DB:4HB

Stock Analysis Report

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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. More Details


Snowflake Analysis

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

Stable Share Price: 4HB's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-6.5%

4HB

-3.8%

DE Energy Services

-6.9%

DE Market


1 Year Return

-70.7%

4HB

-54.8%

DE Energy Services

-7.4%

DE Market

Return vs Industry: 4HB underperformed the German Energy Services industry which returned -54.8% over the past year.

Return vs Market: 4HB underperformed the German Market which returned -7.4% over the past year.


Shareholder returns

4HBIndustryMarket
7 Day-6.5%-3.8%-6.9%
30 Day-9.4%-7.8%-7.8%
90 Day-38.3%-5.7%-4.9%
1 Year-70.7%-70.7%-54.0%-54.8%-4.4%-7.4%
3 Year-80.9%-80.9%-63.9%-66.8%-9.5%-17.5%
5 Year-78.0%-78.0%-64.8%-66.4%12.4%-3.7%

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 (€0.01) is trading below our estimate of fair value (€0.08)

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 (11.7x) compared to the XE Energy Services industry average (15.2x).

PE vs Market: 4HB is good value based on its PE Ratio (11.7x) compared to the German market (21.3x).


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 (0.2x) compared to the XE Energy Services industry average (0.5x).


Next Steps

Future Growth

How is Honghua Group forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

38.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 4HB's forecast earnings growth (38.3% per year) is above the savings rate (0.2%).

Earnings vs Market: 4HB's earnings (38.3% per year) are forecast to grow faster than the German market (26% per year).

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

Revenue vs Market: 4HB's revenue (6.2% per year) is forecast to grow faster than the German market (5.9% per year).

High Growth Revenue: 4HB's revenue (6.2% 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 (3.4%).


Next Steps

Past Performance

How has Honghua Group performed over the past 5 years?

45.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 4HB has a large one-off gain of CN¥96.5M impacting its June 30 2020 financial results.

Growing Profit Margin: 4HB's current net profit margins (1.9%) are lower than last year (5.3%).


Past Earnings Growth Analysis

Earnings Trend: 4HB has become profitable over the past 5 years, growing earnings by 45.3% per year.

Accelerating Growth: 4HB's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 4HB had negative earnings growth (-71%) over the past year, making it difficult to compare to the Energy Services industry average (-41.5%).


Return on Equity

High ROE: 4HB's Return on Equity (2.2%) is considered low.


Next Steps

Financial Health

How is Honghua Group's financial position?


Financial Position Analysis

Short Term Liabilities: 4HB's short term assets (CN¥6.7B) exceed its short term liabilities (CN¥5.3B).

Long Term Liabilities: 4HB's short term assets (CN¥6.7B) exceed its long term liabilities (CN¥2.4B).


Debt to Equity History and Analysis

Debt Level: 4HB's debt to equity ratio (106.3%) is considered high.

Reducing Debt: 4HB's debt to equity ratio has increased from 95.1% to 106.3% over the past 5 years.

Debt Coverage: 4HB's debt is not well covered by operating cash flow (1.8%).

Interest Coverage: 4HB's interest payments on its debt are not well covered by EBIT (1x coverage).


Balance Sheet


Next Steps

Dividend

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


Dividend Yield vs Market

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

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


Stability and Growth of Payments

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

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

3.8yrs

Average management tenure


CEO

Mi Zhang (63 yo)

no data

Tenure

CN¥1,990,000

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 ($USD295.76K) is below average for companies of similar size in the German market ($USD482.86K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Liliang Jin
Executive Chairman2.17yrsCN¥1.33mno data
Mi Zhang
Vice-Chairmanno dataCN¥1.99m0.099%
CN¥ 113.1k
Jie Ren
Senior VP & Executive Director12.75yrsCN¥1.19m0.030%
CN¥ 33.7k
Xiufang Xu
Chief Financial Officer3.58yrsno datano data
Xiaohong Di
Senior Administration Director2.08yrsno datano data
Wenmin Zhuang
Secretary of the Board4.75yrsno datano data
Chuan Xu
Human Resources Director3.83yrsno datano data
Mei Yi Lee
Joint Company Secretary5.25yrsno datano data

3.8yrs

Average Tenure

53yo

Average Age

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


Board Members

NamePositionTenureCompensationOwnership
Liliang Jin
Executive Chairman2.17yrsCN¥1.33mno data
Mi Zhang
Vice-Chairmanno dataCN¥1.99m0.099%
CN¥ 113.1k
Jie Ren
Senior VP & Executive Director12.75yrsCN¥1.19m0.030%
CN¥ 33.7k
Chiu Kwok Poon
Independent Non-Executive Director3.33yrsno datano data
Xiaofeng Liu
Independent Non-Executive Director12.75yrsCN¥212.00kno data
Bin Wei
Independent Non-Executive Director1.17yrsCN¥72.00kno data
Guoming Chen
Independent Non Executive Director12.75yrsCN¥106.00kno data
Qing Chang
Independent Non-Executive Director3.33yrsCN¥106.00kno data
Guangrong Han
Non-Executive Director3.58yrsno datano data
Wenle Chen
Non-Executive Director3.58yrsno datano data
Mei Su
Independent Non-Executive Director3.58yrsCN¥106.00k0.0029%
CN¥ 3.3k

3.6yrs

Average Tenure

57yo

Average Age

Experienced Board: 4HB's board of directors are considered experienced (3.6 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.


Top Shareholders

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$1.036b
  • Listing Market Cap: HK$113.737m
  • Shares outstanding: 5.23b
  • 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. It operates through Land Drilling Rigs; Pa ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/28 21:43
End of Day Share Price2020/10/28 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


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.