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

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


Market Performance


7 Day Return

3.9%

1637

-0.2%

HK Construction

0.9%

HK Market


1 Year Return

-22.5%

1637

-17.4%

HK Construction

0.6%

HK Market

Return vs Industry: 1637 underperformed the Hong Kong Construction industry which returned -17.4% over the past year.

Return vs Market: 1637 underperformed the Hong Kong Market which returned 0.6% over the past year.


Shareholder returns

1637IndustryMarket
7 Day3.9%-0.2%0.9%
30 Day3.9%-2.6%0.4%
90 Day-16.0%-11.7%-5.5%
1 Year-20.0%-22.5%-13.9%-17.4%4.2%0.6%
3 Yearn/a-26.7%-34.7%15.5%3.9%
5 Yearn/a0.5%-14.6%19.9%-0.1%

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?

6.96x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: 1637 (HK$0.4) is trading above our estimate of fair value (HK$0.16)

Significantly Undervalued: 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 (7x) compared to the Construction industry average (9.8x).

PE vs Market: 1637 is good value based on its PE Ratio (7x) compared to the Hong Kong market (10.3x).


Price to Earnings Growth Ratio

Low 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?

7.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1637's forecast earnings growth (7.4% per year) is above the savings rate (2%).

Earnings vs Market: 1637's earnings (7.4% per year) are forecast to grow slower than the Hong Kong market (11.4% per year).

High Growth Earnings: 1637's earnings are forecast to grow, but not significantly.

Revenue vs Market: Insufficient data to determine if 1637's revenue is forecast to grow faster than the Hong Kong market.

High Growth Revenue: Insufficient data to determine if 1637's revenue is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: Insufficient data to determine if 1637's Return on Equity is forecast to be high in 3 years time


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

Earnings Trend: 1637's earnings have grown by 7.2% per year over the past 5 years.

Accelerating Growth: 1637's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 1637 had negative earnings growth (-36.2%) over the past year, making it difficult to compare to the Construction industry average (-12.4%).


Return on Equity

High ROE: 1637's Return on Equity (9.6%) is considered low.


Return on Assets

ROA vs Industry: 1637 has a higher Return on Assets than the Construction industry average last year.


Return on Capital Employed

ROCE Improving: 1637's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

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


Financial Position Analysis

Short Term Liabilities: 1637's short term assets (HK$306.9M) exceeds its short term liabilities (HK$106.7M)

Long Term Liabilities: 1637's short term assets (306.9M) exceeds its long term liabilities (374.0K)


Debt to Equity History and Analysis

Debt Level: 1637's debt to equity ratio (3.9%) is considered satisfactory

Reducing Debt: 1637's debt to equity ratio has reduced from 28.6% to 3.9% 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 33.485150x debt).


Next Steps

Dividend

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

3.54%

Current Dividend Yield


Dividend Yield vs Market

company3.5%marketbottom25%2.3%markettop25%6.3%industryaverage4.6%forecastin3Yearsn/a

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: 1637's dividend (3.54%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.26%).

High Dividend: 1637's dividend (3.54%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.25%).

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 (24.7%), 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?

3.4yrs

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: Insufficient data to establish whether Man's total compensation is reasonable compared to companies of similar size in the Hong Kong market.

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


Management Age and Tenure

3.4yrs

Average Tenure

55yo

Average Age

Experienced Management: 1637's management team is considered experienced (3.4 years average tenure).


Board Age and Tenure

3.1yrs

Average Tenure

56yo

Average Age

Experienced Board: 1637's board of directors are considered experienced (3.1 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


Management Team

  • Kam Fai Tse (56yo)

    Company Secretary

    • Tenure: 3.4yrs
  • Arash Azarbarzin

    President

    • Tenure: 1.8yrs
  • 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: 3.6yrs

Board Members

  • David Lam (67yo)

    Independent Non-Executive Director

    • Tenure: 2.8yrs
    • Compensation: HK$156.00k
  • Stephen Lee (66yo)

    Independent Non-Executive Director

    • Tenure: 2.8yrs
    • 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: 3.3yrs
    • 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$158.000m
  • 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 Analysis2019/10/19 12:50
End of Day Share Price2019/10/18 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.