DB:KOU

Stock Analysis Report

KWG Group Holdings

Executive Summary

KWG Group Holdings Limited, an investment holding company, engages in the investment, development, management, and sale of real estate properties in the People’s Republic of China.

Rewards

Trading at 85.5% below its fair value

Revenue is forecast to grow 22.13% per year

Earnings grew by 143% over the past year

Risk Analysis

Earnings are forecast to decline by an average of -1.5% per year for the next 3 years

Debt is not well covered by operating cash flow

Unstable dividend track record

Large one-off items impacting financial results



Snowflake Analysis

Undervalued established dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

19.4%

KOU

9.8%

DE Real Estate

9.9%

DE Market


1 Year Return

15.0%

KOU

-17.0%

DE Real Estate

-17.5%

DE Market

Return vs Industry: KOU exceeded the German Real Estate industry which returned -19.9% over the past year.

Return vs Market: KOU exceeded the German Market which returned -17.7% over the past year.


Shareholder returns

KOUIndustryMarket
7 Day19.4%9.8%9.9%
30 Day-6.8%-15.7%-16.6%
90 Day0%-15.6%-24.8%
1 Year26.3%15.0%-14.7%-17.0%-15.0%-17.5%
3 Year150.0%83.3%26.7%17.0%-17.4%-24.5%
5 Year176.9%78.3%58.7%35.9%-16.6%-28.1%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

Is KWG Group 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: KOU (€1.23) is trading below our estimate of fair value (€8.46)

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


Price To Earnings Ratio

PE vs Industry: KOU is good value based on its PE Ratio (3.2x) compared to the Real Estate industry average (10.6x).

PE vs Market: KOU is good value based on its PE Ratio (3.2x) compared to the German market (16.4x).


Price to Earnings Growth Ratio

PEG Ratio: KOU's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: KOU is good value based on its PB Ratio (0.9x) compared to the DE Real Estate industry average (1.3x).


Next Steps

Future Growth

How is KWG Group Holdings forecast to perform in the next 1 to 3 years based on estimates from 16 analysts?

-1.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KOU's earnings are forecast to decline over the next 3 years (-1.5% per year).

Earnings vs Market: KOU's earnings are forecast to decline over the next 3 years (-1.5% per year).

High Growth Earnings: KOU's earnings are forecast to decline over the next 3 years.

Revenue vs Market: KOU's revenue (22.1% per year) is forecast to grow faster than the German market (4.1% per year).

High Growth Revenue: KOU's revenue (22.1% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: KOU's Return on Equity is forecast to be high in 3 years time (22%)


Next Steps

Past Performance

How has KWG Group Holdings performed over the past 5 years?

21.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: KOU has a large one-off gain of CN¥4.7B impacting its December 31 2019 financial results.

Growing Profit Margin: KOU's current net profit margins (39.3%) are lower than last year (54%).


Past Earnings Growth Analysis

Earnings Trend: KOU's earnings have grown significantly by 21.2% per year over the past 5 years.

Accelerating Growth: KOU's earnings growth over the past year (143%) exceeds its 5-year average (21.2% per year).

Earnings vs Industry: KOU earnings growth over the past year (143%) exceeded the Real Estate industry 9%.


Return on Equity

High ROE: Whilst KOU's Return on Equity (26.3%) is high, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is KWG Group Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: KOU's short term assets (CN¥129.7B) exceed its short term liabilities (CN¥109.7B).

Long Term Liabilities: KOU's short term assets (CN¥129.7B) exceed its long term liabilities (CN¥66.4B).


Debt to Equity History and Analysis

Debt Level: KOU's debt to equity ratio (223.8%) is considered high.

Reducing Debt: KOU's debt to equity ratio has increased from 124.8% to 223.8% over the past 5 years.

Debt Coverage: KOU's debt is not well covered by operating cash flow (3%).

Interest Coverage: KOU's interest payments on its debt are well covered by EBIT (8.8x coverage).


Balance Sheet

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

Debt Coverage by Assets: KOU's debt is covered by short term assets (assets are 1.5x debt).


Next Steps

Dividend

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

7.60%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: KOU's dividend (7.6%) is higher than the bottom 25% of dividend payers in the German market (1.7%).

High Dividend: KOU's dividend (7.6%) is in the top 25% of dividend payers in the German market (4.97%)


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (24%), KOU's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: KOU's dividends in 3 years are forecast to be covered by earnings (52.1% payout ratio).


Next Steps

Management

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

0.8yrs

Average management tenure


CEO

Jian Tao Kong (48yo)

no data

Tenure

CN¥4,910,000

Compensation

Jian Tao Kong is an Executive Director and the Chief Executive Officer of KWG Group Holdings Limited (formerly known as KWG Property Holdings Ltd). Mr. Kong has over 22 years of experience in property deve ...


CEO Compensation Analysis

Compensation vs Market: Jian Tao's total compensation ($USD691.67K) is below average for companies of similar size in the German market ($USD3.71M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Jian Min Kong
Chairman of the Boardno dataCN¥4.87m9.23% CN¥364.8m
Jian Tao Kong
CEO & Directorno dataCN¥4.91m0.066% CN¥2.6m
Jian Nan Kong
Executive VP & Directorno dataCN¥4.87m4.45% CN¥175.8m
Fengjia Cai
CEO of Real Estate Business & Executive Director1.5yrsCN¥2.82m0.0075% CN¥295.5k
Yanping Huang
Vice President of Finance Department0.58yrno datano data
Linda Wu
Director of Investor Relationsno datano datano data
Xiao Luo
Director of Legal Affairs Division & Assistant to the Chairmanno datano datano data
Huan Yang
General Manager of Sales Management Centre5yrsno datano data
Yan Long Jin
General Manager of Northern China District & Suzhou Real Estate Sectorno datano datano data
Qing Luo
General Manager of Construction Sector0.75yrno datano data

0.8yrs

Average Tenure

49yo

Average Age

Experienced Management: KOU's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Jian Min Kong
Chairman of the Boardno dataCN¥4.87m9.23% CN¥364.8m
Jian Tao Kong
CEO & Directorno dataCN¥4.91m0.066% CN¥2.6m
Jian Nan Kong
Executive VP & Directorno dataCN¥4.87m4.45% CN¥175.8m
Fengjia Cai
CEO of Real Estate Business & Executive Director1.5yrsCN¥2.82m0.0075% CN¥295.5k
Ka Sze Lee
Independent Non-Executive Director12.75yrsCN¥456.00k0.00094% CN¥37.1k
Chun Fai Tam
Independent Non-Executive Director12.75yrsCN¥456.00k0.00094% CN¥37.1k
Bin Hai Li
Independent Non-Executive Director7.67yrsCN¥456.00kno data

12.8yrs

Average Tenure

53yo

Average Age

Experienced Board: KOU's board of directors are seasoned and experienced ( 12.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: KOU insiders have only sold shares 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

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


Key Information

  • Name: KWG Group Holdings Limited
  • Ticker: KOU
  • Exchange: DB
  • Founded: 1995
  • Industry: Real Estate Development
  • Sector: Real Estate
  • Market Cap: HK$33.801b
  • Listing Market Cap: HK$3.951b
  • Shares outstanding: 3.18b
  • Website: https://www.kwgproperty.com

Number of Employees


Location

  • KWG Group Holdings Limited
  • International Finance Place
  • No. 8 Huaxia Road
  • Guangzhou
  • Guangdong Province
  • 510623
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1813SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJul 2007
KOUDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJul 2007
KWGP.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJul 2007
1813SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJul 2007
1813SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJul 2007

Biography

KWG Group Holdings Limited, an investment holding company, engages in the investment, development, management, and sale of real estate properties in the People’s Republic of China. The company operates through Property Development, Property Investment, Hotel Operation, and Property Management segments. Its properties portfolio include mid- to high-end residential properties, serviced apartments, villas, office buildings, hotels, and shopping malls. The company also engages in the operation of hotels; and provision of food and beverage sales and other ancillary services. The company was formerly known as KWG Property Holding Limited and changed its name to KWG Group Holdings Limited in August 2018. The company was founded in 1995 and is headquartered in Guangzhou, the People’s Republic of China. KWG Group Holdings Limited is a subsidiary of Plus Earn Consultants Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/30 21:32
End of Day Share Price2020/03/30 00:00
Earnings2019/12/31
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.