DB:TXW

Stock Analysis Report

Executive Summary

Texwinca Holdings Limited engages in the production, dyeing, and sale of knitted fabrics, yarns, and garments.

Rewards

Trading at 47.8% below its fair value

Earnings are forecast to grow 14.86% per year

Earnings grew by 6.9% over the past year

Risk Analysis

Dividend of 10.36% is not well covered by earnings

Highly volatile share price over past 3 months



Snowflake Analysis

Very undervalued with excellent balance sheet.

Share Price & News

How has Texwinca Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TXW's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-6.7%

TXW

0.9%

DE Luxury

0.3%

DE Market


1 Year Return

-41.2%

TXW

47.3%

DE Luxury

13.8%

DE Market

Return vs Industry: TXW underperformed the German Luxury industry which returned 51.5% over the past year.

Return vs Market: TXW underperformed the German Market which returned 17.1% over the past year.


Shareholder returns

TXWIndustryMarket
7 Day-6.7%0.9%0.3%
30 Day-8.5%7.7%1.3%
90 Day-6.7%13.3%5.2%
1 Year-33.3%-41.2%49.6%47.3%17.4%13.8%
3 Year-52.9%-66.6%105.8%95.2%15.9%5.7%
5 Year-54.1%-72.9%275.8%231.7%27.9%10.6%

Price Volatility Vs. Market

How volatile is Texwinca Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Texwinca Holdings undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TXW (€0.21) is trading below our estimate of fair value (€0.4)

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


Price To Earnings Ratio

PE vs Industry: TXW is good value based on its PE Ratio (7.8x) compared to the Luxury industry average (25.7x).

PE vs Market: TXW is good value based on its PE Ratio (7.8x) compared to the German market (20.6x).


Price to Earnings Growth Ratio

PEG Ratio: TXW is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: TXW is good value based on its PB Ratio (0.5x) compared to the DE Luxury industry average (1.8x).


Next Steps

Future Growth

How is Texwinca Holdings forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

14.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TXW's forecast earnings growth (14.9% per year) is above the savings rate (-0.4%).

Earnings vs Market: TXW's earnings (14.9% per year) are forecast to grow faster than the German market (13.2% per year).

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

Revenue vs Market: TXW's revenue (4.8% per year) is forecast to grow slower than the German market (4.9% per year).

High Growth Revenue: TXW's revenue (4.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if TXW's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Texwinca Holdings performed over the past 5 years?

-23.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TXW has high quality earnings.

Growing Profit Margin: TXW's current net profit margins (4.2%) are higher than last year (3.6%).


Past Earnings Growth Analysis

Earnings Trend: TXW's earnings have declined by -23.6% per year over the past 5 years.

Accelerating Growth: TXW's earnings growth over the past year (6.9%) exceeds its 5-year average (-23.6% per year).

Earnings vs Industry: TXW earnings growth over the past year (6.9%) exceeded the Luxury industry -0.9%.


Return on Equity

High ROE: TXW's Return on Equity (6.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Texwinca Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: TXW's short term assets (HK$6.4B) exceed its short term liabilities (HK$3.5B).

Long Term Liabilities: TXW's short term assets (HK$6.4B) exceed its long term liabilities (HK$493.4M).


Debt to Equity History and Analysis

Debt Level: TXW's debt to equity ratio (26.2%) is considered satisfactory.

Reducing Debt: TXW's debt to equity ratio has increased from 24.7% to 26.2% over the past 5 years.

Debt Coverage: TXW's debt is well covered by operating cash flow (55.2%).

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


Balance Sheet

Inventory Level: TXW has a high level of physical assets or inventory.

Debt Coverage by Assets: TXW's debt is covered by short term assets (assets are 4.7x debt).


Next Steps

Dividend

What is Texwinca Holdings's current dividend yield, its reliability and sustainability?

10.93%

Current Dividend Yield


Dividend Yield vs Market

company10.9%marketbottom25%1.3%markettop25%3.6%industryaverage1.2%forecastin3Years13.3%

Current dividend yield vs market & industry

Notable Dividend: TXW's dividend (10.36%) is higher than the bottom 25% of dividend payers in the German market (1.38%).

High Dividend: TXW's dividend (10.36%) is in the top 25% of dividend payers in the German market (3.53%)


Stability and Growth of Payments

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

Growing Dividend: TXW's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (101.1%), TXW's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TXW's dividends in 3 years are forecast to be covered by earnings (75.4% payout ratio).


Next Steps

Management

What is the CEO of Texwinca Holdings's salary, the management and board of directors tenure and is there insider trading?

16.6yrs

Average board tenure


CEO

Kit Chung Ting (64yo)

6.6yrs

Tenure

HK$15,733,000

Compensation

Mr. Ting Kit Chung has been the Chief Executive Officer of Texwinca Holdings Ltd. since June 17, 2013 and serves as its Head of Financial Management and General Administration. Mr. Ting is responsible for  ...


CEO Compensation Analysis

Compensation vs Market: Kit Chung's total compensation ($USD2.02M) is above average for companies of similar size in the German market ($USD817.80K).

Compensation vs Earnings: Kit Chung's compensation has been consistent with company performance over the past year.


Board Age and Tenure

16.6yrs

Average Tenure

67yo

Average Age

Experienced Board: TXW's board of directors are seasoned and experienced ( 16.6 years average tenure).


Insider Trading

Insider Buying: TXW insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Buy€23,92706 Dec 19
Bun Chak Poon
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares100,000
Max Price€0.24
Buy€51,50820 Nov 19
Bun Chak Poon
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares200,000
Max Price€0.26
Buy€23,22218 Nov 19
Bun Chak Poon
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares94,000
Max Price€0.25
Buy€50,67514 Nov 19
Bun Chak Poon
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares200,000
Max Price€0.25
Buy€23,20408 Nov 19
Bun Chak Poon
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares100,000
Max Price€0.23
Buy€264,40408 Nov 19
Bun Chak Poon
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares1,094,000
Max Price€0.24
Buy€5,48108 Nov 19
Bun Chak Poon
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares24,000
Max Price€0.23
Sell€84,88606 Aug 19
Edgbaston Investment Partners LLP
EntityCompany
Shares356,000
Max Price€0.24
Buy€53,57905 Aug 19
Bun Chak Poon
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares200,000
Max Price€0.27
Buy€3,84719 Jul 19
Bun Chak Poon
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares14,000
Max Price€0.27
Buy€112,03710 Jul 19
Bun Chak Poon
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares400,000
Max Price€0.28
Buy€53,78928 Jun 19
Bun Chak Poon
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares200,000
Max Price€0.27
Buy€26,96127 Jun 19
Bun Chak Poon
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares100,000
Max Price€0.27
Buy€53527 Jun 19
Bun Chak Poon
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares2,000
Max Price€0.27
Buy€70,01024 Jun 19
Bun Chak Poon
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares260,000
Max Price€0.27

Ownership Breakdown

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


Management Team

  • Edward Chan (57yo)

    Financial Controller & Company Secretary

    • Bun Chak Poon (71yo)

      Executive Chairman

      • Tenure: 6.6yrs
      • Compensation: HK$34.27m
    • Kit Chung Ting (64yo)

      CEO, Head of Financial Management

      • Tenure: 6.6yrs
      • Compensation: HK$15.73m
    • Ho Tak Poon (42yo)

      Executive Director

      • Tenure: 2.3yrs
      • Compensation: HK$6.64m

    Board Members

    • Shu Wing Cheng (70yo)

      Independent Non-Executive Director

      • Tenure: 27.5yrs
      • Compensation: HK$485.00k
    • Son Yiu Au (73yo)

      Independent Non-Executive Director

      • Tenure: 24.5yrs
      • Compensation: HK$485.00k
    • Bun Chak Poon (71yo)

      Executive Chairman

      • Tenure: 6.6yrs
      • Compensation: HK$34.27m
    • Kit Chung Ting (64yo)

      CEO, Head of Financial Management

      • Tenure: 6.6yrs
      • Compensation: HK$15.73m
    • Brian Law (62yo)

      Independent Non-Executive Director

      • Tenure: 8.8yrs
      • Compensation: HK$485.00k
    • Ho Tak Poon (42yo)

      Executive Director

      • Tenure: 2.3yrs
      • Compensation: HK$6.64m

    Company Information

    Texwinca Holdings Limited's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Texwinca Holdings Limited
    • Ticker: TXW
    • Exchange: DB
    • Founded: 1975
    • Industry: Textiles
    • Sector: Consumer Durables
    • Market Cap: HK$2.529b
    • Listing Market Cap: HK$295.054m
    • Shares outstanding: 1.38b
    • Website: https://www.texwinca.com

    Number of Employees


    Location

    • Texwinca Holdings Limited
    • Metroplaza
    • Tower II
    • Kwai Chung
    • New Territories
    • Hong Kong

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    TXWH.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDSep 1992
    321SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDSep 1992
    TXWDB (Deutsche Boerse AG)YesOrdinary SharesDEEURSep 1992
    321SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDSep 1992
    321SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDSep 1992

    Biography

    Texwinca Holdings Limited engages in the production, dyeing, and sale of knitted fabrics, yarns, and garments. The company offers finished knitted fabric products in single knit, double knit, velour and polar fleece, jacquard, spandex, stripe, and flat knit areas. It also provides dyed yarn products, such as ramie/cotton, rayon/cotton, acrylic/cotton, and polyester/cotton blend yarn dyed products, as well as cotton yarn dyed products. In addition, the company retails and distributes casual apparel and accessories; and offers franchise services. Further, it is involved in the property holding and sub-letting activities; holding of trademarks; procurement of raw materials; provision of management services; and investing in properties. The company sells its products primarily in the United States, Mainland China, Japan, Hong Kong, and internationally. Texwinca Holdings Limited was founded in 1975 and is headquartered in Kwai Chung, Hong Kong. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/26 21:39
    End of Day Share Price2020/01/24 00:00
    Earnings2019/09/30
    Annual Earnings2019/03/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.