SEHK:2488

Stock Analysis Report

Executive Summary

Launch Tech Company Limited, together with its subsidiaries, provides products and services to the automotive aftermarket and the automobile industry in the People's Republic of China and internationally.


Snowflake Analysis

Flawless balance sheet with solid track record.

Share Price & News

How has Launch Tech's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 2488's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

52.3%

2488

2.8%

HK Auto Components

5.3%

HK Market


1 Year Return

-59.5%

2488

-39.4%

HK Auto Components

-20.4%

HK Market

Return vs Industry: 2488 underperformed the Hong Kong Auto Components industry which returned -38.8% over the past year.

Return vs Market: 2488 underperformed the Hong Kong Market which returned -22.7% over the past year.


Shareholder returns

2488IndustryMarket
7 Day52.3%2.8%5.3%
30 Day21.1%-19.9%-8.5%
90 Day-27.9%-25.8%-14.7%
1 Year-58.8%-59.5%-37.3%-39.4%-17.6%-20.4%
3 Year-73.7%-75.6%-42.0%-46.3%-2.5%-12.3%
5 Year-78.6%-80.1%-14.0%-23.4%-5.7%-20.9%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Launch Tech undervalued compared to its fair value and its price relative to the market?

12.05x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 2488 (HK$2.3) is trading above our estimate of fair value (HK$0.85)

Significantly Below Fair Value: 2488 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 2488 is poor value based on its PE Ratio (12.1x) compared to the Auto Components industry average (11.4x).

PE vs Market: 2488 is poor value based on its PE Ratio (12.1x) compared to the Hong Kong market (8.9x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 2488's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 2488 is overvalued based on its PB Ratio (1x) compared to the HK Auto Components industry average (0.8x).


Next Steps

Future Growth

How is Launch Tech forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

8.7%

Forecasted Automobiles industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Launch Tech has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Launch Tech performed over the past 5 years?

52.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 2488 has high quality earnings.

Growing Profit Margin: 2488's current net profit margins (7.3%) are higher than last year (4.1%).


Past Earnings Growth Analysis

Earnings Trend: 2488 has become profitable over the past 5 years, growing earnings by 52.8% per year.

Accelerating Growth: 2488's earnings growth over the past year (106.6%) exceeds its 5-year average (52.8% per year).

Earnings vs Industry: 2488 earnings growth over the past year (106.6%) exceeded the Auto Components industry -22.1%.


Return on Equity

High ROE: 2488's Return on Equity (8.1%) is considered low.


Next Steps

Financial Health

How is Launch Tech's financial position?


Financial Position Analysis

Short Term Liabilities: 2488's short term assets (CN¥940.9M) exceed its short term liabilities (CN¥636.7M).

Long Term Liabilities: 2488's short term assets (CN¥940.9M) exceed its long term liabilities (CN¥18.7M).


Debt to Equity History and Analysis

Debt Level: 2488's debt to equity ratio (24.1%) is considered satisfactory.

Reducing Debt: 2488's debt to equity ratio has reduced from 81.2% to 24.1% over the past 5 years.


Balance Sheet

Inventory Level: 2488 has a high level of physical assets or inventory.

Debt Coverage by Assets: 2488's debt is covered by short term assets (assets are 4.1x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: 2488 is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: Insufficient data to determine if 2488 has enough cash runway if its free cash flow continues to grow or shrink based on historical rates.


Next Steps

Dividend

What is Launch Tech's current dividend yield, its reliability and sustainability?

3.96%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 2488's dividend (3.96%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.63%).

High Dividend: 2488's dividend (3.96%) is low compared to the top 25% of dividend payers in the Hong Kong market (7.28%).


Stability and Growth of Payments

Stable Dividend: 2488's dividend payments have been volatile in the past 10 years.

Growing Dividend: 2488's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (47.7%), 2488's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

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

5.7yrs

Average board tenure


CEO

Charles Liu (50yo)

no data

Tenure

CN¥2,039,620

Compensation

Mr. Jun Liu, also known as Charles, serves as Executive Vice President of Lenovo Group Limited and has been its President of Lenovo China since June 8, 2017. Mr. Liu served as Executive Vice President and  ...


CEO Compensation Analysis

Compensation vs Market: Charles's total compensation ($USD287.32K) is about average for companies of similar size in the Hong Kong market ($USD232.34K).

Compensation vs Earnings: Charles's compensation has increased by more than 20% in the past year.


Board Members

NamePositionTenureCompensationOwnership
Xin Liu
Founder & Chairmanno dataCN¥2.06m18.32% CN¥172.7m
Jun Liu
Co-Founderno dataCN¥2.04mno data
Shiwen Jiang
Chief Information Officer & Executive Director9yrsCN¥716.80kno data
Zhao Huan Huang
Head of Domestic Marketing Centre & Executive Director9yrsCN¥513.13kno data
Yuan Liu
Independent Non-Executive Director10yrsCN¥50.00kno data
Yan Zhang
Independent Non-Executive Director5.67yrsCN¥50.00kno data
Zhiwei Lei
Supervisor1.67yrsno datano data
Bo Ning
Independent Non-Executive Director4.67yrsCN¥50.00kno data
Yi Yang
Supervisor3.67yrsno datano data
Hui Xia
Non-Executive Director1.67yrsCN¥50.00kno data

5.7yrs

Average Tenure

46.5yo

Average Age

Experienced Board: 2488's board of directors are considered experienced (5.7 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

Launch Tech Company Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Launch Tech Company Limited
  • Ticker: 2488
  • Exchange: SEHK
  • Founded: 1992
  • Industry: Auto Parts and Equipment
  • Sector: Automobiles
  • Market Cap: HK$942.232m
  • Shares outstanding: 432.22m
  • Website: https://www.cnlaunch.com

Number of Employees


Location

  • Launch Tech Company Limited
  • Launch Industrial Park
  • North of Wuhe Road
  • Shenzhen
  • Guangdong Province
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
2488SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares-Foreign ListedHKHKDOct 2002

Biography

Launch Tech Company Limited, together with its subsidiaries, provides products and services to the automotive aftermarket and the automobile industry in the People's Republic of China and internationally. It operates through three segments: Automotive Diagnosis, Lift, and Overseas Sales. The company is involved in the research and development, production, and sale of car diagnosis, testing, and maintenance equipment; development, production, and sale of automotive diagnosis, inspection, repair, and maintenance software; development, production, and sale of auto electronic products; and provision of information network services. It also develops, trades in, and sells computer software and hardware, and peripherals; provides consulting services of electronic products and technical; and provides health care management consultation and health care products development services. In addition, the company provides mobile phones and communication products; electronic products development and distribution; chip development and distribution; goods and technologies import and export, and agencies; computer software and hardware technology development, distribution, and sale; computer network projects; computer graphic design; corporate image planning; and Internet information consultation services. Further, it engages in the production of automobiles maintenance machines and equipment, and automobile warranty machines, such as automobile spray booths, tire balancers, tire changers, 4-wheel aligners, frame racks, and automobile testing lines; purchase and sale of computer software and hardware; and development and sale of computer software, information system software, and car sharing technology. The company was founded in 1992 and is based in Shenzhen, the People’s Republic of China. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/31 13:12
End of Day Share Price2020/03/31 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.