DB:3ND

Stock Analysis Report

NetDragon Websoft Holdings

Executive Summary

NetDragon Websoft Holdings Limited, an investment holding company, develops online and mobile games in the People’s Republic of China, the United States, and internationally.

Rewards

Trading at 18% below its fair value

Earnings are forecast to grow 11.53% per year

Earnings grew by 396.9% over the past year

Risk Analysis

No risks detected for 3ND from our risk checks.


Snowflake Analysis

Solid track record with excellent balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 3ND has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.9%

3ND

2.0%

DE Entertainment

-0.2%

DE Market


1 Year Return

50.9%

3ND

34.2%

DE Entertainment

13.7%

DE Market

Return vs Industry: 3ND exceeded the German Entertainment industry which returned 35.6% over the past year.

Return vs Market: 3ND exceeded the German Market which returned 14.4% over the past year.


Shareholder returns

3NDIndustryMarket
7 Day-2.9%2.0%-0.2%
30 Day10.0%-0.7%0.3%
90 Day24.5%7.3%3.7%
1 Year53.3%50.9%36.0%34.2%17.2%13.7%
3 Year2.9%-0.7%42.7%35.8%15.4%5.3%
5 Year89.3%79.2%116.7%99.5%21.3%4.7%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

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

18.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 3ND (€2.64) is trading below our estimate of fair value (€3.22)

Significantly Below Fair Value: 3ND is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: 3ND is good value based on its PE Ratio (14x) compared to the Entertainment industry average (44.6x).

PE vs Market: 3ND is good value based on its PE Ratio (14x) compared to the German market (20.7x).


Price to Earnings Growth Ratio

PEG Ratio: 3ND is poor value based on its PEG Ratio (1.2x)


Price to Book Ratio

PB vs Industry: 3ND is overvalued based on its PB Ratio (2x) compared to the DE Entertainment industry average (1.5x).


Next Steps

Future Growth

How is NetDragon Websoft Holdings forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

11.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 3ND's forecast earnings growth (11.5% per year) is above the savings rate (-0.4%).

Earnings vs Market: 3ND's earnings (11.5% per year) are forecast to grow slower than the German market (13.3% per year).

High Growth Earnings: 3ND's earnings are forecast to grow, but not significantly.

Revenue vs Market: 3ND's revenue (14.2% per year) is forecast to grow faster than the German market (5% per year).

High Growth Revenue: 3ND's revenue (14.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 3ND's Return on Equity is forecast to be low in 3 years time (12.9%).


Next Steps

Past Performance

How has NetDragon Websoft Holdings performed over the past 5 years?

47.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 3ND has high quality earnings.

Growing Profit Margin: 3ND's current net profit margins (14.6%) are higher than last year (3.4%).


Past Earnings Growth Analysis

Earnings Trend: 3ND's earnings have grown significantly by 47.1% per year over the past 5 years.

Accelerating Growth: 3ND's earnings growth over the past year (396.9%) exceeds its 5-year average (47.1% per year).

Earnings vs Industry: 3ND earnings growth over the past year (396.9%) exceeded the Entertainment industry 17.1%.


Return on Equity

High ROE: 3ND's Return on Equity (13.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is NetDragon Websoft Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 3ND's short term assets (CN¥3.9B) exceed its short term liabilities (CN¥1.9B).

Long Term Liabilities: 3ND's short term assets (CN¥3.9B) exceed its long term liabilities (CN¥666.8M).


Debt to Equity History and Analysis

Debt Level: 3ND's debt to equity ratio (9.4%) is considered satisfactory.

Reducing Debt: 3ND's debt to equity ratio has increased from 2.4% to 9.4% over the past 5 years.

Debt Coverage: 3ND's debt is well covered by operating cash flow (265%).

Interest Coverage: 3ND's interest payments on its debt are well covered by EBIT (1286x coverage).


Balance Sheet

Inventory Level: 3ND has a high level of physical assets or inventory.

Debt Coverage by Assets: 3ND's debt is covered by short term assets (assets are 8.2x debt).


Next Steps

Dividend

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

1.31%

Current Dividend Yield


Dividend Yield vs Market

company1.3%marketbottom25%1.3%markettop25%3.7%industryaverage1.2%forecastin3Years1.6%

Current dividend yield vs market & industry

Notable Dividend: 3ND's dividend (1.31%) isn’t notable compared to the bottom 25% of dividend payers in the German market (1.32%).

High Dividend: 3ND's dividend (1.31%) is low compared to the top 25% of dividend payers in the German market (3.63%).


Stability and Growth of Payments

Stable Dividend: 3ND's dividend payments have been volatile in the past 10 years.

Growing Dividend: 3ND's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (18.5%), 3ND's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 3ND's dividends in 3 years are forecast to be well covered by earnings (17% payout ratio).


Next Steps

Management

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

6.3yrs

Average management tenure


CEO

Luyuan Liu (46yo)

CN¥810,000

Compensation

Mr. Luyuan Liu serves as the Chief Executive Officer and Compliance Officer of NetDragon WebSoft, Inc. Mr. Liu is mainly responsible for the overall management of the Group. Mr. Liu is responsible for the  ...


CEO Compensation Analysis

Compensation vs Market: Luyuan's total compensation ($USD115.75K) is below average for companies of similar size in the German market ($USD1.51M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Dejian Liu
Founder & Executive Chairman0yrsCN¥803.00k36.49% CN¥518.0m
Luyuan Liu
CEO, Compliance Officer & Executive Director0yrsCN¥810.00k5.01% CN¥71.2m
Lim Leung
Vice Chairman4.7yrsCN¥17.53m0.11% CN¥1.6m
Hongzhan Chen
CTO, Senior VP & Executive Director0yrsCN¥729.00k2.12% CN¥30.0m
Hui Zheng
Executive Director & Senior VP0yrsCN¥502.00k6.51% CN¥92.4m
Kwok Yam
CFO & Senior VP6.3yrsno datano data
Maggie Zhou
Senior Director of Investor Relations0yrsno datano data
Lau Kin
Head of Compliance & Corporate Affairs6yrsno datano data
Chiachuan Lin
Chief Designer & VP0yrsno datano data
Biao Yu
Senior Vice President0yrsno datano data

6.3yrs

Average Tenure

48yo

Average Age

Experienced Management: 3ND's management team is seasoned and experienced (6.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Dejian Liu
Founder & Executive Chairman0yrsCN¥803.00k36.49% CN¥518.0m
Luyuan Liu
CEO, Compliance Officer & Executive Director0yrsCN¥810.00k5.01% CN¥71.2m
Lim Leung
Vice Chairman4.7yrsCN¥17.53m0.11% CN¥1.6m
Hongzhan Chen
CTO, Senior VP & Executive Director0yrsCN¥729.00k2.12% CN¥30.0m
Hui Zheng
Executive Director & Senior VP0yrsCN¥502.00k6.51% CN¥92.4m
Dongliang Lin
Non-Executive Director12.3yrsno datano data
Guowei Chao
Independent Non-Executive Director12.3yrsCN¥1.00mno data
Kwan Hung Lee
Independent Non-Executive Director12.3yrsCN¥1.00m0.042% CN¥602.1k
Saikeung Liu
Independent Non-Executive Director12.3yrsCN¥1.00mno data

12.3yrs

Average Tenure

50yo

Average Age

Experienced Board: 3ND's board of directors are seasoned and experienced ( 12.3 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.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

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


Key Information

  • Name: NetDragon Websoft Holdings Limited
  • Ticker: 3ND
  • Exchange: DB
  • Founded: 1999
  • Industry: Interactive Home Entertainment
  • Sector: Media
  • Market Cap: HK$11.910b
  • Listing Market Cap: HK$1.420b
  • Shares outstanding: 529.34m
  • Website: https://www.netdragon.com

Number of Employees


Location

  • NetDragon Websoft Holdings Limited
  • Building 851
  • 58 Hot Spring Branch Road
  • Fuzhou
  • Fujian Province
  • 350001
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
777SEHK (The Stock Exchange of Hong Kong Ltd.)YesCommon SharesHKHKDNov 2007
3NDDB (Deutsche Boerse AG)YesCommon SharesDEEURNov 2007
777SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesCommon SharesHKHKDNov 2007
777SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesCommon SharesHKHKDNov 2007

Biography

NetDragon Websoft Holdings Limited, an investment holding company, develops online and mobile games in the People’s Republic of China, the United States, and internationally. It engages in the games design, programming and graphics, and online and mobile games operation; mobile and Internet education services; and mobile solution, products, and marketing businesses. The company’s games for kids include JumpStart, School of Dragons, Neopets, World of Madagascar, and Math Blaster; and other games comprise Conquer Online, Way of the Five, and Adventure Navigation. It also licenses and services developed games; develops and provides products in augmented reality and computer vision with machine learning technology; sells education hardware and software products; and develops properties. The company was formerly known as NetDragon Websoft Inc. and changed its name to NetDragon Websoft Holdings Limited in June 2016. NetDragon Websoft Holdings Limited was founded in 1999 and is headquartered in Fuzhou, China. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/20 21:34
End of Day Share Price2020/02/20 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.