is generating. Trailing yield: 1.7%. Lower than top quartile of Chinese dividend payers (2.0%). Higher than average of industry peers (0.5%). Valuation Update With 7 Day Price Move • Apr 27
Investor sentiment deteriorates as stock falls 18% After last week's 18% share price decline to CN¥25.50, the stock trades at a forward P/E ratio of 13x. Average forward P/E is 28x in the IT industry in China. Total returns to shareholders of 5.3% over the past three years. Valuation Update With 7 Day Price Move • Mar 22
Investor sentiment improves as stock rises 16% After last week's 16% share price gain to CN¥29.76, the stock trades at a forward P/E ratio of 15x. Average forward P/E is 35x in the IT industry in China. Total returns to shareholders of 3.2% over the past three years. Reported Earnings • Mar 18
Full year 2022 earnings released: EPS: CN¥1.56 (vs CN¥0.37 in FY 2021) Full year 2022 results: EPS: CN¥1.56 (up from CN¥0.37 in FY 2021). Revenue: CN¥115.9b (down 5.3% from FY 2021). Net income: CN¥1.00b (up 322% from FY 2021). Profit margin: 0.9% (up from 0.2% in FY 2021). The increase in margin was driven by lower expenses. Revenue is forecast to grow 20% p.a. on average during the next 2 years, compared to a 19% growth forecast for the IT industry in China. Over the last 3 years on average, earnings per share has increased by 6% per year but the company’s share price has fallen by 4% per year, which means it is significantly lagging earnings. Valuation Update With 7 Day Price Move • Feb 15
Investor sentiment improves as stock rises 16% After last week's 16% share price gain to CN¥27.23, the stock trades at a forward P/E ratio of 15x. Average forward P/E is 31x in the IT industry in China. Total returns to shareholders of 12% over the past three years. Reported Earnings • Oct 30
Third quarter 2022 earnings released: EPS: CN¥0.45 (vs CN¥0.27 in 3Q 2021) Third quarter 2022 results: EPS: CN¥0.45 (up from CN¥0.27 in 3Q 2021). Revenue: CN¥26.8b (down 8.5% from 3Q 2021). Net income: CN¥291.2m (up 64% from 3Q 2021). Profit margin: 1.1% (up from 0.6% in 3Q 2021). The increase in margin was driven by lower expenses. Over the last 3 years on average, earnings per share has fallen by 8% per year but the company’s share price has increased by 18% per year, which means it is well ahead of earnings. Valuation Update With 7 Day Price Move • Oct 26
Investor sentiment improved over the past week After last week's 19% share price gain to CN¥25.85, the stock trades at a trailing P/E ratio of 21.9x. Average trailing P/E is 42x in the IT industry in China. Total returns to shareholders of 70% over the past three years. Valuation Update With 7 Day Price Move • Oct 12
Investor sentiment improved over the past week After last week's 23% share price gain to CN¥19.65, the stock trades at a trailing P/E ratio of 16.6x. Average trailing P/E is 40x in the IT industry in China. Total returns to shareholders of 32% over the past three years. Reported Earnings • Sep 02
Second quarter 2022 earnings released: EPS: CN¥0.32 (vs CN¥0.45 loss in 2Q 2021) Second quarter 2022 results: EPS: CN¥0.32 (up from CN¥0.45 loss in 2Q 2021). Revenue: CN¥29.1b (down 11% from 2Q 2021). Net income: CN¥202.5m (up CN¥489.6m from 2Q 2021). Profit margin: 0.7% (up from net loss in 2Q 2021). The move to profitability was driven by lower expenses. Over the last 3 years on average, earnings per share has fallen by 20% per year but the company’s share price has increased by 1% per year, which means it is well ahead of earnings. Valuation Update With 7 Day Price Move • Jul 26
Investor sentiment improved over the past week After last week's 17% share price gain to CN¥19.24, the stock trades at a trailing P/E ratio of 45.6x. Average trailing P/E is 43x in the IT industry in China. Total returns to shareholders of 49% over the past three years. Reported Earnings • Apr 28
First quarter 2022 earnings: Revenues exceed analysts expectations while EPS lags behind First quarter 2022 results: EPS: CN¥0.29 (up from CN¥0.24 in 1Q 2021). Revenue: CN¥28.6b (up 19% from 1Q 2021). Net income: CN¥187.3m (up 21% from 1Q 2021). Profit margin: 0.7% (up from 0.6% in 1Q 2021). Revenue exceeded analyst estimates by 1.3%. Earnings per share (EPS) missed analyst estimates by 14%. Over the last 3 years on average, earnings per share has fallen by 27% per year but the company’s share price has only fallen by 5% per year, which means it has not declined as severely as earnings. Upcoming Dividend • Apr 28
Upcoming dividend of CN¥0.19 per share Eligible shareholders must have bought the stock before 05 May 2022. Payment date: 05 May 2022. Payout ratio is a comfortable 52% but the company is not cash flow positive. Trailing yield: 1.4%. Lower than top quartile of Chinese dividend payers (2.3%). Higher than average of industry peers (1.0%). Announcement • Apr 26
Digital China Group Co., Ltd. Implements A Shares Final Cash Distribution for 2021, Payable on 05 May 2022 Digital China Group Co., Ltd. implemented A shares final cash distribution of CNY 1.91842400 per 10 shares for 2021. Record date: 29 April 2022. Ex-date: 05 May 2022. Payment date: 05 May 2022. Announcement • Apr 23
Digital China Group Co., Ltd. Approves Cash Dividend for the Year 2021 Digital China Group Co., Ltd. at its AGM held on April 21, 2022, approved cash dividend/10 shares (tax included) of CNY 1.91000000 for the year 2021. Reported Earnings • Mar 30
Full year 2021 earnings: Revenues exceed analysts expectations while EPS lags behind Full year 2021 results: EPS: CN¥0.37 (down from CN¥0.96 in FY 2020). Revenue: CN¥122.4b (up 33% from FY 2020). Net income: CN¥238.1m (down 62% from FY 2020). Profit margin: 0.2% (down from 0.7% in FY 2020). Revenue exceeded analyst estimates by 1.3%. Earnings per share (EPS) missed analyst estimates by 14%. Over the last 3 years on average, earnings per share has fallen by 19% per year but the company’s share price has only fallen by 3% per year, which means it has not declined as severely as earnings. Announcement • Mar 30
Digital China Group Co., Ltd. Announces the Profit Distribution Proposal for 2021 On 29 March 2022 Digital China Group Co., Ltd. announced the profit distribution proposal for 2021 as Cash dividend of CNY 1.91000000 per 10 shares (tax included). Valuation Update With 7 Day Price Move • Jan 21
Investor sentiment improved over the past week After last week's 20% share price gain to CN¥18.86, the stock trades at a trailing P/E ratio of 44.2x. Average trailing P/E is 52x in the IT industry in China. Total returns to shareholders of 65% over the past three years. Reported Earnings • Oct 28
Third quarter 2021 earnings released: EPS CN¥0.27 (vs CN¥0.23 in 3Q 2020) The company reported a solid third quarter result with improved earnings and revenues, although profit margins were weaker. Third quarter 2021 results: Revenue: CN¥29.3b (up 27% from 3Q 2020). Net income: CN¥177.6m (up 18% from 3Q 2020). Profit margin: 0.6% (down from 0.7% in 3Q 2020). Over the last 3 years on average, earnings per share has fallen by 15% per year but the company’s share price has increased by 2% per year, which means it is well ahead of earnings. Reported Earnings • Aug 30
Second quarter 2021 earnings released: CN¥0.45 loss per share (vs CN¥0.19 profit in 2Q 2020) The company reported a mediocre second quarter result with weaker earnings and weaker control over costs, although revenues improved. Second quarter 2021 results: Revenue: CN¥32.7b (up 44% from 2Q 2020). Net loss: CN¥287.2m (down 329% from profit in 2Q 2020). Over the last 3 years on average, earnings per share has fallen by 11% per year but the company’s share price has increased by 6% per year, which means it is well ahead of earnings. Valuation Update With 7 Day Price Move • Jul 05
Investor sentiment improved over the past week After last week's 17% share price gain to CN¥23.03, the stock trades at a forward P/E ratio of 14x. Average forward P/E is 25x in the IT industry in China. Total returns to shareholders of 58% over the past three years. Reported Earnings • Apr 30
First quarter 2021 earnings released: EPS CN¥0.24 (vs CN¥0.18 in 1Q 2020) The company reported a solid first quarter result with improved earnings and revenues, although profit margins were weaker. First quarter 2021 results: Revenue: CN¥24.0b (up 34% from 1Q 2020). Net income: CN¥155.4m (up 32% from 1Q 2020). Profit margin: 0.6% (down from 0.7% in 1Q 2020). Reported Earnings • Apr 01
Full year 2020 earnings released: EPS CN¥0.96 (vs CN¥1.08 in FY 2019) The company reported a soft full year result with weaker earnings and profit margins, although revenues improved. Full year 2020 results: Revenue: CN¥92.1b (up 6.1% from FY 2019). Net income: CN¥624.1m (down 11% from FY 2019). Profit margin: 0.7% (down from 0.8% in FY 2019). The decrease in margin was driven by higher expenses. Is New 90 Day High Low • Mar 15
New 90-day low: CN¥16.61 The company is down 26% from a price of CN¥22.59 on 15 December 2020. Underperformed the Chinese market, which is flat over the last 90 days. Lagged the IT industry, which is down 15% over the same period. Announcement • Feb 24
Digital China Group Co., Ltd. to Report Fiscal Year 2020 Results on Mar 31, 2021 Digital China Group Co., Ltd. announced that they will report fiscal year 2020 results on Mar 31, 2021 Is New 90 Day High Low • Jan 25
New 90-day low: CN¥19.20 The company is down 27% from its price of CN¥26.48 on 27 October 2020. The Chinese market is up 12% over the last 90 days, indicating the company underperformed over that time. It also underperformed the IT industry, which is down 25% over the same period. According to the Simply Wall St valuation model, the estimated intrinsic value of the company is CN¥141 per share. Is New 90 Day High Low • Dec 14
New 90-day low: CN¥22.38 The company is down 7.0% from its price of CN¥24.16 on 14 September 2020. The Chinese market is up 2.0% over the last 90 days, indicating the company underperformed over that time. However, it outperformed the IT industry, which is down 17% over the same period. Valuation Update With 7 Day Price Move • Nov 18
Market pulls back on stock over the past week After last week's 24% share price decline to CN¥25.57, the stock is trading at a trailing P/E ratio of 28.4x, down from the previous P/E ratio of 37.3x. This compares to an average P/E of 72x in the IT industry in China. Total returns to shareholders over the past year are 47%. Announcement • Nov 11
Huawei Reportedly to Divest Honor Smartphone Business for $15 Billion to Chinese Consortium Huawei Technologies planned to divest its Honor budget smartphone business in a deal worth CNY 100 billion ($15.1 billion) to a consortium led by information technology services firm Digital China Group, according to a Reuters report on Tuesday. The all-cash sale will include almost all assets including brand, research and development capabilities, and supply chain management, according to the report, which cited people with knowledge of the matter. Huawei had no comment on the reported divestment. Valuation Update With 7 Day Price Move • Nov 10
Market bids up stock over the past week After last week's 18% share price gain to CN¥31.68, the stock is trading at a trailing P/E ratio of 35.1x, up from the previous P/E ratio of 29.8x. This compares to an average P/E of 80x in the IT industry in China. Total returns to shareholders over the past year are 111%. Is New 90 Day High Low • Nov 10
New 90-day high: CN¥31.68 The company is up 40% from its price of CN¥22.60 on 12 August 2020. The Chinese market is up 1.0% over the last 90 days, indicating the company outperformed over that time. It also outperformed the IT industry, which is down 6.0% over the same period. Valuation Update With 7 Day Price Move • Nov 06
Market bids up stock over the past week After last week's 15% share price gain to CN¥29.46, the stock is trading at a trailing P/E ratio of 32.7x, up from the previous P/E ratio of 28.4x. This compares to an average P/E of 77x in the IT industry in China. Total returns to shareholders over the past year are 87%. Reported Earnings • Nov 03
Third quarter 2020 earnings released: EPS CN¥0.23 The company reported a strong third quarter result with improved earnings, revenues and profit margins. Third quarter 2020 results: Revenue: CN¥23.1b (up 12% from 3Q 2019). Net income: CN¥149.9m (up 32% from 3Q 2019). Profit margin: 0.7% (up from 0.6% in 3Q 2019). The increase in margin was driven by higher revenue. Over the last 3 years on average, earnings per share has fallen by 1% per year but the company’s share price has increased by 8% per year, which means it is well ahead of earnings. Announcement • Oct 15
Huawei Reportedly in Talks to Sell Parts of Its Honor Smartphone Business Huawei Technologies Co., Ltd. is in talks with Digital China Group Co., Ltd. (SZSE:000034) and other suitors to sell parts of its Honor smartphone unit in a deal that could fetch up to CNY 25 billion ($3.7 billion), people with knowledge of the matter said. The assets to be sold have yet to be finalised but could include Honor’s brand, research & development capabilities and related supply chain management business, two of the people said. The deal may be an all-cash sale and could end up smaller, worth somewhere between CNY 15 billion and CNY 25 billion, one of the people said. Digital China has emerged as the frontrunner but other prospective buyers TCL Technology Group Corporation (SZSE:000100) and Xiaomi Corporation (SEHK:1810), the people said. The sources declined to be identified as the talks were confidential. Huawei and TCL declined to comment. Digital China and Xiaomi did not respond to requests for comment.