SEHK:1559

Stock Analysis Report

Executive Summary

Kwan On Holdings Limited, an investment holding company, engages in the construction and maintenance works on civil engineering contracts in Hong Kong.


Snowflake Analysis

Adequate balance sheet and overvalued.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 1559's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

14.0%

1559

6.7%

HK Construction

5.3%

HK Market


1 Year Return

-66.4%

1559

-33.4%

HK Construction

-20.4%

HK Market

Return vs Industry: 1559 underperformed the Hong Kong Construction industry which returned -35.1% over the past year.

Return vs Market: 1559 underperformed the Hong Kong Market which returned -22.7% over the past year.


Shareholder returns

1559IndustryMarket
7 Day14.0%6.7%5.3%
30 Day-2.5%-8.3%-8.5%
90 Day-38.1%-15.7%-14.7%
1 Year-66.4%-66.4%-30.0%-33.4%-17.6%-20.4%
3 Year-88.0%-88.0%-45.3%-51.0%-2.5%-12.3%
5 Year-92.5%-92.5%-47.4%-55.1%-5.7%-20.9%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Kwan On Holdings undervalued compared to its fair value and its price relative to the market?

9.61x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: Insufficient data to calculate 1559's fair value to establish if it is undervalued.

Significantly Below Fair Value: Insufficient data to calculate 1559's fair value to establish if it is undervalued.


Price To Earnings Ratio

PE vs Industry: 1559 is poor value based on its PE Ratio (9.6x) compared to the Construction industry average (7.9x).

PE vs Market: 1559 is poor value based on its PE Ratio (9.6x) compared to the Hong Kong market (8.9x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 1559's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 1559 is good value based on its PB Ratio (0.5x) compared to the HK Construction industry average (0.9x).


Next Steps

Future Growth

How is Kwan On Holdings forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

10.8%

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 Kwan On Holdings 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 Kwan On Holdings performed over the past 5 years?

3.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1559 has a high level of non-cash earnings.

Growing Profit Margin: 1559's current net profit margins (3.1%) are lower than last year (5.6%).


Past Earnings Growth Analysis

Earnings Trend: 1559's earnings have grown by 3.5% per year over the past 5 years.

Accelerating Growth: 1559's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 1559 had negative earnings growth (-21.5%) over the past year, making it difficult to compare to the Construction industry average (-7.1%).


Return on Equity

High ROE: 1559's Return on Equity (5.2%) is considered low.


Next Steps

Financial Health

How is Kwan On Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 1559's short term assets (HK$782.5M) exceed its short term liabilities (HK$300.7M).

Long Term Liabilities: 1559's short term assets (HK$782.5M) exceed its long term liabilities (HK$84.7M).


Debt to Equity History and Analysis

Debt Level: 1559's debt to equity ratio (42.8%) is considered high.

Reducing Debt: 1559's debt to equity ratio has reduced from 236.2% to 42.8% over the past 5 years.

Debt Coverage: 1559's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: 1559's interest payments on its debt are well covered by EBIT (8.1x coverage).


Balance Sheet

Inventory Level: 1559 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 1559's debt is covered by short term assets (assets are 3.7x debt).


Next Steps

Dividend

What is Kwan On Holdings's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate 1559's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate 1559'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 1559's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if 1559's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 1559'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?

1.5yrs

Average management tenure


CEO

Zhang Fangbing (41yo)

0.17

Tenure

HK$960,000

Compensation

Mr. Zhang Fangbing serves as Chief Executive Officer at Kwan On Holdings Limited since January 15, 2020. He has been Compliance Officer and Executive Director at Kwan On Holdings Limited since June 1, 2017 ...


CEO Compensation Analysis

Compensation vs Market: Zhang's total compensation ($USD123.81K) is below average for companies of similar size in the Hong Kong market ($USD232.34K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Zhenghua Chen
Chairman2.67yrsno datano data
Zhang Fangbing
CEO, Compliance Officer & Executive Director0.17yrHK$960.00kno data
Wa Wong
Executive Director3.58yrsHK$600.00kno data
Lei Cao
Executive Director2yrsHK$360.00kno data
Kwok Wai Fung
CFO & Secretary1yrno datano data
Zhi Shen
Chief Operating Officer2yrsno datano data

1.5yrs

Average Tenure

49.5yo

Average Age

Experienced Management: 1559's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Zhenghua Chen
Chairman2.67yrsno datano data
Zhang Fangbing
CEO, Compliance Officer & Executive Director0.17yrHK$960.00kno data
Wa Wong
Executive Director3.58yrsHK$600.00kno data
Lei Cao
Executive Director2yrsHK$360.00kno data
Pak Sum Lum
Independent Non-Executive Director3.58yrsHK$150.00kno data
Sing Kwong Lam
Independent Non-Executive Director5yrsHK$150.00kno data
Zhenzhi Gong
Independent Non-Executive Director1.83yrsHK$56.00kno data

2.7yrs

Average Tenure

55yo

Average Age

Experienced Board: 1559's board of directors are not considered experienced ( 2.7 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: 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 been diluted in the past year, with total shares outstanding growing by 5.9%.


Top Shareholders

Company Information

Kwan On Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Kwan On Holdings Limited
  • Ticker: 1559
  • Exchange: SEHK
  • Founded: 1975
  • Industry: Construction and Engineering
  • Sector: Capital Goods
  • Market Cap: HK$257.400m
  • Shares outstanding: 1.32b
  • Website: https://www.kwanonconstruction.com

Number of Employees


Location

  • Kwan On Holdings Limited
  • 118 Connaught Road West
  • Unit 2801
  • Hong Kong
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1559SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDMar 2015

Biography

Kwan On Holdings Limited, an investment holding company, engages in the construction and maintenance works on civil engineering contracts in Hong Kong. The company undertakes works related to buildings, waterworks, site formation, roads, drainage, and slopes upgrading services. It is also involved in the provision of contracting work on civil plumbing, fire protection, insulation, concrete repair, and related activities; property holding activities; and construction site workmen services, as well as the trade of diesel. The company was founded in 1975 and is headquartered in Hong Kong, Hong Kong. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/31 14:28
End of Day Share Price2020/03/30 00:00
Earnings2019/09/30
Annual Earnings2019/03/31


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.