SEHK:1637

Stock Analysis Report

Executive Summary

SH Group (Holdings) Limited, an investment holding company, provides electrical and mechanical (E&M) engineering services for public and private sectors in Hong Kong.

Rewards

PE ratio (4.9x) is below the Hong Kong market (10.2x)

Earnings grew by 59.2% over the past year

Risk Analysis

High level of non-cash earnings

Unstable dividend track record

Does not have a meaningful market cap (HK$164M)



Snowflake Analysis

Excellent balance sheet and fair value.

Share Price & News

How has SH Group (Holdings)'s share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 1637 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

1637

1.2%

HK Construction

0.6%

HK Market


1 Year Return

-18.0%

1637

-14.0%

HK Construction

-0.06%

HK Market

Return vs Industry: 1637 underperformed the Hong Kong Construction industry which returned -14% over the past year.

Return vs Market: 1637 underperformed the Hong Kong Market which returned -0.1% over the past year.


Shareholder returns

1637IndustryMarket
7 Day0%1.2%0.6%
30 Day-3.5%-2.4%-3.6%
90 Day-6.8%-2.9%-0.01%
1 Year-15.3%-18.0%-9.9%-14.0%3.5%-0.06%
3 Yearn/a-23.6%-31.9%19.5%7.4%
5 Yearn/a-21.5%-33.2%18.4%-1.4%

Price Volatility Vs. Market

How volatile is SH Group (Holdings)'s share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is SH Group (Holdings) undervalued compared to its fair value and its price relative to the market?

4.91x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 1637 (HK$0.41) is trading above our estimate of fair value (HK$0.18)

Significantly Below Fair Value: 1637 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 1637 is good value based on its PE Ratio (4.9x) compared to the Construction industry average (10.3x).

PE vs Market: 1637 is good value based on its PE Ratio (4.9x) compared to the Hong Kong market (10.2x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 1637's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 1637 is good value based on its PB Ratio (0.7x) compared to the HK Construction industry average (1.1x).


Next Steps

Future Growth

How is SH Group (Holdings) forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

11.7%

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 SH Group (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 SH Group (Holdings) performed over the past 5 years?

13.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1637 has a high level of non-cash earnings.

Growing Profit Margin: 1637's current net profit margins (6.1%) are lower than last year (6.2%).


Past Earnings Growth Analysis

Earnings Trend: 1637's earnings have grown by 13.6% per year over the past 5 years.

Accelerating Growth: 1637's earnings growth over the past year (59.2%) exceeds its 5-year average (13.6% per year).

Earnings vs Industry: 1637 earnings growth over the past year (59.2%) exceeded the Construction industry -12.4%.


Return on Equity

High ROE: 1637's Return on Equity (13.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is SH Group (Holdings)'s financial position?


Financial Position Analysis

Short Term Liabilities: 1637's short term assets (HK$353.3M) exceed its short term liabilities (HK$148.7M).

Long Term Liabilities: 1637's short term assets (HK$353.3M) exceed its long term liabilities (HK$5.4M).


Debt to Equity History and Analysis

Debt Level: 1637's debt to equity ratio (3.1%) is considered satisfactory.

Reducing Debt: 1637's debt to equity ratio has reduced from 27.4% to 3.1% over the past 5 years.

Debt Coverage: 1637's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: 1637 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 1637 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 1637's debt is covered by short term assets (assets are 45.8x debt).


Next Steps

Dividend

What is SH Group (Holdings)'s current dividend yield, its reliability and sustainability?

3.41%

Current Dividend Yield


Dividend Yield vs Market

company3.4%marketbottom25%2.3%markettop25%6.3%industryaverage4.8%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: 1637's dividend (3.41%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.26%).

High Dividend: 1637's dividend (3.41%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.26%).


Stability and Growth of Payments

Stable Dividend: Too early to tell whether 1637's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if 1637's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (16.8%), 1637'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 SH Group (Holdings)'s salary, the management and board of directors tenure and is there insider trading?

3.6yrs

Average management tenure


CEO

Man Lau (54yo)

0yrs

Tenure

HK$2,425,000

Compensation

Mr. Man Ching Lau serves as Chief Executive Officer of SH Group (Holdings) Limited and has been its Executive Director since May 9, 2016. Mr. Lau joined SH Group and became the Sales and Marketing Manager  ...


CEO Compensation Analysis

Compensation vs Market: Man's total compensation ($USD309.73K) is above average for companies of similar size in the Hong Kong market ($USD215.77K).

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


Management Age and Tenure

3.6yrs

Average Tenure

55yo

Average Age

Experienced Management: 1637's management team is considered experienced (3.6 years average tenure).


Board Age and Tenure

3.0yrs

Average Tenure

61yo

Average Age

Experienced Board: 1637's board of directors are considered experienced (3 years average tenure).


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

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Kam Fai Tse (56yo)

    Company Secretary

    • Tenure: 3.6yrs
  • Arash Azarbarzin

    President

    • Tenure: 1.9yrs
  • Cheung Yu (56yo)

    Chairman

    • Tenure: 0yrs
    • Compensation: HK$2.89m
  • Man Lau (54yo)

    CEO & Executive Director

    • Tenure: 0yrs
    • Compensation: HK$2.43m
  • Ho Chan (32yo)

    Group Financial Controller

    • Tenure: 3.8yrs

Board Members

  • Man Law (67yo)

    Independent Non-Executive Director

    • Tenure: 0.08yrs
  • David Lam (67yo)

    Independent Non-Executive Director

    • Tenure: 3yrs
    • Compensation: HK$156.00k
  • Stephen Lee (66yo)

    Independent Non-Executive Director

    • Tenure: 3yrs
    • Compensation: HK$156.00k
  • Cheung Yu (56yo)

    Chairman

    • Tenure: 0yrs
    • Compensation: HK$2.89m
  • Man Lau (54yo)

    CEO & Executive Director

    • Tenure: 0yrs
    • Compensation: HK$2.43m
  • Ho Yu (31yo)

    Non-Executive Director

    • Tenure: 3.5yrs
    • Compensation: HK$156.00k

Company Information

SH Group (Holdings) Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: SH Group (Holdings) Limited
  • Ticker: 1637
  • Exchange: SEHK
  • Founded: 1986
  • Industry: Construction and Engineering
  • Sector: Capital Goods
  • Market Cap: HK$164.000m
  • Shares outstanding: 400.00m
  • Website: https://www.shunhingeng.com

Number of Employees


Location

  • SH Group (Holdings) Limited
  • Cheung Sha Wan Plaza, Tower I
  • 6th Floor
  • Cheung Sha Wan
  • Kowloon
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1637SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJan 2017

Biography

SH Group (Holdings) Limited, an investment holding company, provides electrical and mechanical (E&M) engineering services for public and private sectors in Hong Kong. It engages in the supply, installation ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/09 12:56
End of Day Share Price2019/12/06 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.