Zhejiang Dahua Technology (XSEC:002236) - Share price, News & Analysis

Q: What is the Fair Price of 2236 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

002236 (CN¥15.03) is trading below our estimate of [[fair value]] (CN¥51.42)

2236 fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	2/6
Past Performance	1/6
Financial Health	5/6
Dividends	3/6

2236 Stock Overview

Zhejiang Dahua Technology Co., Ltd. operates in the security video surveillance industry worldwide.

Rewards

Trading at 70.8% below our estimate of its fair value

Earnings are forecast to grow 21.53% per year

Risk Analysis

High level of non-cash earnings

Dividend of 1.8% is not well covered by earnings

Zhejiang Dahua Technology Competitors

Westone Information Industry

SZSE:002268

CN¥36.4b

Universal Scientific Industrial (Shanghai)

SHSE:601231

CN¥39.9b

Zhejiang Supcon Technology

SHSE:688777

CN¥41.4b

Wuhan DR Laser TechnologyLtd

SZSE:300776

CN¥38.2b

Price History & Performance

Summary of all time highs, changes and price drops for Zhejiang Dahua Technology
Historical stock prices
Current Share Price	CN¥15.03
52 Week High	CN¥26.65
52 Week Low	CN¥14.21
Beta	1.04
1 Month Change	-4.15%
3 Month Change	-0.066%
1 Year Change	-28.60%
3 Year Change	5.99%
5 Year Change	-37.24%
Change since IPO	5.25%

Shareholder Returns

	2236	CN Electronic	CN Market
7D	1.5%	2.8%	-0.5%
1Y	-28.6%	-21.7%	-10.4%

Return vs Industry: 002236 underperformed the CN Electronic industry which returned -21.7% over the past year.

Return vs Market: 002236 underperformed the CN Market which returned -10.4% over the past year.

Price Volatility

Is 2236's price volatile compared to industry and market?
2236 volatility
2236 Average Weekly Movement	3.9%
Electronic Industry Average Movement	6.3%
Market Average Movement	6.1%
10% most volatile stocks in CN Market	9.2%
10% least volatile stocks in CN Market	3.9%

Stable Share Price: 002236 is less volatile than 75% of CN stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: 002236's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2002	22,864	Liquan Fu	https://www.dahuatech.com

Zhejiang Dahua Technology Co., Ltd. operates in the security video surveillance industry worldwide. The company offers network, high definition composite video interface (HDCVI), PTZ, and thermal cameras; network and HDCVI recorders; video intercoms, including kits, accessories, emergency phone terminals, and IP and analog products; and access control products, such as controllers, modules, turnstiles, accessories, AI, and time attendance solutions. It also provides alarms; traffic enforcement, entrance and exit, parking, mobile products/solutions, MPT, and related software and accessories; transmission solutions comprising PoE, ePoE, access, aggregation, and core switches, as well as related accessories and platforms; display and control solutions, including video management platform (VMP), decoders, splicing controllers, network keyboards, LCD monitors and video walls, LCD digital signage, LED displays, and interactive LCD displays; and video conferencing solutions.

Zhejiang Dahua Technology Fundamentals Summary

How do Zhejiang Dahua Technology's earnings and revenue compare to its market cap?
2236 fundamental statistics
Market Cap	CN¥45.01b
Earnings (TTM)	CN¥3.39b
Revenue (TTM)	CN¥33.57b

13.3x

P/E Ratio

1.3x

P/S Ratio

Is 2236 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
2236 income statement (TTM)
Revenue	CN¥33.57b
Cost of Revenue	CN¥20.65b
Gross Profit	CN¥12.92b
Other Expenses	CN¥9.54b
Earnings	CN¥3.39b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	1.13
Gross Margin	38.50%
Net Profit Margin	10.09%
Debt/Equity Ratio	18.8%

How did 2236 perform over the long term?

See historical performance and comparison

Dividends

1.8%

Current Dividend Yield

24%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 2236 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

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 2236?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 2236. This is calculated by dividing 2236's market cap by their current preferred multiple.
What is 2236's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥45.01b

2236 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	1.3x
Enterprise Value/EBITDA	11.1x
PEG Ratio	0.6x

Price to Earnings Ratio vs Peers

How does 2236's PE Ratio compare to its peers?

2236 PE Ratio vs Peers

The above table shows the PE ratio for 2236 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	78.1x
002268 Westone Information Industry	132.2x	n/a	CN¥36.4b
601231 Universal Scientific Industrial (Shanghai)	16.7x	11.0%	CN¥39.9b
688777 Zhejiang Supcon Technology	68.3x	26.6%	CN¥41.4b
300776 Wuhan DR Laser TechnologyLtd	95.3x	35.2%	CN¥38.2b
002236 Zhejiang Dahua Technology	13.3x	21.5%	CN¥45.0b

Price-To-Earnings vs Peers: 002236 is good value based on its Price-To-Earnings Ratio (13.3x) compared to the peer average (78.1x).

Price to Earnings Ratio vs Industry

How does 2236's PE Ratio compare vs other companies in the CN Electronic Industry?

Price-To-Earnings vs Industry: 002236 is good value based on its Price-To-Earnings Ratio (13.3x) compared to the CN Electronic industry average (37.8x)

Price to Earnings Ratio vs Fair Ratio

What is 2236'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.

2236 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	13.3x
Fair PE Ratio	31.5x

Price-To-Earnings vs Fair Ratio: 002236 is good value based on its Price-To-Earnings Ratio (13.3x) compared to the estimated Fair Price-To-Earnings Ratio (31.5x).

Share Price vs Fair Value

What is the Fair Price of 2236 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 002236 (CN¥15.03) is trading below our estimate of fair value (CN¥51.42)

Significantly Below Fair Value: 002236 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, but analysts are not within a statistically confident range of agreement.

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Future Growth

How is Zhejiang Dahua Technology 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

21.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 002236's forecast earnings growth (21.5% per year) is above the savings rate (3.2%).

Earnings vs Market: 002236's earnings (21.5% per year) are forecast to grow slower than the CN market (24.5% per year).

High Growth Earnings: 002236's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 002236's revenue (15.1% per year) is forecast to grow slower than the CN market (17.8% per year).

High Growth Revenue: 002236's revenue (15.1% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 002236's Return on Equity is forecast to be low in 3 years time (16.9%).

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Past Performance

How has Zhejiang Dahua Technology performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

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

13.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 002236 has a high level of non-cash earnings.

Growing Profit Margin: 002236's current net profit margins (10.1%) are lower than last year (14%).

Past Earnings Growth Analysis

Earnings Trend: 002236's earnings have grown by 13.3% per year over the past 5 years.

Accelerating Growth: 002236's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 002236 had negative earnings growth (-13.9%) over the past year, making it difficult to compare to the Electronic industry average (3.1%).

Return on Equity

High ROE: 002236's Return on Equity (13.9%) is considered low.

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Financial Health

How is Zhejiang Dahua Technology's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

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

Financial Position Analysis

Short Term Liabilities: 002236's short term assets (CN¥31.6B) exceed its short term liabilities (CN¥15.0B).

Long Term Liabilities: 002236's short term assets (CN¥31.6B) exceed its long term liabilities (CN¥2.7B).

Debt to Equity History and Analysis

Debt Level: 002236 has more cash than its total debt.

Reducing Debt: 002236's debt to equity ratio has reduced from 22.2% to 18.8% over the past 5 years.

Debt Coverage: 002236's debt is not well covered by operating cash flow (12.6%).

Interest Coverage: 002236 earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Zhejiang Dahua Technology 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

1.80%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 002236's dividend (1.8%) is higher than the bottom 25% of dividend payers in the CN market (0.47%).

High Dividend: 002236's dividend (1.8%) is low compared to the top 25% of dividend payers in the CN market (1.93%).

Stability and Growth of Payments

Stable Dividend: 002236's dividend payments have been volatile in the past 10 years.

Growing Dividend: 002236's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (23.6%), 002236's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: 002236 is paying a dividend but the company has no free cash flows.

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Management

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

2.5yrs

Average management tenure

CEO

Liquan Fu (55 yo)

no data

Tenure

CN¥892,700

Compensation

Mr. Liquan Fu serves as the Chairman and President of Zhejiang Dahua Technology Co., Ltd. and has been its Non-Independent Director since April 1, 2005. Mr. Fu previously served as President of Zhejiang D...

Leadership Team

Experienced Management: 002236's management team is considered experienced (2.5 years average tenure).

Board Members

Experienced Board: 002236's board of directors are considered experienced (8.2 years average tenure).

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	2022/08/06 00:00
End of Day Share Price	2022/08/05 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31