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.

Snowflake

Fundamentals

Flawless balance sheet and undervalued.

Risks

  • SH Group (Holdings) has significant price volatility in the past 3 months.
  • SH Group (Holdings) is not covered by any analysts.

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


Market Performance


7 Day Return

2.2%

SEHK:1637

-1.4%

HK Construction

0.6%

HK Market


1 Year Return

-30.3%

SEHK:1637

-12.3%

HK Construction

-5.9%

HK Market

1637 underperformed the Construction industry which returned -12.5% over the past year.

1637 underperformed the Market in Hong Kong which returned -6.5% over the past year.


Share holder returns

1637IndustryMarket
7 Day2.2%-1.4%0.6%
30 Day-2.1%-5.6%3.7%
90 Day-16.4%-14.7%-8.2%
1 Year-27.6%-30.3%-9.0%-12.3%-2.6%-5.9%
3 Yearn/a-15.0%-23.0%30.0%17.2%
5 Yearn/a14.2%-1.8%25.9%4.8%

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 based on future cash flows and its price relative to the stock market?

>50%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

SH Group (Holdings)'s share price is below the future cash flow value, and at a moderate discount (> 20%).

SH Group (Holdings)'s share price is below the future cash flow value, and at a substantial discount (> 40%).


Price Based on Earnings

SH Group (Holdings) is good value based on earnings compared to the HK Construction industry average.

SH Group (Holdings) is good value based on earnings compared to the Hong Kong market.


Price Based on Expected Growth

Unable to calculate PEG ratio for SH Group (Holdings), we can't assess if its growth is good value.


Price Based on Value of Assets

SH Group (Holdings) is good value based on assets compared to the HK Construction industry average.


Next Steps

Future Growth

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

7.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Unable to determine if SH Group (Holdings) is high growth as no revenue estimate data is available.

SH Group (Holdings)'s earnings are expected to grow by 7.5% yearly, however this is not considered high growth (20% yearly).

Unable to compare SH Group (Holdings)'s revenue growth to the Hong Kong market average as no estimate data is available.

SH Group (Holdings)'s earnings growth is positive but not above the Hong Kong market average.

SH Group (Holdings)'s earnings growth is expected to exceed the low risk savings rate of 2%.


Earnings per Share Growth Estimates


Future Return on Equity

Unable to establish if SH Group (Holdings) will efficiently use shareholders’ funds in the future without estimates of Return on Equity.


Next Steps

Past Performance

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

7.2%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

SH Group (Holdings)'s year on year earnings growth rate has been positive over the past 5 years, however the most recent earnings are below average.

SH Group (Holdings)'s 1-year earnings growth is negative, it can't be compared to the 5-year average.

SH Group (Holdings)'s 1-year earnings growth is negative, it can't be compared to the HK Construction industry average.


Return on Equity

SH Group (Holdings) has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

SH Group (Holdings) used its assets more efficiently than the HK Construction industry average last year based on Return on Assets.


Return on Capital Employed

SH Group (Holdings)'s use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

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


Financial Position Analysis

SH Group (Holdings) is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

SH Group (Holdings)'s cash and other short term assets cover its long term commitments.


Debt to Equity History and Analysis

SH Group (Holdings)'s level of debt (3.9%) compared to net worth is satisfactory (less than 40%).

The level of debt compared to net worth has been reduced over the past 5 years (28.6% vs 3.9% today).

Debt is well covered by operating cash flow (391.1%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 64.1x coverage).


Balance Sheet

Low level of unsold assets.

Debt is covered by short term assets, assets are 33.5x debt.


Next Steps

Dividend

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

3.04%

Current Dividend Yield


Upcoming Dividend Payment

Purchase SH Group (Holdings) before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield and Payments Analysis

SH Group (Holdings)'s pays a higher dividend yield than the bottom 25% of dividend payers in Hong Kong (2.08%).

SH Group (Holdings)'s dividend is below the markets top 25% of dividend payers in Hong Kong (5.73%).

It is too early to tell whether SH Group (Holdings) has stable dividend payments.

SH Group (Holdings) only just started paying a dividend, it is too early to tell if payments are increasing.


Current Payout to Shareholders

Dividends paid are well covered by earnings (4.1x coverage).


Future Payout to Shareholders

Insufficient estimate data to determine if a dividend will be paid in 3 years and that it will be sustainable.


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?

3.2yrs

Average management tenure


CEO

Man Lau (54yo)

HK$2,704,000

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

Man's remuneration is higher than average for companies of similar size in Hong Kong.

Man's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

3.2yrs

Average Tenure

55yo

Average Age

The tenure for the SH Group (Holdings) management team is about average.


Board Age and Tenure

2.6yrs

Average Tenure

55yo

Average Age

The average tenure for the SH Group (Holdings) board of directors is less than 3 years, this suggests a new board.


Insider Trading

No 3 month individual insider trading information.


Ownership Breakdown


Management Team

  • Kam Fai Tse (56yo)

    Company Secretary

    • Tenure: 3.2yrs
  • Arash Azarbarzin

    President

    • Tenure: 1.5yrs
  • Cheung Yu (56yo)

    Chairman

    • Compensation: HK$3.42m
  • Man Lau (54yo)

    CEO & Executive Director

    • Compensation: HK$2.70m
  • Ho Chan (32yo)

    Group Financial Controller

    • Tenure: 3.3yrs

Board Members

  • David Lam (67yo)

    Independent Non-Executive Director

    • Tenure: 2.6yrs
    • Compensation: HK$120.00k
  • Stephen Lee (66yo)

    Independent Non-Executive Director

    • Tenure: 2.6yrs
    • Compensation: HK$120.00k
  • Edmond To (47yo)

    Independent Non-Executive Director

    • Tenure: 2.6yrs
    • Compensation: HK$120.00k
  • Cheung Yu (56yo)

    Chairman

    • Compensation: HK$3.42m
  • Man Lau (54yo)

    CEO & Executive Director

    • Tenure: 3.2yrs
    • Compensation: HK$2.70m
  • Ho Yu (31yo)

    Non-Executive Director

    • Tenure: 3.1yrs
    • Compensation: HK$120.00k

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$184.000m
  • Shares outstanding: 400.00m
  • Website: Click here

Number of Employees


Location

  • SH Group (Holdings) Limited
  • Units 603-606, Tower I
  • 6th Floor
  • 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 Analysis2019/07/15 13:17
End of Day Share Price2019/07/15 00:00
Earnings2019/03/31
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.