CIMC Vehicles (Group) (SEHK:1839) - Share price, News & Analysis

1839 fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	4/6
Past Performance	0/6
Financial Health	5/6
Dividends	2/6

1839 Stock Overview

CIMC Vehicles (Group) Co., Ltd. engages in the production and sale of semi-trailers and truck bodies for specialty vehicles in China, North America, Europe, and internationally.

Rewards

Trading at 21.7% below our estimate of its fair value

Earnings are forecast to grow 25.47% per year

Risk Analysis

High level of non-cash earnings

Dividend of 4% is not well covered by earnings

Volatile share price over the past 3 months

Shareholders have been diluted in the past year

CIMC Vehicles (Group) Competitors

Price History & Performance

Summary of all time highs, changes and price drops for CIMC Vehicles (Group)
Historical stock prices
Current Share Price	HK$5.86
52 Week High	HK$8.27
52 Week Low	HK$4.10
Beta	0.64
1 Month Change	14.90%
3 Month Change	13.35%
1 Year Change	-25.73%
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	-4.56%

Recent News & Updates

Jun 23

CIMC Vehicles (Group) (HKG:1839) Will Want To Turn Around Its Return Trends

There are a few key trends to look for if we want to identify the next multi-bagger. Ideally, a business will show two...

May 26

Is CIMC Vehicles (Group) (HKG:1839) Using Too Much Debt?

Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...

Shareholder Returns

	1839	HK Machinery	HK Market
7D	15.4%	-4.8%	-1.2%
1Y	-25.7%	-27.6%	-23.8%

Return vs Industry: 1839 exceeded the Hong Kong Machinery industry which returned -27.6% over the past year.

Return vs Market: 1839 underperformed the Hong Kong Market which returned -23.8% over the past year.

Price Volatility

Is 1839's price volatile compared to industry and market?
1839 volatility
1839 Average Weekly Movement	10.6%
Machinery Industry Average Movement	6.4%
Market Average Movement	7.0%
10% most volatile stocks in HK Market	13.6%
10% least volatile stocks in HK Market	3.3%

Stable Share Price: 1839 is more volatile than 75% of Hong Kong stocks over the past 3 months, typically moving +/- 11% a week.

Volatility Over Time: 1839's weekly volatility (11%) has been stable over the past year, but is still higher than 75% of Hong Kong stocks.

About the Company

Founded	Employees	CEO	Website
1996	13,286	Guiping Li	https://www.cimcvehiclesgroup.com

CIMC Vehicles (Group) Co., Ltd. engages in the production and sale of semi-trailers and truck bodies for specialty vehicles in China, North America, Europe, and internationally. The company offers container chassis, flatbed, side-wall, and stake trailers; curtain-side, van, and refrigerated trailers; liquid and dry bulk tank trailers; and dump semi-trailers, terminal trailers, and sanitation trucks. It also provides truck bodies for urban dump trucks and fully-assembled vehicles of concrete mixers.

CIMC Vehicles (Group) Fundamentals Summary

How do CIMC Vehicles (Group)'s earnings and revenue compare to its market cap?
1839 fundamental statistics
Market Cap	CN¥19.36b
Earnings (TTM)	CN¥822.35m
Revenue (TTM)	CN¥25.91b

12.3x

P/E Ratio

0.4x

P/S Ratio

Is 1839 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
1839 income statement (TTM)
Revenue	CN¥25.91b
Cost of Revenue	CN¥23.18b
Gross Profit	CN¥2.73b
Other Expenses	CN¥1.91b
Earnings	CN¥822.35m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.41
Gross Margin	10.54%
Net Profit Margin	3.17%
Debt/Equity Ratio	12.0%

How did 1839 perform over the long term?

See historical performance and comparison

Dividends

4.0%

Current Dividend Yield

47%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 1839 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 1839?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 1839. This is calculated by dividing 1839's market cap by their current preferred multiple.
What is 1839's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥19.36b

1839 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.7x
Enterprise Value/EBITDA	13.9x
PEG Ratio	0.5x

Price to Earnings Ratio vs Peers

How does 1839's PE Ratio compare to its peers?

1839 PE Ratio vs Peers

The above table shows the PE ratio for 1839 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	25.7x

Forward PE

Price-To-Earnings vs Peers: 1839 is good value based on its Price-To-Earnings Ratio (12.3x) compared to the peer average (25.7x).

Price to Earnings Ratio vs Industry

How does 1839's PE Ratio compare vs other companies in the Hong Kong Machinery Industry?

Price-To-Earnings vs Industry: 1839 is expensive based on its Price-To-Earnings Ratio (12.3x) compared to the Hong Kong Machinery industry average (10.7x)

Price to Earnings Ratio vs Fair Ratio

What is 1839's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

1839 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	12.3x
Fair PE Ratio	11.8x

Price-To-Earnings vs Fair Ratio: 1839 is expensive based on its Price-To-Earnings Ratio (12.3x) compared to the estimated Fair Price-To-Earnings Ratio (11.8x).

Share Price vs Fair Value

What is the Fair Price of 1839 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 1839 (HK$5.86) is trading below our estimate of fair value (HK$7.49)

Significantly Below Fair Value: 1839 is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: 1839 is good value based on its PEG Ratio (0.5x)

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Future Growth

How is CIMC Vehicles (Group) forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

25.5%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1839's forecast earnings growth (25.5% per year) is above the savings rate (1.5%).

Earnings vs Market: 1839's earnings (25.5% per year) are forecast to grow faster than the Hong Kong market (16.7% per year).

High Growth Earnings: 1839's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 1839's revenue (13.5% per year) is forecast to grow faster than the Hong Kong market (10.1% per year).

High Growth Revenue: 1839's revenue (13.5% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if 1839's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has CIMC Vehicles (Group) performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-3.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 1839 has a high level of non-cash earnings.

Growing Profit Margin: 1839's current net profit margins (3.2%) are lower than last year (4.3%).

Past Earnings Growth Analysis

Earnings Trend: 1839's earnings have declined by 3.7% per year over the past 5 years.

Accelerating Growth: 1839's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 1839 had negative earnings growth (-34%) over the past year, making it difficult to compare to the Machinery industry average (35.6%).

Return on Equity

High ROE: 1839's Return on Equity (7.3%) is considered low.

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Financial Health

How is CIMC Vehicles (Group)'s financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 1839's short term assets (CN¥14.7B) exceed its short term liabilities (CN¥9.3B).

Long Term Liabilities: 1839's short term assets (CN¥14.7B) exceed its long term liabilities (CN¥765.2M).

Debt to Equity History and Analysis

Debt Level: 1839 has more cash than its total debt.

Reducing Debt: 1839's debt to equity ratio has reduced from 31.6% to 12% over the past 5 years.

Debt Coverage: 1839's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: 1839 earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is CIMC Vehicles (Group) current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

4.00%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 1839's dividend (4%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.78%).

High Dividend: 1839's dividend (4%) is low compared to the top 25% of dividend payers in the Hong Kong market (7.91%).

Stability and Growth of Payments

Stable Dividend: 1839 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 1839 has only been paying a dividend for 2 years, and since then payments have fallen.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (47%), 1839's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: 1839 is paying a dividend but the company has no free cash flows.

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Management

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

0.8yrs

Average management tenure

CEO

Guiping Li (56 yo)

no data

Tenure

CN¥7,775,881

Compensation

Mr. Guiping Li serves as Chief Executive Officer and President at CIMC Vehicles (Group) Co., Ltd and serves as its Executive Director. Prior to joining the Group, Mr. Li held various positions in CIMC from...

CEO Compensation Analysis

Compensation vs Market: Guiping's total compensation ($USD1.16M) is above average for companies of similar size in the Hong Kong market ($USD403.06K).

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

Leadership Team

Experienced Management: 1839's management team is not considered experienced ( 0.8 years average tenure), which suggests a new team.

Board Members

Experienced Board: 1839's board of directors are considered experienced (3 years average tenure).

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.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 14.3%.

Data	Last Updated (UTC time)
Company Analysis	2022/06/23 00:00
End of Day Share Price	2022/06/23 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31