Hebei Yichen Industrial Group SEHK:1596 Stock Report

Hebei Yichen Industrial Group Corporation Limited Announces That Ms. Gu Xiaohui Has Resigned as A Non-Executive Director

Hebei Yichen Industrial Group Corporation Limited announced that Ms. Gu Xiaohui has resigned as a non-executive Director to devote more time to her other personal commitments. The resignation of Ms. Gu will come into effect from the date on which the proposed non- executive Director is elected and duly assumes her term of office. Ms. Gu will continue to perform her obligations as a non-executive Director prior to such date. Ms. Gu has confirmed that she has no disagreement with the Board and there is no matter relating to her resignation that needs to be brought to the attention of the shareholders of the Company The Stock Exchange of Hong Kong Limited.

Hebei Yichen Industrial Group Corporation Limited Elects Wang Fuju as an Independent Non-Executive Director, Chairman of the Nomination Committee of the Company, Member of Each of the Audit Committee and the Corporate Governance Committee of the Company

Upcoming dividend of CN¥0.055 per share

Eligible shareholders must have bought the stock before 06 June 2022. Payment date: 21 July 2022. Payout ratio is a comfortable 20% but the company is not cash flow positive. Trailing yield: 1.5%. Lower than top quartile of Hong Kong dividend payers (7.8%). Lower than average of industry peers (3.4%).

Full year 2021 earnings: EPS in line with analyst expectations despite revenue beat

Full year 2021 results: EPS: CN¥0.27 (down from CN¥0.28 in FY 2020). Revenue: CN¥1.36b (up 19% from FY 2020). Net income: CN¥246.1m (down 2.4% from FY 2020). Profit margin: 18% (down from 22% in FY 2020). The decrease in margin was driven by higher expenses. Revenue exceeded analyst estimates by 2.0%. Earnings per share (EPS) were mostly in line with analyst estimates. Over the last 3 years on average, earnings per share has increased by 16% per year but the company’s share price has remained flat, which means it is significantly lagging earnings.

Less than half of directors are independent

Following the recent departure of a director, there are only 2 independent directors on the board. The company's board is composed of: 2 independent directors. 6 non-independent directors. Independent Non-Executive Director Terence Jip was the last independent director to join the board, commencing their role in 2015. The company's minority of independent directors is a risk according to the Simply Wall St Risk Model.