DB:4HB

Stock Analysis Report

Executive Summary

Honghua Group Limited, an investment holding company, engages in the research, design, manufacture, setting, and sale of land rigs, related parts, and components.

Snowflake

Fundamentals

Very undervalued with reasonable growth potential.


Similar Companies

Share Price & News

How has Honghua Group's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-2.0%

4HB

2.6%

DE Energy Services

2.4%

DE Market


1 Year Return

-9.3%

4HB

-27.9%

DE Energy Services

4.9%

DE Market

Return vs Industry: 4HB exceeded the German Energy Services industry which returned -27.9% over the past year.

Return vs Market: 4HB underperformed the German Market which returned 4.9% over the past year.


Shareholder returns

4HBIndustryMarket
7 Day-2.0%2.6%2.4%
30 Day-10.7%-5.6%2.3%
90 Day-22.8%-12.2%2.7%
1 Year-9.3%-9.3%-26.2%-27.9%8.2%4.9%
3 Year-46.2%-46.2%-30.4%-43.3%18.3%8.0%
5 Year-67.3%-67.3%-59.9%-81.8%44.2%24.6%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

Is Honghua Group 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: 4HB (€0.05) is trading below our estimate of fair value (€0.78)

Significantly Below Fair Value: 4HB is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 4HB is good value based on its PE Ratio (8.7x) compared to the Energy Services industry average (18.4x).

PE vs Market: 4HB is good value based on its PE Ratio (8.7x) compared to the German market (19.2x).


Price to Earnings Growth Ratio

PEG Ratio: 4HB is good value based on its PEG Ratio (0.3x)


Price to Book Ratio

PB vs Industry: 4HB is good value based on its PB Ratio (0.6x) compared to the XE Energy Services industry average (0.7x).


Next Steps

Future Growth

How is Honghua Group forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

26.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 4HB's forecast earnings growth (26.4% per year) is above the savings rate (0.2%).

Earnings vs Market: 4HB's earnings (26.4% per year) are forecast to grow faster than the German market (12.8% per year).

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

Revenue vs Market: 4HB's revenue (15.8% per year) is forecast to grow faster than the German market (5% per year).

High Growth Revenue: 4HB's revenue (15.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 4HB's Return on Equity is forecast to be low in 3 years time (8.2%).


Next Steps

Past Performance

How has Honghua Group performed over the past 5 years?

-7.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: 4HB's earnings have declined by -7.9% per year over the past 5 years.

Accelerating Growth: 4HB has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: 4HB has become profitable in the last year, making it difficult to compare its past year earnings growth to the Energy Services industry (43.2%).


Return on Equity

High ROE: 4HB's Return on Equity (6.6%) is considered low.


Return on Assets

ROA vs Industry: 4HB's Return on Assets is below or equal to the Energy Services industry average last year.


Return on Capital Employed

ROCE Improving: 4HB's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Honghua Group's financial position?


Financial Position Analysis

Short Term Liabilities: 4HB's short term assets (CN¥6.3B) exceeds its short term liabilities (CN¥6.0B)

Long Term Liabilities: 4HB's short term assets (6.3B) exceeds its long term liabilities (801.8M)


Debt to Equity History and Analysis

Debt Level: 4HB's debt to equity ratio (84.5%) is considered high

Reducing Debt: 4HB's debt to equity ratio has reduced from 99% to 84.5% over the past 5 years.

Debt Coverage: 4HB's debt is not well covered by operating cash flow (4.8%).

Interest Coverage: 4HB's interest payments on its debt are well covered by EBIT (3.3x coverage).


Balance Sheet

Inventory Level: 4HB has a high level of physical assets or inventory.

Debt Coverage by Assets: 4HB's debt is covered by short term assets (assets are 1.701850x debt).


Next Steps

Dividend

What is Honghua Group's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

company0%marketbottom25%1.5%markettop25%3.8%industryaverage4.3%forecastin3Years0%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: Unable to evaluate 4HB's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate 4HB's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.

Stable Dividend: Insufficient data to determine if 4HB's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if 4HB's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: 4HB is not paying a notable dividend for the German market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 4HB's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

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

3.8yrs

Average management tenure


CEO

Mi Zhang (62yo)

0yrs

Tenure

CN¥1,817,000

Compensation

Mr. Mi Zhang serves as the President of Honghua Group Limited and has been its Executive Director since June 2007. Mr. Zhang is responsible for the development of the ZJ70LC drilling rig, which was one of  ...


CEO Compensation Analysis

Compensation vs. Market: Mi's total compensation ($USD256.79K) is about average for companies of similar size in the German market ($USD810.60K).

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


Management Age and Tenure

3.8yrs

Average Tenure

51.5yo

Average Age

Experienced Management: 4HB's management team is considered experienced (3.8 years average tenure).


Board Age and Tenure

2.6yrs

Average Tenure

54yo

Average Age

Experienced Board: 4HB's board of directors are not considered experienced ( 2.6 years average tenure), which suggests a new board.


Insider Trading

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


Recent Insider Transactions

SellCN¥87,16610 Apr 19
Mowbray Worldwide Limited
EntityCompany
Shares1,000,000
Max PriceCN¥0.087
SellCN¥85,49710 Apr 19
Mowbray Worldwide Limited
EntityCompany
Shares1,000,000
Max PriceCN¥0.085
SellCN¥84,04209 Apr 19
Mowbray Worldwide Limited
EntityCompany
Shares1,000,000
Max PriceCN¥0.084

Ownership Breakdown


Management Team

  • Mi Zhang (62yo)

    Vice-Chairman

    • Tenure: 0yrs
    • Compensation: CN¥1.82m
  • Jie Ren (52yo)

    Senior VP & Executive Director

    • Tenure: 11.8yrs
    • Compensation: CN¥1.42m
  • Mei Yi Lee (51yo)

    Joint Company Secretary

    • Tenure: 4.3yrs
  • Hai Yuan (41yo)

    Financial Controller

    • Tenure: 4.6yrs
  • Xiufang Xu (47yo)

    Chief Financial Officer

    • Tenure: 2.6yrs
  • Chuan Xu (53yo)

    Human Resources Director

    • Tenure: 2.8yrs
  • Liliang Jin (52yo)

    Chairman

    • Tenure: 1.2yrs
    • Compensation: CN¥818.00k
  • Wenmin Zhuang (38yo)

    Joint Company Secretary and President of Legal & Securities Department

    • Tenure: 3.8yrs
  • Xiaohong Di

    Senior Administration Director

    • Tenure: 1.1yrs

Board Members

  • Chiu Kwok Poon (57yo)

    Independent Non-Executive Director

    • Tenure: 2.3yrs
  • Xiaofeng Liu (56yo)

    Independent Non-Executive Director

    • Tenure: 11.8yrs
    • Compensation: CN¥211.00k
  • Bin Wei (50yo)

    Independent Non-Executive Director

    • Tenure: 0.2yrs
  • Mi Zhang (62yo)

    Vice-Chairman

    • Tenure: 0yrs
    • Compensation: CN¥1.82m
  • Jie Ren (52yo)

    Senior VP & Executive Director

    • Tenure: 11.8yrs
    • Compensation: CN¥1.42m
  • Guoming Chen (56yo)

    Independent Non Executive Director

    • Tenure: 11.8yrs
    • Compensation: CN¥110.00k
  • Guangrong Han (57yo)

    Non-Executive Director

    • Tenure: 2.6yrs
  • Wenle Chen (39yo)

    Non-Executive Director

    • Tenure: 2.6yrs
  • Mei Su (50yo)

    Independent Non-Executive Director

    • Tenure: 2.6yrs
    • Compensation: CN¥110.00k
  • Liliang Jin (52yo)

    Chairman

    • Tenure: 1.2yrs
    • Compensation: CN¥818.00k

Company Information

Honghua Group Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Honghua Group Limited
  • Ticker: 4HB
  • Exchange: DB
  • Founded: 1997
  • Industry: Oil and Gas Equipment and Services
  • Sector: Energy
  • Market Cap: HK$2.540b
  • Listing Market Cap: HK$290.650m
  • Shares outstanding: 5.18b
  • Website: https://www.hh-gltd.com

Number of Employees


Location

  • Honghua Group Limited
  • Information Park
  • 99 East Road
  • Chengdu
  • Sichuan Province
  • 610036
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
196SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDMar 2008
4HBDB (Deutsche Boerse AG)YesOrdinary SharesDEEURMar 2008
HGHU.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMar 2008

Biography

Honghua Group Limited, an investment holding company, engages in the research, design, manufacture, setting, and sale of land rigs, related parts, and components. The company also provides technical suppor ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/21 21:02
End of Day Share Price2019/10/21 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.