SEHK:1793

Stock Analysis Report

Executive Summary

Wecon Holdings Limited, an investment holding company, operates as a construction contractor in Hong Kong.


Snowflake Analysis

Undervalued with excellent balance sheet.

Share Price & News

How has Wecon Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 1793's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

0.5%

1793

1.1%

HK Construction

0.6%

HK Market


1 Year Return

n/a

1793

-26.1%

HK Construction

-5.7%

HK Market

Return vs Industry: Insufficient data to determine how 1793 performed against the Hong Kong Construction industry.

Return vs Market: Insufficient data to determine how 1793 performed against the Hong Kong Market.


Shareholder returns

1793IndustryMarket
7 Day0.5%1.1%0.6%
30 Day-20.3%-2.7%-0.8%
90 Day-26.4%-2.4%4.1%
1 Yearn/a-22.6%-26.1%-2.2%-5.7%
3 Yearn/a-36.0%-42.8%13.8%2.3%
5 Yearn/a-26.3%-37.2%14.8%-4.2%

Price Volatility Vs. Market

How volatile is Wecon Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Wecon Holdings undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 1793 (HK$0.18) is trading below our estimate of fair value (HK$0.76)

Significantly Below Fair Value: 1793 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 1793 is good value based on its PE Ratio (2.9x) compared to the Construction industry average (8.9x).

PE vs Market: 1793 is good value based on its PE Ratio (2.9x) compared to the Hong Kong market (10.2x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 1793's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 1793 is good value based on its PB Ratio (0.6x) compared to the HK Construction industry average (1x).


Next Steps

Future Growth

How is Wecon Holdings forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

10.9%

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 Wecon 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 Wecon Holdings performed over the past 5 years?

16.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1793 has high quality earnings.

Growing Profit Margin: 1793's current net profit margins (4.3%) are higher than last year (4%).


Past Earnings Growth Analysis

Earnings Trend: 1793's earnings have grown by 16.2% per year over the past 5 years.

Accelerating Growth: 1793's earnings growth over the past year (14.8%) is below its 5-year average (16.2% per year).

Earnings vs Industry: 1793 earnings growth over the past year (14.8%) exceeded the Construction industry -5.4%.


Return on Equity

High ROE: 1793's Return on Equity (18.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Wecon Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 1793's short term assets (HK$548.8M) exceed its short term liabilities (HK$315.5M).

Long Term Liabilities: 1793's short term assets (HK$548.8M) exceed its long term liabilities (HK$3.1M).


Debt to Equity History and Analysis

Debt Level: 1793's debt to equity ratio (2%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if 1793's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: 1793's debt is well covered by operating cash flow (1042.4%).

Interest Coverage: 1793 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 1793 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 1793's debt is covered by short term assets (assets are 109.8x debt).


Next Steps

Dividend

What is Wecon Holdings's current dividend yield, its reliability and sustainability?

7.61%

Current Dividend Yield


Dividend Yield vs Market

company7.6%marketbottom25%2.3%markettop25%6.3%industryaverage4.4%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: 1793's dividend (7.61%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.27%).

High Dividend: 1793's dividend (7.61%) is in the top 25% of dividend payers in the Hong Kong market (6.33%)


Stability and Growth of Payments

Stable Dividend: Too early to tell whether 1793's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if 1793's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (22.3%), 1793'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

How experienced are the management team and are they aligned to shareholders interests?

1.4yrs

Average board tenure


CEO

Ka Yip Tsang (66yo)

1.9yrs

Tenure

HK$1,903,000

Compensation

Mr. Ka Yip Tsang has been Chairman and Chief Executive Officer of Wecon Holdings Limited since March 23, 2018. Mr. Tsang joined Wecon Group in October 1983. Mr. Tsang is a Managing Director of all the subs ...


CEO Compensation Analysis

Compensation vs Market: Ka Yip's total compensation ($USD244.50K) is about average for companies of similar size in the Hong Kong market ($USD226.09K).

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


Board Members

NamePositionTenureCompensationOwnership
Ka Yip Tsang
Chairman & CEO1.9yrsHK$1.90m75% HK$106.2m
Tsz Him Tsang
Executive Director1.7yrsHK$700.00kno data
Tsz Kit Tsang
Executive Director1.7yrsHK$545.00kno data
Kwok Wing Sze
Independent Non-Executive Director1.1yrsHK$16.00kno data
Chi Keung Lau
Independent Non-Executive Director1.1yrsHK$16.00kno data
Tim Yiu Chan
Independent Non-Executive Director1.1yrsHK$16.00kno data
Yuk Lin Lai
Director of Wecon Construction Management Limited0yrsHK$2.59mno data
Yun Kwong Chan
Director of Wecon Group0yrsHK$180.00kno data
Chi Ming Ho
Director of Wecon Group0yrsno datano data

1.4yrs

Average Tenure

60yo

Average Age

Experienced Board: 1793's board of directors are not considered experienced ( 1.4 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

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: 1793 only recently listed within the past 12 months, with total shares outstanding growing by 17.9% in the past year..


Top Shareholders

Company Information

Wecon Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Wecon Holdings Limited
  • Ticker: 1793
  • Exchange: SEHK
  • Founded: 1974
  • Industry: Construction and Engineering
  • Sector: Capital Goods
  • Market Cap: HK$141.600m
  • Shares outstanding: 800.00m
  • Website: https://www.wecon.com.hk

Number of Employees


Location

  • Wecon Holdings Limited
  • Tung Hip Commercial Building
  • 18th Floor
  • Central
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1793SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDFeb 2019

Biography

Wecon Holdings Limited, an investment holding company, operates as a construction contractor in Hong Kong. The company operates through Building Construction Contracts; and Repair, Maintenance, Alteration, and Addition Works Services segments. It undertakes building construction projects for industry, residence, commence, educational institution, and hospital; provides building maintenance and improvement works to public housings; and offers renovation works, including alteration and addition, and fitting out works. The company was founded in 1974 and is headquartered in Central, Hong Kong. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/21 13:16
End of Day Share Price2020/02/21 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.