SEHK:1072

Stock Analysis Report

Executive Summary

Dongfang Electric Corporation Limited manufactures and sells hydro, thermal, nuclear, wind, gas, and solar power generating equipment in China and internationally.

Snowflake

Fundamentals

Undervalued with adequate balance sheet.


Similar Companies

Share Price & News

How has Dongfang Electric's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

0.7%

1072

-2.2%

HK Electrical

0.3%

HK Market


1 Year Return

11.2%

1072

-33.5%

HK Electrical

-1.5%

HK Market

Return vs Industry: 1072 exceeded the Hong Kong Electrical industry which returned -33.5% over the past year.

Return vs Market: 1072 exceeded the Hong Kong Market which returned -1.5% over the past year.


Shareholder returns

1072IndustryMarket
7 Day0.7%-2.2%0.3%
30 Day-3.0%-5.2%0.5%
90 Day-5.9%-12.6%-4.4%
1 Year14.1%11.2%-32.6%-33.5%2.1%-1.5%
3 Year-27.8%-29.6%-48.6%-50.5%14.7%3.2%
5 Year-65.6%-67.2%-43.5%-46.7%21.5%1.2%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Dongfang Electric undervalued compared to its fair value and its price relative to the market?

41.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 1072 (HK$4.47) is trading below our estimate of fair value (HK$7.64)

Significantly Below Fair Value: 1072 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 1072 is poor value based on its PE Ratio (9.1x) compared to the Electrical industry average (8.8x).

PE vs Market: 1072 is good value based on its PE Ratio (9.1x) compared to the Hong Kong market (10.4x).


Price to Earnings Growth Ratio

PEG Ratio: 1072 is good value based on its PEG Ratio (0.9x)


Price to Book Ratio

PB vs Industry: 1072 is good value based on its PB Ratio (0.4x) compared to the HK Electrical industry average (0.6x).


Next Steps

Future Growth

How is Dongfang Electric forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

10.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1072's forecast earnings growth (10.7% per year) is above the savings rate (2%).

Earnings vs Market: 1072's earnings (10.7% per year) are forecast to grow slower than the Hong Kong market (11.2% per year).

High Growth Earnings: 1072's earnings are forecast to grow, but not significantly.

Revenue vs Market: 1072's revenue (3% per year) is forecast to grow slower than the Hong Kong market (10.4% per year).

High Growth Revenue: 1072's revenue (3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 1072's Return on Equity is forecast to be low in 3 years time (5.8%).


Next Steps

Past Performance

How has Dongfang Electric performed over the past 5 years?

-1.5%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: 1072's earnings have declined by -1.5% per year over the past 5 years.

Accelerating Growth: 1072's earnings growth over the past year (19.7%) exceeds its 5-year average (-1.5% per year).

Earnings vs Industry: 1072 earnings growth over the past year (19.7%) exceeded the Electrical industry 8%.


Return on Equity

High ROE: 1072's Return on Equity (4.5%) is considered low.


Return on Assets

ROA vs Industry: 1072's Return on Assets is below or equal to the Electrical industry average last year.


Return on Capital Employed

ROCE Improving: 1072 is currently unprofitable, so its Return on Capital Employed is negative.


Next Steps

Financial Health

How is Dongfang Electric's financial position?


Financial Position Analysis

Short Term Liabilities: 1072's short term assets (CN¥66.4B) exceeds its short term liabilities (CN¥47.4B)

Long Term Liabilities: 1072's short term assets (66.4B) exceeds its long term liabilities (7.9B)


Debt to Equity History and Analysis

Debt Level: 1072's debt to equity ratio (2.3%) is considered satisfactory

Reducing Debt: 1072's debt to equity ratio has reduced from 15.9% to 2.3% over the past 5 years.

Debt Coverage: 1072's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: Insufficient data to determine if 1072's interest payments on its debt are well covered by EBIT.


Balance Sheet

Inventory Level: 1072 has a high level of physical assets or inventory.

Debt Coverage by Assets: 1072's debt is covered by short term assets (assets are 94.548820x debt).


Next Steps

Dividend

What is Dongfang Electric's current dividend yield, its reliability and sustainability?

2.73%

Current Dividend Yield


Dividend Yield vs Market

company2.7%marketbottom25%2.3%markettop25%6.3%industryaverage2.5%forecastin3Years3.6%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: 1072's dividend (2.73%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.28%).

High Dividend: 1072's dividend (2.73%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.25%).

Stable Dividend: 1072's dividend payments have been volatile in the past 10 years.

Growing Dividend: 1072's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (24.9%), 1072'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

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

1.6yrs

Average management tenure


CEO

Peigen Yu (57yo)

0.4yrs

Tenure

0

Mr. Peigen Yu has been President of Dongfang Electric Corp. Ltd. since May 8, 2019 and its Non-Independent Director since June 26, 2019. Mr. Yu successively served as a senior operator, shift chief-operato ...


Management Age and Tenure

1.6yrs

Average Tenure

56yo

Average Age

Experienced Management: 1072's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.


Board Age and Tenure

1.8yrs

Average Tenure

53.5yo

Average Age

Experienced Board: 1072's board of directors are not considered experienced ( 1.8 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.


Ownership Breakdown


Management Team

  • Shuiquan Xiao (68yo)

    Officer of Disciplinary Office of Dfew

    • Tenure: 0yrs
    • Compensation: CN¥109.00k
  • Dan Gong (56yo)

    Company Secretary

    • Tenure: 12yrs
  • Peigen Yu (57yo)

    President & Non Independent Director

    • Tenure: 0.4yrs
  • Zhiying Zhang (59yo)

    Executive Vice President

    • Tenure: 9.3yrs
  • Yong Bai (48yo)

    Chief Accountant & Non-Independent Director

    • Tenure: 0.8yrs
  • Peng Xu (54yo)

    Senior VP & Non Independent Director

    • Tenure: 1.8yrs
  • Yong Feng (52yo)

    Head of the Audit Department & Staff Representative Supervisor

    • Tenure: 0yrs

Board Members

  • Jilie Zhang (56yo)

    Chairman of Supervisory Committee

    • Tenure: 0.8yrs
  • Peigen Yu (57yo)

    President & Non Independent Director

    • Tenure: 0.4yrs
  • Lei Zou (53yo)

    Chairman

    • Tenure: 3yrs
  • Dengqing Liu (49yo)

    Independent Non-Executive Director

    • Tenure: 1.3yrs
  • Yong Bai (48yo)

    Chief Accountant & Non-Independent Director

    • Tenure: 0.8yrs
  • Peng Xu (54yo)

    Senior VP & Non Independent Director

    • Tenure: 1.8yrs
  • Dake Gu (65yo)

    Independent Non-Executive Director

    • Tenure: 4.3yrs
  • Haihe Xu (64yo)

    Independent Non-Executive Director

    • Tenure: 4.3yrs
  • Lei Zou (53yo)

    Chairman

    • Tenure: 3yrs
  • Yong Feng (52yo)

    Head of the Audit Department & Staff Representative Supervisor

    • Tenure: 0yrs

Company Information

Dongfang Electric Corporation Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Dongfang Electric Corporation Limited
  • Ticker: 1072
  • Exchange: SEHK
  • Founded: 1993
  • Industry: Heavy Electrical Equipment
  • Sector: Capital Goods
  • Market Cap: HK$29.725b
  • Shares outstanding: 3.09b
  • Website: https://www.dec-ltd.cn

Number of Employees


Location

  • Dongfang Electric Corporation Limited
  • No.333 Shuhan Road
  • Chengdu
  • Sichuan Province
  • 610036
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
DNGF.FOTCPK (Pink Sheets LLC)YesForeign Shares-Foreign ListedUSUSDJun 1994
1072SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares-Foreign ListedHKHKDJun 1994
DEUDB (Deutsche Boerse AG)YesForeign Shares-Foreign ListedDEEURJun 1994
1072SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDJun 1994
1072SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDJun 1994
600875SHSE (Shanghai Stock Exchange)Domestic SharesCNCNYJun 1996
600875XSSC (Shanghai Stock Exchange - Shanghai - Hong Kong Stock Connect)Domestic SharesCNCNYJun 1996

Biography

Dongfang Electric Corporation Limited manufactures and sells hydro, thermal, nuclear, wind, gas, and solar power generating equipment in China and internationally. It operates through five segments: Clean  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/22 12:39
End of Day Share Price2019/10/22 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.