SEHK:1183

Stock Analysis Report

MECOM Power and Construction

Executive Summary

MECOM Power and Construction Limited, an investment holding company, operates as an integrated construction engineering contractor in Macau.


Snowflake Analysis

Flawless balance sheet with poor track record.

Share Price & News

How has MECOM Power and Construction's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 1183's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

11.9%

1183

-2.3%

HK Construction

-3.2%

HK Market


1 Year Return

21.8%

1183

-28.6%

HK Construction

-10.2%

HK Market

Return vs Industry: 1183 exceeded the Hong Kong Construction industry which returned -27.4% over the past year.

Return vs Market: 1183 exceeded the Hong Kong Market which returned -7.6% over the past year.


Shareholder returns

1183IndustryMarket
7 Day11.9%-2.3%-3.2%
30 Day14.4%-4.3%-3.3%
90 Day69.7%-5.9%0.2%
1 Year25.2%21.8%-25.1%-28.6%-6.9%-10.2%
3 Yearn/a-35.3%-42.3%11.7%0.4%
5 Yearn/a-27.7%-38.4%11.1%-7.3%

Price Volatility Vs. Market

How volatile is MECOM Power and Construction's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is MECOM Power and Construction undervalued compared to its fair value and its price relative to the market?

48.01x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 1183 (HK$1.53) is trading above our estimate of fair value (HK$0.33)

Significantly Below Fair Value: 1183 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 1183 is poor value based on its PE Ratio (48.6x) compared to the Construction industry average (8.9x).

PE vs Market: 1183 is poor value based on its PE Ratio (48.6x) compared to the Hong Kong market (10.1x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 1183's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 1183 is overvalued based on its PB Ratio (4.6x) compared to the HK Construction industry average (1x).


Next Steps

Future Growth

How is MECOM Power and Construction forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

10.9%

Forecasted Capital Goods 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 MECOM Power and Construction 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 MECOM Power and Construction performed over the past 5 years?

-12.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1183 has a high level of non-cash earnings.

Growing Profit Margin: 1183's current net profit margins (10.5%) are higher than last year (9.2%).


Past Earnings Growth Analysis

Earnings Trend: 1183's earnings have declined by -12.6% per year over the past 5 years.

Accelerating Growth: 1183's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 1183 had negative earnings growth (-42%) over the past year, making it difficult to compare to the Construction industry average (-5.4%).


Return on Equity

High ROE: 1183's Return on Equity (9.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is MECOM Power and Construction's financial position?


Financial Position Analysis

Short Term Liabilities: 1183's short term assets (MOP482.1M) exceed its short term liabilities (MOP133.6M).

Long Term Liabilities: 1183 has no long term liabilities.


Debt to Equity History and Analysis

Debt Level: 1183 is debt free.

Reducing Debt: 1183 had no debt 5 years ago.

Debt Coverage: 1183 has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: 1183 has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 1183 has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if 1183's debt is covered by short term assets.


Next Steps

Dividend

What is MECOM Power and Construction's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

company0%marketbottom25%2.3%markettop25%6.4%industryaverage4.6%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate 1183's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate 1183's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if 1183's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if 1183's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: 1183 is not paying a notable dividend for the Hong Kong market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 1183's dividend in 3 years as they are not forecast to pay a notable one for the Hong Kong market.


Next Steps

Management

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

2.1yrs

Average board tenure


CEO

Sotto Tou (51yo)

MO$4,201,000

Compensation

Mr. Sou Kun Tou, also known as Sotto, serves as an Executive Director, Deputy Chairman of the Board and Chief Executive Officer of the MECOM Power and Construction Limited. Mr. Sou is responsible for the d ...


CEO Compensation Analysis

Compensation vs Market: Sotto's total compensation ($USD523.72K) is above average for companies of similar size in the Hong Kong market ($USD290.18K).

Compensation vs Earnings: Sotto's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Board Members

NamePositionTenureCompensationOwnership
Lam Kuok
Chairman0yrsMO$4.20mno data
Sou Tou
Deputy Chairman of the Board & CEO0yrsMO$4.20mno data
Kiu Cho Cheung
Independent Non-Executive Director2.1yrsMO$278.00kno data
Po Yi Chan
Independent Non-Executive Director2.1yrsMO$278.00kno data
Weng Lio
Independent Non-Executive Director0.2yrsno datano data

2.1yrs

Average Tenure

51yo

Average Age

Experienced Board: 1183's board of directors are not considered experienced ( 2.1 years average tenure), which suggests a new board.


Ownership

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


Insider Trading Volume

Insider Buying: 1183 insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 14.1%.


Top Shareholders

Company Information

MECOM Power and Construction Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: MECOM Power and Construction Limited
  • Ticker: 1183
  • Exchange: SEHK
  • Founded: 2000
  • Industry: Construction and Engineering
  • Sector: Capital Goods
  • Market Cap: HK$1.832b
  • Shares outstanding: 1.20b
  • Website: https://www.mecommacau.com

Number of Employees


Location

  • MECOM Power and Construction Limited
  • Praça Kin Heng Long-Heng Hoi Kuok
  • Units Q, R and S, 6th Floor
  • Macau
  • Macau

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1183SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDFeb 2018

Biography

MECOM Power and Construction Limited, an investment holding company, operates as an integrated construction engineering contractor in Macau. It provides steel structure erection services, including structural steelworks construction, concreting and builder works, and combination of various other services; civil engineering construction services, such as demolition, ground field investigation, site formation, and foundation works, as well as substructures and superstructures, roads, and drainage works; and fitting out and renovation works comprising alteration, renovation, and upgrading works. The company also undertakes high voltage power substation construction and its system installation works, including planning, scheduling, project management, and construction of customized high voltage substations and power transmission infrastructure with installation of high voltage power systems. In addition, it offers facilities operation and maintenance management, alteration, upgrading, maintenance, and emergency repair of various buildings, properties, and their components, as well as high voltage power substations and related systems. The company was founded in 2000 and is headquartered in Macau. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/25 13:23
End of Day Share Price2020/02/25 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.