SEHK:2345

Stock Analysis Report

Shanghai Prime Machinery

Executive Summary

Shanghai Prime Machinery Company Limited, together with its subsidiaries, engages in the design, manufacture, and sale of turbine blades, bearings, fasteners, cutting tools and accessories, and other products in the People’s Republic of China and internationally.

Rewards

Trading at 70.7% below its fair value

Risk Analysis

Has a high level of debt

Unstable dividend track record

Shareholders have been diluted in the past year



Snowflake Analysis

Undervalued with adequate balance sheet.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 2345 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.4%

2345

4.6%

HK Machinery

1.7%

HK Market


1 Year Return

-34.5%

2345

24.7%

HK Machinery

-2.9%

HK Market

Return vs Industry: 2345 underperformed the Hong Kong Machinery industry which returned 24.7% over the past year.

Return vs Market: 2345 underperformed the Hong Kong Market which returned -2.9% over the past year.


Shareholder returns

2345IndustryMarket
7 Day1.4%4.6%1.7%
30 Day-8.6%-2.1%-4.8%
90 Day-6.3%12.1%3.4%
1 Year-31.4%-34.5%28.4%24.7%0.7%-2.9%
3 Year-49.0%-52.6%63.5%53.1%15.3%3.6%
5 Year-38.5%-45.2%64.9%50.6%15.9%-3.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Shanghai Prime Machinery 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: 2345 (HK$0.74) is trading below our estimate of fair value (HK$2.53)

Significantly Below Fair Value: 2345 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 2345 is good value based on its PE Ratio (5x) compared to the Machinery industry average (10.1x).

PE vs Market: 2345 is good value based on its PE Ratio (5x) compared to the Hong Kong market (10.1x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 2345's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 2345 is good value based on its PB Ratio (0.3x) compared to the HK Machinery industry average (1x).


Next Steps

Future Growth

How is Shanghai Prime Machinery forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

13.6%

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 Shanghai Prime Machinery 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 Shanghai Prime Machinery performed over the past 5 years?

19.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 2345 has high quality earnings.

Growing Profit Margin: 2345's current net profit margins (2.4%) are lower than last year (3.2%).


Past Earnings Growth Analysis

Earnings Trend: 2345's earnings have grown by 19.1% per year over the past 5 years.

Accelerating Growth: 2345's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 2345 had negative earnings growth (-25.6%) over the past year, making it difficult to compare to the Machinery industry average (7.3%).


Return on Equity

High ROE: 2345's Return on Equity (4.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Shanghai Prime Machinery's financial position?


Financial Position Analysis

Short Term Liabilities: 2345's short term assets (CN¥5.6B) exceed its short term liabilities (CN¥3.7B).

Long Term Liabilities: 2345's short term assets (CN¥5.6B) exceed its long term liabilities (CN¥2.1B).


Debt to Equity History and Analysis

Debt Level: 2345's debt to equity ratio (63.1%) is considered high.

Reducing Debt: 2345's debt to equity ratio has increased from 18.7% to 63.1% over the past 5 years.

Debt Coverage: 2345's debt is well covered by operating cash flow (25.4%).

Interest Coverage: 2345's interest payments on its debt are well covered by EBIT (3.1x coverage).


Balance Sheet

Inventory Level: 2345 has a high level of physical assets or inventory.

Debt Coverage by Assets: 2345's debt is covered by short term assets (assets are 2.1x debt).


Next Steps

Dividend

What is Shanghai Prime Machinery's current dividend yield, its reliability and sustainability?

6.16%

Current Dividend Yield


Dividend Yield vs Market

company6.2%marketbottom25%2.3%markettop25%6.3%industryaverage2.5%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: 2345's dividend (6.16%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.27%).

High Dividend: 2345's dividend (6.16%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.34%).


Stability and Growth of Payments

Stable Dividend: 2345's dividend payments have been volatile in the past 10 years.

Growing Dividend: 2345's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (30.5%), 2345'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?

3.4yrs

Average management tenure


CEO

Jianhui Gou (56yo)

1.4yrs

Tenure

0

Mr. Gou Jianhui has been Chief Executive Officer and Executive Director at Shanghai Prime Machinery Company Limited since September 25, 2018 and June 14, 2019 respectively. Mr. Jianhui Gou serves as the Pr ...


Leadership Team

NamePositionTenureCompensationOwnership
Zhiyan Zhou
Chairman4.3yrsCN¥1.59m0.0091% CN¥117.5k
Yuman Xiao
Executive Director3.2yrsCN¥1.34mno data
Mingjie Zhang
Executive Director1.7yrsno datano data
Jianhui Gou
CEO & Executive Director1.4yrsno datano data
Kwong Ng
CFO & Company Secretary3.4yrsno datano data
Wenpei Si
Executive Director0.7yrsno datano data

3.4yrs

Average Tenure

55yo

Average Age

Experienced Management: 2345's management team is considered experienced (3.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Zhiyan Zhou
Chairman4.3yrsCN¥1.59m0.0091% CN¥117.5k
Yuman Xiao
Executive Director3.2yrsCN¥1.34mno data
Mingjie Zhang
Executive Director1.7yrsno datano data
Jianhui Gou
CEO & Executive Director1.4yrsno datano data
Wenpei Si
Executive Director0.7yrsno datano data
Oi Fat Chan
Independent Non-Executive Director5.7yrsCN¥151.00kno data
Hong Ling
Independent Non-Executive Director9.8yrsCN¥150.00kno data
Yeshun Dong
Non-Executive Director3.8yrsCN¥150.00kno data
Zechang Sun
Independent Non-Executive Director3.8yrsCN¥150.00kno data
Yan Zhang
Chairman of Supervisors0.7yrsno datano data

3.5yrs

Average Tenure

55.5yo

Average Age

Experienced Board: 2345's board of directors are considered experienced (3.5 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.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 10.2%.


Top Shareholders

Company Information

Shanghai Prime Machinery Company Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Shanghai Prime Machinery Company Limited
  • Ticker: 2345
  • Exchange: SEHK
  • Founded: 2005
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: HK$1.294b
  • Shares outstanding: 1.73b
  • Website: https://www.pmcsh.com

Number of Employees


Location

  • Shanghai Prime Machinery Company Limited
  • 2747 Songhuajiang Road
  • Hongkou District
  • Shanghai
  • 200437
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
2345SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares-Foreign ListedHKHKDApr 2006
R4PDB (Deutsche Boerse AG)YesForeign Shares-Foreign ListedDEEURApr 2006

Biography

Shanghai Prime Machinery Company Limited, together with its subsidiaries, engages in the design, manufacture, and sale of turbine blades, bearings, fasteners, cutting tools and accessories, and other products in the People’s Republic of China and internationally. The company also manufactures and sells bolts, machines, and other ancillary appliances; trades in fasteners; and offers research and development, and quality testing services for fasteners and related equipment, as well as financing services. It serves automotive, aerospace, energy, and railway industries, as well as in various industrial application and service markets. The company was founded in 2005 and is headquartered in Shanghai, the People’s Republic of China. Shanghai Prime Machinery Company Limited is a subsidiary of Shanghai Electric Group Company Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 12:46
End of Day Share Price2020/02/17 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.