SEHK:1615

Stock Analysis Report

Executive Summary

AB Builders Group Limited, an investment holding company, operates as a construction contractor in Macau.

Rewards

PE ratio (6.9x) is below the Hong Kong market (10.5x)

Risk Analysis

Earnings have declined by -21.32% per year over past 5 years

High level of non-cash earnings

Unstable dividend track record

Profit margins (7.8%) are lower than last year (15.9%)

+ 2 more risks


Snowflake Analysis

Flawless balance sheet and fair value.

Share Price & News

How has AB Builders Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 1615 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.6%

1615

0.4%

HK Construction

1.5%

HK Market


1 Year Return

-13.4%

1615

-15.9%

HK Construction

5.9%

HK Market

Return vs Industry: 1615 exceeded the Hong Kong Construction industry which returned -16.2% over the past year.

Return vs Market: 1615 underperformed the Hong Kong Market which returned 6.4% over the past year.


Shareholder returns

1615IndustryMarket
7 Day3.6%0.4%1.5%
30 Day-4.9%-0.04%4.2%
90 Day-12.1%2.3%8.7%
1 Year-10.7%-13.4%-11.8%-15.9%9.8%5.9%
3 Yearn/a-26.9%-34.9%27.7%14.7%
5 Yearn/a-20.4%-32.2%21.4%1.2%

Price Volatility Vs. Market

How volatile is AB Builders Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is AB Builders Group undervalued compared to its fair value and its price relative to the market?

6.9x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 1615 (HK$0.29) is trading above our estimate of fair value (HK$0.14)

Significantly Below Fair Value: 1615 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 1615 is good value based on its PE Ratio (6.9x) compared to the Construction industry average (9.9x).

PE vs Market: 1615 is good value based on its PE Ratio (6.9x) compared to the Hong Kong market (10.5x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 1615's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 1615 is good value based on its PB Ratio (0.7x) compared to the HK Construction industry average (1x).


Next Steps

Future Growth

How is AB Builders Group forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

12.1%

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 AB Builders Group 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 AB Builders Group performed over the past 5 years?

-21.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1615 has a high level of non-cash earnings.

Growing Profit Margin: 1615's current net profit margins (7.8%) are lower than last year (15.9%).


Past Earnings Growth Analysis

Earnings Trend: 1615's earnings have declined by -21.3% per year over the past 5 years.

Accelerating Growth: 1615's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 1615 had negative earnings growth (-31%) over the past year, making it difficult to compare to the Construction industry average (-12.3%).


Return on Equity

High ROE: 1615's Return on Equity (9.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is AB Builders Group's financial position?


Financial Position Analysis

Short Term Liabilities: 1615's short term assets (MOP329.5M) exceed its short term liabilities (MOP126.3M).

Long Term Liabilities: 1615 has no long term liabilities.


Debt to Equity History and Analysis

Debt Level: 1615 is debt free.

Reducing Debt: 1615 had no debt 5 years ago.

Debt Coverage: 1615 has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: 1615 has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 1615 has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if 1615's debt is covered by short term assets.


Next Steps

Dividend

What is AB Builders Group's current dividend yield, its reliability and sustainability?

3.45%

Current Dividend Yield


Dividend Yield vs Market

company3.4%marketbottom25%2.2%markettop25%6.0%industryaverage4.3%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: 1615's dividend (3.45%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.17%).

High Dividend: 1615's dividend (3.45%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.02%).


Stability and Growth of Payments

Stable Dividend: Too early to tell whether 1615's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if 1615's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (23.8%), 1615'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 AB Builders Group's salary, the management and board of directors tenure and is there insider trading?

2.8yrs

Average management tenure


CEO

Athena Lao (31yo)

1.4yrs

Tenure

0

Ms. Lao Chao U, also known as Athena, is Chief Executive Officer of AB Builders Group Limited and its Executive Director since August 17, 2018. She is responsible for the day-to-day operations of AB Builde ...


Management Age and Tenure

2.8yrs

Average Tenure

49yo

Average Age

Experienced Management: 1615's management team is considered experienced (2.8 years average tenure).


Board Age and Tenure

2.2yrs

Average Tenure

49.5yo

Average Age

Experienced Board: 1615's board of directors are not considered experienced ( 2.2 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.


Recent Insider Transactions

SellHK$22,199,93016 Apr 19
Chio Seng Lao
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares60,000,000
Max PriceHK$0.37
BuyHK$22,199,93016 Apr 19
Kin Wa Ip
EntityIndividual
Role
Member of the Board of Directors
Executive Director
Shares60,000,000
Max PriceHK$0.37

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 35.1%.


Management Team

  • Eugene Lai (49yo)

    Company Secretary

    • Tenure: 2.8yrs
  • Manson Pang (49yo)

    Financial Controller

    • Tenure: 4.2yrs
  • Chio Seng Lao (59yo)

    Chairman of the Board

    • Tenure: 1.4yrs
  • Athena Lao (31yo)

    CEO & Executive Director

    • Tenure: 1.4yrs
  • Vicki Lao (32yo)

    Executive Director

    • Tenure: 2.9yrs
  • Iek Wai Cheang (31yo)

    Executive Director

    • Tenure: 2.9yrs
  • Kin Wa Ip (52yo)

    Executive Director

    • Tenure: 2.9yrs

Board Members

  • Raymond Choy (70yo)

    Independent Non-Executive Director

    • Tenure: 1.4yrs
  • Terry Chu (47yo)

    Independent Non-Executive Director

    • Tenure: 1.4yrs
  • Chio Seng Lao (59yo)

    Chairman of the Board

    • Tenure: 1.4yrs
  • Athena Lao (31yo)

    CEO & Executive Director

    • Tenure: 1.4yrs
  • Vicki Lao (32yo)

    Executive Director

    • Tenure: 2.9yrs
  • Iek Wai Cheang (31yo)

    Executive Director

    • Tenure: 2.9yrs
  • Kin Wa Ip (52yo)

    Executive Director

    • Tenure: 2.9yrs
  • Wiley O’Yang (56yo)

    Independent Non-Executive Director

    • Tenure: 0.6yrs

Company Information

AB Builders Group Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: AB Builders Group Limited
  • Ticker: 1615
  • Exchange: SEHK
  • Founded: 1998
  • Industry: Construction and Engineering
  • Sector: Capital Goods
  • Market Cap: HK$174.000m
  • Shares outstanding: 600.00m
  • Website: https://www.abbuildersgroup.com

Number of Employees


Location

  • AB Builders Group Limited
  • Edf. Comercial I Tak
  • 10th Floor
  • Macau
  • Macau

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1615SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDSep 2018

Biography

AB Builders Group Limited, an investment holding company, operates as a construction contractor in Macau. The company provides structural works, including structure and superstructure works, such as foundation works, basement works, piling and pile cap works, and the construction of high-rise buildings; and fitting-out works. It serves hotel and casino owners, property developers, governments, and construction works contractors. The company was founded in 1998 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 Analysis2020/01/17 13:01
End of Day Share Price2020/01/16 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.