SEHK:2283

Stock Analysis Report

Executive Summary

TK Group (Holdings) Limited, an investment holding company, engages in the manufacture, sale, subcontracting, fabrication, and modification of molds and plastic components in the People’s Republic of China, South East Asia, Europe, the United States, Mexico, and internationally.

Rewards

Trading at 53.8% below its fair value

Earnings are forecast to grow 16.32% per year

Risk Analysis

Has a high level of debt

Unstable dividend track record



Snowflake Analysis

Undervalued with reasonable growth potential.

Share Price & News

How has TK Group (Holdings)'s share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 2283 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.8%

2283

1.3%

HK Machinery

1.5%

HK Market


1 Year Return

2.5%

2283

35.6%

HK Machinery

5.9%

HK Market

Return vs Industry: 2283 underperformed the Hong Kong Machinery industry which returned 35% over the past year.

Return vs Market: 2283 underperformed the Hong Kong Market which returned 6.4% over the past year.


Shareholder returns

2283IndustryMarket
7 Day3.8%1.3%1.5%
30 Day5.4%6.0%4.2%
90 Day16.1%19.6%8.7%
1 Year7.4%2.5%39.4%35.6%9.8%5.9%
3 Year112.0%87.2%73.1%62.2%27.7%14.7%
5 Year210.7%151.5%59.8%46.4%21.4%1.2%

Price Volatility Vs. Market

How volatile is TK Group (Holdings)'s share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is TK Group (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: 2283 (HK$4.07) is trading below our estimate of fair value (HK$8.81)

Significantly Below Fair Value: 2283 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 2283 is good value based on its PE Ratio (10.5x) compared to the Machinery industry average (11.3x).

PE vs Market: 2283 is good value based on its PE Ratio (10.5x) compared to the Hong Kong market (10.5x).


Price to Earnings Growth Ratio

PEG Ratio: 2283 is good value based on its PEG Ratio (0.6x)


Price to Book Ratio

PB vs Industry: 2283 is overvalued based on its PB Ratio (3.2x) compared to the HK Machinery industry average (1.1x).


Next Steps

Future Growth

How is TK Group (Holdings) forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

16.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2283's forecast earnings growth (16.3% per year) is above the savings rate (1.6%).

Earnings vs Market: 2283's earnings (16.3% per year) are forecast to grow faster than the Hong Kong market (11.3% per year).

High Growth Earnings: 2283's earnings are forecast to grow, but not significantly.

Revenue vs Market: 2283's revenue (11.5% per year) is forecast to grow faster than the Hong Kong market (10.2% per year).

High Growth Revenue: 2283's revenue (11.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 2283's Return on Equity is forecast to be high in 3 years time (30.3%)


Next Steps

Past Performance

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

19.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 2283 has high quality earnings.

Growing Profit Margin: 2283's current net profit margins (14.2%) are lower than last year (16%).


Past Earnings Growth Analysis

Earnings Trend: 2283's earnings have grown by 19.5% per year over the past 5 years.

Accelerating Growth: 2283's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 2283 had negative earnings growth (-2.4%) over the past year, making it difficult to compare to the Machinery industry average (7.3%).


Return on Equity

High ROE: 2283's Return on Equity (30.2%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

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


Financial Position Analysis

Short Term Liabilities: 2283's short term assets (HK$1.7B) exceed its short term liabilities (HK$842.3M).

Long Term Liabilities: 2283's short term assets (HK$1.7B) exceed its long term liabilities (HK$578.4M).


Debt to Equity History and Analysis

Debt Level: 2283's debt to equity ratio (52.2%) is considered high.

Reducing Debt: 2283's debt to equity ratio has increased from 29.6% to 52.2% over the past 5 years.

Debt Coverage: 2283's debt is well covered by operating cash flow (78.7%).

Interest Coverage: 2283 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 2283 has a high level of physical assets or inventory.

Debt Coverage by Assets: 2283's debt is covered by short term assets (assets are 3x debt).


Next Steps

Dividend

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

4.88%

Current Dividend Yield


Dividend Yield vs Market

company4.9%marketbottom25%2.2%markettop25%6.0%industryaverage2.5%forecastin3Years6.0%

Current dividend yield vs market & industry

Notable Dividend: 2283's dividend (4.91%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.17%).

High Dividend: 2283's dividend (4.91%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.02%).


Stability and Growth of Payments

Stable Dividend: 2283 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 2283's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (48.9%), 2283's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 2283's dividends in 3 years are forecast to be well covered by earnings (48.1% payout ratio).


Next Steps

Management

What is the CEO of TK Group (Holdings)'s salary, the management and board of directors tenure and is there insider trading?

5.5yrs

Average management tenure


CEO

Michael Yung (58yo)

0yrs

Tenure

HK$7,113,000

Compensation

Mr. Kin Cheung Yung, also known as Michael, serves as the Chief Executive Officer at TK Group Holdings Limited. Mr. Yung has approximately 25 years of experience in plastic mold fabrication and plastic inj ...


CEO Compensation Analysis

Compensation vs Market: Michael's total compensation ($USD914.82K) is above average for companies of similar size in the Hong Kong market ($USD340.45K).

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


Management Age and Tenure

5.5yrs

Average Tenure

57.5yo

Average Age

Experienced Management: 2283's management team is seasoned and experienced (5.5 years average tenure).


Board Age and Tenure

6.2yrs

Average Tenure

58yo

Average Age

Experienced Board: 2283's board of directors are considered experienced (6.2 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.


Recent Insider Transactions

BuyHK$151,22508 Jan 20
FMR LLC
EntityCompany
Shares38,000
Max PriceHK$3.98
BuyHK$5,154,95720 Nov 19
FMR LLC
EntityCompany
Shares1,390,000
Max PriceHK$3.71
BuyHK$245,00028 Oct 19
Eastern Mix Company Limited
EntityCompany
Shares70,000
Max PriceHK$3.50
BuyHK$105,00024 Oct 19
Eastern Mix Company Limited
EntityCompany
Shares30,000
Max PriceHK$3.50
BuyHK$98,00023 Oct 19
Eastern Mix Company Limited
EntityCompany
Shares28,000
Max PriceHK$3.50
BuyHK$7,00022 Oct 19
Eastern Mix Company Limited
EntityCompany
Shares2,000
Max PriceHK$3.50
BuyHK$7,00018 Oct 19
Eastern Mix Company Limited
EntityCompany
Shares2,000
Max PriceHK$3.50
BuyHK$56,00017 Oct 19
Eastern Mix Company Limited
EntityCompany
Shares16,000
Max PriceHK$3.50
BuyHK$28,00016 Oct 19
Eastern Mix Company Limited
EntityCompany
Shares8,000
Max PriceHK$3.50
BuyHK$189,00015 Oct 19
Eastern Mix Company Limited
EntityCompany
Shares54,000
Max PriceHK$3.50
BuyHK$280,00014 Oct 19
Eastern Mix Company Limited
EntityCompany
Shares80,000
Max PriceHK$3.50
BuyHK$238,00011 Oct 19
Eastern Mix Company Limited
EntityCompany
Shares68,000
Max PriceHK$3.50
BuyHK$455,00009 Oct 19
Eastern Mix Company Limited
EntityCompany
Shares130,000
Max PriceHK$3.50
BuyHK$2,013,69720 Sep 19
Eastern Mix Company Limited
EntityCompany
Shares576,000
Max PriceHK$3.50
BuyHK$21,00011 Sep 19
Eastern Mix Company Limited
EntityCompany
Shares6,000
Max PriceHK$3.50
BuyHK$14,00010 Sep 19
Eastern Mix Company Limited
EntityCompany
Shares4,000
Max PriceHK$3.50
BuyHK$1,337,00109 Sep 19
Eastern Mix Company Limited
EntityCompany
Shares382,000
Max PriceHK$3.50
BuyHK$707,00006 Sep 19
Eastern Mix Company Limited
EntityCompany
Shares202,000
Max PriceHK$3.50
BuyHK$2,127,39405 Sep 19
Eastern Mix Company Limited
EntityCompany
Shares608,000
Max PriceHK$3.50
BuyHK$951,99904 Sep 19
Eastern Mix Company Limited
EntityCompany
Shares272,000
Max PriceHK$3.50
BuyHK$175,00004 Sep 19
Eastern Mix Company Limited
EntityCompany
Shares50,000
Max PriceHK$3.50
BuyHK$672,59802 Sep 19
Eastern Mix Company Limited
EntityCompany
Shares194,000
Max PriceHK$3.47
BuyHK$738,07230 Aug 19
Eastern Mix Company Limited
EntityCompany
Shares216,000
Max PriceHK$3.42
SellHK$29,62001 Aug 19
FMR LLC
EntityCompany
Shares8,000
Max PriceHK$3.70
BuyHK$16,160,00804 Jun 19
FMR LLC
EntityCompany
Shares4,000,000
Max PriceHK$4.04

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Alan Li (60yo)

    Chairman

    • Compensation: HK$9.08m
  • Michael Yung (58yo)

    CEO & Executive Director

    • Compensation: HK$7.11m
  • Leung Lee (58yo)

    Executive Director

    • Tenure: 6.8yrs
    • Compensation: HK$4.48m
  • Franky Cheung (57yo)

    CFO, Company Secretary & Executive Director

    • Tenure: 6.2yrs
    • Compensation: HK$5.16m
  • Samuel Lok (43yo)

    Chief Marketing Director of the Plastic Components Manufacturing Division

    • Tenure: 10.4yrs
  • Carl Thomas Bergstrom (66yo)

    Senior Precision Mold Consultant

    • Tenure: 2.8yrs
  • Yiu Yue (52yo)

    Corporate Financial Controller

    • Tenure: 5.5yrs
  • Xie Zeng (44yo)

    Human Resources Director

    • Tenure: 3.8yrs

Board Members

  • Roy Chung (66yo)

    Independent Non-Executive Director

    • Tenure: 6.2yrs
    • Compensation: HK$290.00k
  • WK Tsang (67yo)

    Independent Non-Executive Director

    • Tenure: 6.2yrs
    • Compensation: HK$290.00k
  • Alan Li (60yo)

    Chairman

    • Compensation: HK$9.08m
  • Michael Yung (58yo)

    CEO & Executive Director

    • Compensation: HK$7.11m
  • Leung Lee (58yo)

    Executive Director

    • Tenure: 6.8yrs
    • Compensation: HK$4.48m
  • Franky Cheung (57yo)

    CFO, Company Secretary & Executive Director

    • Tenure: 6.2yrs
    • Compensation: HK$5.16m
  • Christine Leung (39yo)

    Independent Non-Executive Director

    • Tenure: 0.08yrs

Company Information

TK Group (Holdings) Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: TK Group (Holdings) Limited
  • Ticker: 2283
  • Exchange: SEHK
  • Founded: 1983
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: HK$3.416b
  • Shares outstanding: 833.26m
  • Website: https://www.tkmold.com

Number of Employees


Location

  • TK Group (Holdings) Limited
  • TK Technology Park
  • Tangjia Community
  • Shenzhen
  • Guangdong Province
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
2283SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDDec 2013

Biography

TK Group (Holdings) Limited, an investment holding company, engages in the manufacture, sale, subcontracting, fabrication, and modification of molds and plastic components in the People’s Republic of China, South East Asia, Europe, the United States, Mexico, and internationally. The company operates through two segments, Mold Fabrication and Plastic Components Manufacturing. It provides precision, standard, special decoration, and medical molds. The company serves customers in various markets, including mobile phones and wearable devices, commercial telecommunications equipment, automobile, medical and health care, smart home, household electrical appliances, digital devices, and others. The company was founded in 1983 and is headquartered in Shenzhen, China. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/01/18 12:52
End of Day Share Price2020/01/17 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.