SEHK:1829

Stock Analysis Report

China Machinery Engineering

Executive Summary

China Machinery Engineering Corporation, together with its subsidiaries, operates as an engineering contracting and services provider in Asia, South America, North America, Africa, and Europe.

Snowflake

Fundamentals

Very undervalued with adequate balance sheet and pays a dividend.

Share Price & News

How has China Machinery Engineering's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

4.1%

SEHK:1829

4.1%

HK Construction

2.5%

HK Market


1 Year Return

-11.6%

SEHK:1829

-14.7%

HK Construction

-3.9%

HK Market

1829 outperformed the Construction industry which returned -14.7% over the past year.

1829 underperformed the Market in Hong Kong which returned -3.9% over the past year.


Share holder returns

1829IndustryMarket
7 Day4.1%4.1%2.5%
30 Day3.1%6.6%7.6%
90 Day-8.4%-10.4%0.8%
1 Year-5.6%-11.6%-11.0%-14.7%-0.4%-3.9%
3 Year-15.5%-28.6%-19.4%-27.6%19.6%7.6%
5 Year-8.2%-28.3%3.8%-11.7%17.7%-1.7%

Price Volatility Vs. Market

How volatile is China Machinery Engineering's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is China Machinery Engineering 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

China Machinery Engineering's share price is below the future cash flow value, and at a moderate discount (> 20%).

China Machinery Engineering's share price is below the future cash flow value, and at a substantial discount (> 40%).


Price Based on Earnings

China Machinery Engineering is good value based on earnings compared to the HK Construction industry average.

China Machinery Engineering is good value based on earnings compared to the Hong Kong market.


Price Based on Expected Growth

China Machinery Engineering is good value based on expected growth next year.


Price Based on Value of Assets

China Machinery Engineering is good value based on assets compared to the HK Construction industry average.


Next Steps

Future Growth

How is China Machinery Engineering expected to perform in the next 1 to 3 years based on estimates from 6 analysts?

9.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

China Machinery Engineering's revenue is expected to grow by 9.2% yearly, however this is not considered high growth (20% yearly).

China Machinery Engineering's earnings are expected to grow by 9.8% yearly, however this is not considered high growth (20% yearly).

China Machinery Engineering's revenue growth is positive but not above the Hong Kong market average.

China Machinery Engineering's earnings growth is positive but not above the Hong Kong market average.

China Machinery Engineering's earnings growth is expected to exceed the low risk savings rate of 2%.


Earnings per Share Growth Estimates


Future Return on Equity

China Machinery Engineering is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


Next Steps

Past Performance

How has China Machinery Engineering performed over the past 5 years?

-0.3%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

China Machinery Engineering's year on year earnings growth rate was negative over the past 5 years, however the most recent earnings are above average.

China Machinery Engineering's 1-year earnings growth exceeds its 5-year average (13.6% vs -0.3%)

China Machinery Engineering's earnings growth has exceeded the HK Construction industry average in the past year (13.6% vs -13.1%).


Return on Equity

China Machinery Engineering has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

China Machinery Engineering used its assets less efficiently than the HK Construction industry average last year based on Return on Assets.


Return on Capital Employed

China Machinery Engineering's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is China Machinery Engineering's financial position?


Financial Position Analysis

China Machinery Engineering is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

China Machinery Engineering's cash and other short term assets cover its long term commitments.


Debt to Equity History and Analysis

China Machinery Engineering's level of debt (3.9%) compared to net worth is satisfactory (less than 40%).

The level of debt compared to net worth has increased over the past 5 years (2.5% vs 3.9% today).

Operating cash flow is negative therefore debt is not well covered.

China Machinery Engineering earns more interest than it pays, coverage of interest payments is not a concern.


Balance Sheet

Low level of unsold assets.

Debt is covered by short term assets, assets are 63.1x debt.


Next Steps

Dividend

What is China Machinery Engineering's current dividend yield, its reliability and sustainability?

8.28%

Expected Dividend Yield


Dividend Yield and Payments Analysis

China Machinery Engineering's pays a higher dividend yield than the bottom 25% of dividend payers in Hong Kong (2.19%).

China Machinery Engineering's dividend is above the markets top 25% of dividend payers in Hong Kong (6.06%).

Whilst dividend payments have been stable, China Machinery Engineering has been paying a dividend for less than 10 years.

Dividend payments have increased, but China Machinery Engineering only paid a dividend in the past 6 years.


Current Payout to Shareholders

Dividends paid are well covered by earnings (2.6x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be well covered by earnings (2.3x coverage).


Next Steps

Management

What is the CEO of China Machinery Engineering's salary, the management and board of directors tenure and is there insider trading?

2.6yrs

Average management tenure


CEO

Xiaojun Han (50yo)

0.8yrs

Tenure

CN¥1,752,000

Compensation

Mr. Han Xiaojun has been President of China Machinery Engineering Corporation since December 21, 2018. Mr. Han was Vice Chairman of China Machinery Engineering Corporation since March 5, 2018 until Decembe ...


CEO Compensation Analysis

Xiaojun's remuneration is lower than average for companies of similar size in Hong Kong.

Insufficient data for Xiaojun to compare compensation growth.


Management Age and Tenure

2.6yrs

Average Tenure

50.5yo

Average Age

The tenure for the China Machinery Engineering management team is about average.


Board Age and Tenure

5.6yrs

Average Tenure

55yo

Average Age

The tenure for the China Machinery Engineering board of directors is about average.


Insider Trading

No 3 month open market individual insider trading information.


Recent Insider Transactions

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Ownership Breakdown


Management Team

  • Seaman Kwok (60yo)

    Joint Company Secretary

    • Tenure: 1.6yrs
  • Jianguo Zhang (58yo)

    Vice President

    • Tenure: 13.3yrs
  • Chun Zhang (51yo)

    Executive Chairman

    • Tenure: 1.7yrs
    • Compensation: CN¥1.75m
  • Wei Ai (49yo)

    Vice President

    • Tenure: 4.8yrs
  • Wei Zhang (56yo)

    Vice President

    • Tenure: 4yrs
  • Yanshui Fang (48yo)

    Vice President

    • Tenure: 2.6yrs
  • Zigang Tong (48yo)

    Vice President

    • Tenure: 2.6yrs
  • Yili Wang (53yo)

    CFO & Joint Company Secretary

    • Tenure: 1.6yrs
  • Ting Liu (37yo)

    Deputy GM of the Audit Department & Supervisor

    • Tenure: 1.7yrs
  • Xiaojun Han (50yo)

    President & Executive Director

    • Tenure: 0.8yrs
    • Compensation: CN¥1.75m

Board Members

  • Hongyu Liu (56yo)

    Independent Non-Executive Director

    • Tenure: 8.7yrs
    • Compensation: CN¥229.00k
  • Chun Zhang (51yo)

    Executive Chairman

    • Tenure: 1.7yrs
    • Compensation: CN¥1.75m
  • Yongzhong Fang (68yo)

    Independent Non-Executive Director

    • Tenure: 8.2yrs
    • Compensation: CN¥229.00k
  • Huaqiang Quan (49yo)

    Chairman of Supervisory Board

    • Tenure: 0yrs
  • Bernard Wu (54yo)

    Independent Non Executive Director

    • Tenure: 5.6yrs
    • Compensation: CN¥229.00k
  • Li Liu (64yo)

    Independent Non-Executive Director

    • Tenure: 8.7yrs
    • Compensation: CN¥229.00k
  • Fusheng Zhang (66yo)

    Non Executive Director

    • Tenure: 5.6yrs
    • Compensation: CN¥118.00k
  • Benli Yu (65yo)

    Non Executive Director

    • Tenure: 5.6yrs
    • Compensation: CN¥117.00k
  • Ting Liu (37yo)

    Deputy GM of the Audit Department & Supervisor

    • Tenure: 1.7yrs
  • Xiaojun Han (50yo)

    President & Executive Director

    • Tenure: 0.8yrs
    • Compensation: CN¥1.75m

Company Information

China Machinery Engineering Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: China Machinery Engineering Corporation
  • Ticker: 1829
  • Exchange: SEHK
  • Founded: 1978
  • Industry: Construction and Engineering
  • Sector: Capital Goods
  • Market Cap: HK$13.574b
  • Shares outstanding: 4.13b
  • Website: https://www.cmec.com

Number of Employees


Location

  • China Machinery Engineering Corporation
  • No. 178 Guang’anmenwai Street
  • Xicheng District
  • Beijing
  • 100055
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1829SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares-Foreign ListedHKHKDDec 2012
C3MDB (Deutsche Boerse AG)YesForeign Shares-Foreign ListedDEEURDec 2012
1829SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDDec 2012
CMYY.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDApr 2018

Biography

China Machinery Engineering Corporation, together with its subsidiaries, operates as an engineering contracting and services provider in Asia, South America, North America, Africa, and Europe. It operates  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/09/15 12:53
End of Day Share Price2019/09/13 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.