SINOPEC Engineering (Group)

SEHK:2386

Snowflake Description

Excellent balance sheet and good value.

The Snowflake is generated from 30 checks in 5 different areas, read more below.

2386

SEHK

HK$27B

Market Cap

Add to portfolio

Last updated 2019/07/22 01:31

Company description

SINOPEC Engineering (Group) Co., Ltd., together with its subsidiaries, provides EPC contracting services in the People’s Republic of China. The last earnings update was 132 days ago. More info.

Find similar companies

Add to Portfolio Compare Print

SINOPEC Engineering (Group) has significant price volatility in the past 3 months.

2386 Share Price and Events

7 Day Returns

-3.3%

SEHK:2386

0.9%

HK Construction

0.8%

HK Market

1 Year Returns

-23.2%

SEHK:2386

-10.9%

HK Construction

-4.4%

HK Market

2386 Shareholder Return

	7 Day	30 Day	90 Day	1 Year	3 Year	5 Year
SINOPEC Engineering (Group) (2386)	-3.3%	-10.9%	-17.5%	-23.2%	-9.1%	-30%
HK Construction	0.9%	-5.5%	-13.3%	-10.9%	-21.1%	-4.4%
HK Market	0.8%	0.3%	-7.4%	-4.4%	17.8%	1.7%

1 Year Return vs Industry and Market

2386 underperformed the Construction industry which returned -10.9% over the past year.
2386 underperformed the Market in Hong Kong which returned -4.4% over the past year.

Price Volatility

2386

Industry

5yr Volatility vs Market

Related Companies

Sorry, no analysis for SINOPEC Engineering (Group)'s competitors could be found in our database.

2386 Value

Is SINOPEC Engineering (Group) undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.

INTRINSIC VALUE BASED ON FUTURE CASH FLOWS

Here we compare the current share price of SINOPEC Engineering (Group) to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.

Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for SINOPEC Engineering (Group).

SEHK:2386 Discounted Cash Flow Data Sources
Data Point	Source	Value
Valuation Model		2 Stage Free Cash Flow to Equity
Levered Free Cash Flow	Average of 11 Analyst Estimates (S&P Global)	See below
Discount Rate (Cost of Equity)	See below	8.2%
Perpetual Growth Rate	10-Year HK Government Bond Rate	2%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for SEHK:2386
Data Point	Calculation/ Source	Result
Risk-Free Rate	10-Year HK Govt Bond Rate	2%
Equity Risk Premium	S&P Global	6%
Construction Unlevered Beta	Simply Wall St/ S&P Global	1.04
Re-levered Beta	= Unlevered beta (1 + (1- tax rate) (Debt/Equity)) = 1.036 (1 + (1- 25%) (1.62%))	1.033
Levered Beta	Levered Beta limited to 0.8 to 2.0 (practical range for a stable firm)	1.03
Discount Rate/ Cost of Equity	= Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium) = 2% + (1.033 * 5.96%)	8.16%

Discounted Cash Flow Calculation for SEHK:2386 using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for SINOPEC Engineering (Group) is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

SEHK:2386 DCF 1st Stage: Next 10 year cash flow forecast
	Levered FCF (CNY, Millions)	Source	Present Value Discounted (@ 8.16%)
2020	4,297.00	Analyst x2	3,972.88
2021	5,443.00	Analyst x1	4,652.85
2022	5,486.78	Est @ 0.8%	4,336.49
2023	5,550.65	Est @ 1.16%	4,056.07
2024	5,629.23	Est @ 1.42%	3,803.21
2025	5,718.84	Est @ 1.59%	3,572.32
2026	5,816.93	Est @ 1.72%	3,359.51
2027	5,921.72	Est @ 1.8%	3,162.06
2028	6,031.98	Est @ 1.86%	2,977.99
2029	6,146.85	Est @ 1.9%	2,805.80
Present value of next 10 years cash flows			CN¥36,699.18

SEHK:2386 DCF 2nd Stage: Terminal Value
	Calculation	Result
Terminal Value	= FCF₂₀₂₉ × (1 + g) ÷ (Discount Rate – g) = CN¥6,146.85 × (1 + 2%) ÷ (8.16% – 2%)	CN¥101,863.80
Present Value of Terminal Value	= Terminal Value ÷ (1 + r)¹⁰ = CN¥101,863.80 ÷ (1 + 8.16%)¹⁰	CN¥46,496.83

SEHK:2386 Total Equity Value
	Calculation	Result
Total Equity Value	= Present value of next 10 years cash flows + Terminal Value = CN¥36,699.18 + CN¥46,496.83	CN¥83,196.02
Equity Value per Share (CNY)	= Total value / Shares Outstanding = CN¥83,196.02 / 4,428.00	CN¥18.79

SEHK:2386 Discount to Share Price
	Calculation	Result
Exchange Rate	CNY/HKD (Reporting currency to currency of SEHK:2386)	1.135
Value per Share (HKD)	= Value per Share in CNY x Exchange Rate (CNY/HKD) = CN¥18.79 x 1.135	HK$21.32
Value per share (HKD)	From above.	HK$21.32
Current discount	Discount to share price of HK$6.07 = -1 x (HK$6.07 - HK$21.32) / HK$21.32	71.5%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

Current Discount

Amount off the current price SINOPEC Engineering (Group) is available for.

^>50%

Share price is HK$6.07 vs Future cash flow value of HK$21.32

Current Discount Checks

For SINOPEC Engineering (Group) to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.

SINOPEC Engineering (Group)'s share price is below the future cash flow value, and at a moderate discount (> 20%).
SINOPEC Engineering (Group)'s share price is below the future cash flow value, and at a substantial discount (> 40%).

PRICE RELATIVE TO MARKET

We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for SINOPEC Engineering (Group)'s earnings, growth and assets is considered below, and whether this is a fair price.

Price based on past earnings

Are SINOPEC Engineering (Group)'s earnings available for a low price, and how does this compare to other companies in the same industry?

Raw Data

SEHK:2386 PE (Price to Earnings) Ratio Data Sources
Data Point	Source	Value
Earnings Per Share *	Company Filings (2018-12-31) in CNY	CN¥0.38
SEHK:2386 Share Price **	SEHK (2019-07-19) in HKD	HK$6.07
SEHK:2386 Share Price converted to CNY reporting currency	Exchange rate (HKD/ CNY) 0.881	CN¥5.35
Hong Kong Construction Industry PE Ratio	Median Figure of 105 Publicly-Listed Construction Companies	10.2x
Hong Kong Market PE Ratio	Median Figure of 1,512 Publicly-Listed Companies	10.77x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of SINOPEC Engineering (Group).

SEHK:2386 PE (Price to Earnings) Ratio Calculation
	Calculation	Outcome
PE Ratio	= SEHK:2386 Share Price ÷ EPS (both in CNY) = 5.35 ÷ 0.38	14.1x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

SINOPEC Engineering (Group) is overvalued based on earnings compared to the HK Construction industry average.
SINOPEC Engineering (Group) is overvalued based on earnings compared to the Hong Kong market.

Price based on expected Growth

Does SINOPEC Engineering (Group)'s expected growth come at a high price?

Raw Data

SEHK:2386 PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point	Source	Value
PE Ratio	See PE Ratio Section	14.1x
Net Income Annual Growth Rate	See Future Growth Section. Line of Best Fit* through Consensus Estimate Earnings of 11 Analysts	20%per year
Hong Kong Construction Industry PEG Ratio	Median Figure of 10 Publicly-Listed Construction Companies	0.56x
Hong Kong Market PEG Ratio	Median Figure of 481 Publicly-Listed Companies	0.8x

*Line of best fit is calculated by linear regression .

SEHK:2386 PEG (Price to Earnings to Growth) Ratio Calculation
	Calculation	Outcome
PEG Ratio	= PE Ratio ÷ Net Income Annual Growth Rate = 14.1x ÷ 20%	0.7x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

SINOPEC Engineering (Group) is good value based on expected growth next year.

Price based on value of assets

What value do investors place on SINOPEC Engineering (Group)'s assets?

Raw Data

SEHK:2386 PB (Price to Book) Ratio Data Sources
Data Point	Source	Value
Book Value per Share	Company Filings (2018-12-31) in CNY	CN¥5.87
SEHK:2386 Share Price *	SEHK (2019-07-19) in HKD	HK$6.07
SEHK:2386 Share Price converted to CNY reporting currency	Exchange rate (HKD/ CNY) 0.881	CN¥5.35
Hong Kong Construction Industry PB Ratio	Median Figure of 136 Publicly-Listed Construction Companies	1.37x
Hong Kong Market PB Ratio	Median Figure of 2,198 Publicly-Listed Companies	0.92x

SEHK:2386 PB (Price to Book) Ratio Calculation
	Calculation	Outcome
PB Ratio	= SEHK:2386 Share Price ÷ Book Value per Share (both in CNY) = 5.35 ÷ 5.87	0.91x

* Primary Listing of SINOPEC Engineering (Group).

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

SINOPEC Engineering (Group) is good value based on assets compared to the HK Construction industry average.

Show me more potentially undervalued companies in the Construction industry

Value checks

We assess SINOPEC Engineering (Group)'s value by looking at:

Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
Is the PE ratio less than the market average, and/ or less than the Construction industry average (and greater than 0)? (2 checks)
Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
Is the PB ratio less than the Construction industry average (and greater than 0)? (1 check)

Full details on the Value part of the Simply Wall St company analysis model.

2386 Future Performance

How is SINOPEC Engineering (Group) expected to perform in the next 1 to 3 years based on estimates from 11 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!

20%

Expected annual growth in earnings.

Earnings growth vs Low Risk Savings

Is SINOPEC Engineering (Group) expected to grow at an attractive rate?

SINOPEC Engineering (Group)'s earnings growth is expected to exceed the low risk savings rate of 2%.

Growth vs Market Checks

SINOPEC Engineering (Group)'s earnings growth is expected to exceed the Hong Kong market average.
SINOPEC Engineering (Group)'s revenue growth is positive but not above the Hong Kong market average.

Annual Growth Rates Comparison

Raw Data

SEHK:2386 Future Growth Rates Data Sources
Data Point	Source	Value (per year)
SEHK:2386 Future Earnings Growth Rate	Line of Best Fit* through Consensus Estimate Earnings of 11 Analysts	20%
SEHK:2386 Future Revenue Growth Rate	Line of Best Fit* through Consensus Estimate Revenue of 11 Analysts	6.9%
Hong Kong Construction Industry Earnings Growth Rate	Market Cap Weighted Average	11.8%
Hong Kong Construction Industry Revenue Growth Rate	Market Cap Weighted Average	9.6%
Hong Kong Market Earnings Growth Rate	Market Cap Weighted Average	11.4%
Hong Kong Market Revenue Growth Rate	Market Cap Weighted Average	10.5%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations

Raw Data

SEHK:2386 Analysts Growth Expectations Data Sources
Data Point	Source	Value
Past Financials	Company Filings (6 months ago)	See Below
Future Estimates	Average of up to 11 Analyst Estimates (S&P Global)	See Below

All numbers in CNY Millions and using Trailing twelve months (TTM) annual period rather than quarterly.

SEHK:2386 Future Estimates Data
Date (Data in CNY Millions)	Revenue	Cash Flow	Net Income *	Avg. No. Analysts
2021-12-31	58,029	4,002	3,298	8
2020-12-31	54,214	4,458	3,194	11
2019-12-31	51,121	4,143	2,806	10

SEHK:2386 Past Financials Data
Date (Data in CNY Millions)	Revenue	Cash Flow	Net Income *
2018-12-31	47,019	6,104	1,679
2018-09-30	43,900	5,024	1,541
2018-06-30	40,780	3,944	1,403
2018-03-31	38,494	4,092	1,266
2017-12-31	36,209	4,241	1,130
2017-09-30	35,820	4,682	1,278
2017-06-30	35,432	5,124	1,427
2017-03-31	37,417	4,898	1,549
2016-12-31	39,402	4,671	1,671
2016-09-30	40,852	4,180	2,175
2016-06-30	42,328	3,838	2,686
2016-03-31	43,913	4,815	3,002

*GAAP earnings excluding extraordinary items.

High Growth Checks

SINOPEC Engineering (Group)'s earnings are expected to grow by 20% yearly, however this is not considered high growth (20% yearly).
SINOPEC Engineering (Group)'s revenue is expected to grow by 6.9% yearly, however this is not considered high growth (20% yearly).

Past and Future Earnings per Share

The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.

Raw Data

SEHK:2386 Past and Future Earnings per Share
Data Point	Source	Value
Past Financials	Company Filings (6 months ago)	See Below
Future Estimates	Average of up to 11 Analyst Estimates (S&P Global)	See Below

All data from SINOPEC Engineering (Group) Company Filings, last reported 6 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

SEHK:2386 Future Estimates Data
Date (Data in CNY Millions)	EPS *	EPS High Estimate	EPS Low Estimate	Avg. No. Analysts
2021-12-31	0.75	0.87	0.66	6.00
2020-12-31	0.72	0.89	0.56	8.00
2019-12-31	0.65	0.73	0.52	8.00

SEHK:2386 Past Financials Data
Date (Data in CNY Millions)	EPS *
2018-12-31	0.38
2018-09-30	0.35
2018-06-30	0.32
2018-03-31	0.29
2017-12-31	0.26
2017-09-30	0.29
2017-06-30	0.32
2017-03-31	0.35
2016-12-31	0.38
2016-09-30	0.49
2016-06-30	0.61
2016-03-31	0.68

*GAAP earnings excluding extraordinary items.

Performance in 3 years

In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.

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

Future performance checks

We assess SINOPEC Engineering (Group)'s future performance by looking at:

Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
Is the annual earnings growth rate expected to beat the average growth rate in earnings of the Hong Kong market? (1 check)
Is the annual revenue growth rate expected to beat the average growth rate in revenue of the Hong Kong market? (1 check)
Is the annual earnings growth rate expected to be above 20%? (1 check)
Is the annual revenue growth rate expected to be above 20%? (1 check)
Is the Return on Equity in 3 years expected to be over 20%? (1 check)

Some of the above checks will fail if the company is expected to be loss making in the relevant year.
SINOPEC Engineering (Group) has a total score of 2/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

2386 Past Performance

How has SINOPEC Engineering (Group) performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.

Past earnings growth

Below we compare SINOPEC Engineering (Group)'s growth in the last year to its industry (Construction).

Past Earnings growth analysis

We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.

SINOPEC Engineering (Group)'s year on year earnings growth rate was negative over the past 5 years and the most recent earnings are below average.
SINOPEC Engineering (Group)'s 1-year earnings growth exceeds its 5-year average (48.6% vs -23.2%)
SINOPEC Engineering (Group)'s earnings growth has exceeded the HK Construction industry average in the past year (48.6% vs -13.1%).

Earnings and Revenue History

SINOPEC Engineering (Group)'s revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.

Raw Data

All data from SINOPEC Engineering (Group) Company Filings, last reported 6 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

SEHK:2386 Past Revenue, Cash Flow and Net Income Data
Date (Data in CNY Millions)	Revenue	Net Income *	G+A Expenses	R&D Expenses
2018-12-31	47,019.02	1,679.47	1,518.82	1,675.69
2018-09-30	43,899.60	1,541.07	1,446.08	1,377.32
2018-06-30	40,780.18	1,402.66	1,373.34	1,078.96
2018-03-31	38,494.45	1,266.32	1,372.28	1,040.93
2017-12-31	36,208.72	1,129.97	1,371.22	1,002.91
2017-09-30	35,820.33	1,278.31	1,387.36	1,046.98
2017-06-30	35,431.95	1,426.64	1,403.50	1,091.05
2017-03-31	37,417.14	1,548.76	1,372.42	1,102.07
2016-12-31	39,402.33	1,670.89	1,341.35	1,113.08
2016-09-30	40,851.79	2,174.51	1,293.09	1,118.59
2016-06-30	42,328.15	2,686.15	1,245.34	1,124.10
2016-03-31	43,913.25	3,001.92	1,275.93	1,154.53
2015-12-31	45,498.35	3,317.70	1,306.53	1,184.96
2015-09-30	46,549.77	3,320.35	1,331.51	1,133.31
2015-06-30	47,601.18	3,323.00	1,356.49	1,081.67
2015-03-31	48,473.57	3,406.40	1,355.10	1,007.96
2014-12-31	49,345.96	3,489.80	1,353.71	934.25
2014-09-30	47,961.09	3,404.97	1,344.84	810.71
2014-06-30	46,576.23	3,320.15	1,335.96	687.17
2014-03-31	45,074.04	3,488.47	1,313.09	658.43
2013-12-31	43,571.85	3,656.80	1,290.23	629.70
2013-09-30	42,427.68	3,594.70	1,204.74	611.96
2013-06-30	41,283.51	3,532.60	1,119.25	594.22
2013-03-31	39,905.00	3,424.79	1,137.72	570.89
2012-12-31	38,526.49	3,316.97	1,156.18	547.56

*GAAP earnings excluding extraordinary items.

Performance last year

We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.

SINOPEC Engineering (Group) has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
SINOPEC Engineering (Group) used its assets less efficiently than the HK Construction industry average last year based on Return on Assets.
SINOPEC Engineering (Group)'s use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).

Past performance checks

We assess SINOPEC Engineering (Group)'s performance over the past 5 years by checking for:

Has earnings increased in past 5 years? (1 check)
Has the earnings growth in the last year exceeded that of the Construction industry? (1 check)
Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
Is the Return on Equity (ROE) higher than 20%? (1 check)
Is the Return on Assets (ROA) above industry average? (1 check)
Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)

The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
SINOPEC Engineering (Group) has a total score of 2/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

2386 Health

How is SINOPEC Engineering (Group)'s financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up SINOPEC Engineering (Group)'s finances.

The net worth of a company is the difference between its assets and liabilities.

Net Worth

SINOPEC Engineering (Group) is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
SINOPEC Engineering (Group)'s cash and other short term assets cover its long term commitments.

Balance sheet

This treemap shows a more detailed breakdown of SINOPEC Engineering (Group)'s finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.

Assets

Liabilities and shares

The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.

Low level of unsold assets.
Debt is covered by short term assets, assets are 166.1x debt.

Historical Debt

Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.

Raw Data

All data from SINOPEC Engineering (Group) Company Filings, last reported 6 months ago.

SEHK:2386 Past Debt and Equity Data
Date (Data in CNY Millions)	Total Equity	Total Debt	Cash & Short Term Investments
2018-12-31	25,983.15	384.34	19,155.72
2018-09-30	25,983.15	384.34	19,155.72
2018-06-30	25,940.71	569.03	14,493.39
2018-03-31	25,940.71	569.03	14,493.39
2017-12-31	25,591.01	431.26	16,089.23
2017-09-30	25,591.01	431.26	16,089.23
2017-06-30	25,707.10	243.88	12,898.87
2017-03-31	25,707.10	243.88	12,898.87
2016-12-31	25,265.11	0.00	14,153.71
2016-09-30	25,201.92	0.00	14,115.63
2016-06-30	24,910.65	0.00	10,367.18
2016-03-31	24,910.65	0.00	10,367.18
2015-12-31	24,638.51	0.00	13,197.21
2015-09-30	24,638.51	0.00	13,197.21
2015-06-30	23,735.72	0.00	10,705.83
2015-03-31	23,735.72	0.00	10,705.83
2014-12-31	22,872.57	0.00	9,726.91
2014-09-30	22,872.57	0.00	9,726.91
2014-06-30	21,897.32	0.00	10,317.83
2014-03-31	21,897.32	0.00	10,317.83
2013-12-31	20,980.34	0.00	10,969.90
2013-09-30	20,980.34	0.00	10,969.90
2013-06-30	19,910.43	0.00	14,625.80
2013-03-31	19,910.43	0.00	14,625.80
2012-12-31	7,081.25	157.14	4,883.26

SINOPEC Engineering (Group)'s level of debt (1.5%) compared to net worth is satisfactory (less than 40%).
The level of debt compared to net worth has increased over the past 5 years (0% vs 1.5% today).
Debt is well covered by operating cash flow (1588.2%, greater than 20% of total debt).
SINOPEC Engineering (Group) earns more interest than it pays, coverage of interest payments is not a concern.

Show me more healthy companies in the Construction industry

Financial health checks

We assess SINOPEC Engineering (Group)'s financial health by checking for:

Are short term assets greater than short term liabilities? (1 check)
Are short term assets greater than long term liabilities? (1 check)
Has the debt to equity ratio increased in the past 5 years? (1 check)
Is the debt to equity ratio over 40%? (1 check)
Is the debt covered by operating cash flow? (1 check)
Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)

For companies that are loss making and have been so on average in the past we replace the last 2 checks with:

Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)

Full details on the Health part of the Simply Wall St company analysis model.

2386 Dividends

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

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.

Annual Dividend Income

4.19%

Current annual income from SINOPEC Engineering (Group) dividends. Estimated to be 6.4% next year.

If you bought HK$2,000 of SINOPEC Engineering (Group) shares you are expected to receive HK$84 in your first year as a dividend.

Dividend Amount

Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?

SINOPEC Engineering (Group)'s pays a higher dividend yield than the bottom 25% of dividend payers in Hong Kong (2.07%).
SINOPEC Engineering (Group)'s dividend is below the markets top 25% of dividend payers in Hong Kong (5.71%).

Annualized Historical and Future Dividends

It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.

Raw Data

SEHK:2386 Annualized Past and Future Dividends
Data Point	Source	Value
Past Annualized Dividend Yield	S&P Global Market Data	See Below
Past Dividends per Share	Company Filings/ Annualized Dividend Payments	See Below
Future Dividends per Share Estimates	Average of up to 11 Analyst Estimates (S&P Global)	See Below
Hong Kong Construction Industry Average Dividend Yield	Market Cap Weighted Average of 43 Stocks	3.9%
Hong Kong Market Average Dividend Yield	Market Cap Weighted Average of 978 Stocks	3.6%
Hong Kong Minimum Threshold Dividend Yield	10th Percentile	1.2%
Hong Kong Bottom 25% Dividend Yield	25th Percentile	2.1%
Hong Kong Top 25% Dividend Yield	75th Percentile	5.7%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

SEHK:2386 Future Dividends Estimate Data
Date (Data in CN¥)	Dividend per Share (annual)	Avg. No. Analysts
2021-12-31	0.39	8.00
2020-12-31	0.34	11.00
2019-12-31	0.31	11.00

SEHK:2386 Past Annualized Dividends Data
Date (Data in CN¥)	Dividend per share (annual)	Avg. Yield (%)
2019-03-11	0.224	3.690
2018-08-21	0.244	3.759
2018-03-19	0.200	3.055
2017-03-20	0.150	2.450
2016-03-21	0.297	5.100
2015-08-31	0.301	5.663
2015-03-30	0.312	5.391
2014-08-18	0.315	5.891
2014-03-17	0.380	5.431
2013-09-09	0.268	3.234

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

SINOPEC Engineering (Group) has been paying a dividend for less than 10 years and during this time payments have been volatile (annual drop of over 20%).
SINOPEC Engineering (Group) has only been paying a dividend for 6 years, and since then dividends per share have fallen.

Current Payout to shareholders

What portion of SINOPEC Engineering (Group)'s earnings are paid to the shareholders as a dividend.

Dividends paid are covered by earnings (1.7x coverage).

Future Payout to shareholders

Dividends after 3 years are expected to be well covered by earnings (2.1x coverage).

Income/ dividend checks

We assess SINOPEC Engineering (Group)'s dividend by checking for:

Firstly is the company paying a notable dividend (greater than 1.2%) - if not then the rest of the checks are ignored.
Is current dividend yield above the bottom 25% of dividend payers? (1 check)
Is current dividend yield above the top 25% of dividend payers? (1 check)
Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
If they have paid a dividend for 10 years has it increased in this time? (1 check)
How sustainable is the dividend, can SINOPEC Engineering (Group) afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)

Full details on the Dividends part of the Simply Wall St company analysis model.

2386 Management

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

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.

CEO

Wenwu Xiang

COMPENSATION	CN¥1,100,000
AGE	53
TENURE AS CEO	2.5 years

CEO Bio

Mr. Wenwu Xiang has been an Executive Director of Sinopec Engineering (Group) Co., Ltd. since February 21, 2017. Mr. Xiang has been the President of Sinopec Engineering (Group) Co., Ltd. (Alternate Names, Sinopec Fuel Oil) since January 5, 2017 and served as its Vice President from August 24, 2012 to January 5, 2017. Mr. Xiang served as General Manager and Executive Director of Sinopec Nanjing Engineering & Construction Incorporation from April 2012 to November 2014. He was a director and general manager of Sinopec Nanjing Engineering & Construction Incorporation from December 2009 to April 2012. Mr. Xiang worked in the Mechanical Engineering Office of China Petrochemical Corporation Second Construction Company (China Petrochemical Corporation SCC) from July 1988 to September 1993. He served as deputy chief accountant of China Petrochemical Corporation SCC from August 1995 to May 1998; deputy manager of the First Engineering Company of China Petrochemical Corporation SCC from November 1997 to February 1999; deputy chief economist of China Petrochemical Corporation SCC from May 1998 to June 1999; manager of marketing division of Sinopec Group Second Construction Company (Sinopec Group SCC) from February 1999 to June 1999; deputy manager of Sinopec Group Second Construction Company from June 1999 to March 2004; manager of Sinopec Group Second Construction Company from March 2004 to December 2008; general manager of Sinopec Group Second Construction Company from December 2008 to July 2010; and general manager of Sinopec Group Nanjing from December 2009 to April 2012. He served as Executive Director of Sinopec Group Nanjing from December 2009 to April 2012. Mr. Xiang was recognized as a professor-level senior economist by Sinopec Group in December 2003. Mr. Xiang graduated from Dalian Railway University with a Bachelor's degree in Engineering for locomotive and device in July 1988 and obtained an MBA degree from Dalian University of Technology in August 1996 and received a Doctorate (Ph.D.) degree in System Engineering from Southeast University in November 2007.

CEO Compensation

Wenwu's compensation has been consistent with company performance over the past year, both up more than 20%.
Wenwu's remuneration is lower than average for companies of similar size in Hong Kong.

Management Team Tenure

Average tenure and age of the SINOPEC Engineering (Group) management team in years:

2.5

Average Tenure

Average Age

The tenure for the SINOPEC Engineering (Group) management team is about average.

Management Team

Wenwu Xiang

50

TENURE

0.8 yrs

Yiqun Jia

TITLE

CFO & Company Secretary

AGE

51

TENURE

6.9 yrs

Yi Wang

TITLE

Head of the Finance Department

Board of Directors Tenure

Average tenure and age of the SINOPEC Engineering (Group) board of directors in years:

2.4

Average Tenure

54.5

Average Age

The average tenure for the SINOPEC Engineering (Group) board of directors is less than 3 years, this suggests a new board.

Board of Directors

Baocai Yu

TITLE

Chairman of the Board

AGE

54

TENURE

0.8 yrs

Wenwu Xiang

TITLE

President & Executive Director

COMPENSATION

CN¥1M

AGE

53

TENURE

TITLE

Chairman of the Supervisory Committee

AGE

54

TENURE

2.2 yrs

Yong Jin

TITLE

Independent Non-Executive Director

COMPENSATION

CN¥183K

AGE

84

TENURE

6.3 yrs

Wenxin Wu

TITLE

Non-Executive Director

AGE

55

TENURE

0.8 yrs

Who owns this company?

Recent Insider Trading

No 3 month individual insider trading information.

Recent Insider Transactions

Announced	Type	Name	Entity	Start	End	Shares	Max Price (HK$)	Value (HK$)
27. Jun 19	Sell	FMR LLC	Company	24. Jun 19	24. Jun 19	-237,000	HK$6.82	HK$-1,615,273
21. Jun 19	Sell	FIL Limited	Company	18. Jun 19	18. Jun 19	-1,319,000	HK$6.62	HK$-8,725,714
16. May 19	Buy	FMR LLC	Company	10. May 19	10. May 19	1,015,500	HK$7.16	HK$7,275,553
20. May 19	Buy	FIL Limited	Company	15. May 19	15. May 19	1,026,000	HK$6.90	HK$7,077,248
13. May 19	Sell	JPMorgan Chase & Co, Brokerage and Securities Investments	Company	08. May 19	08. May 19	-4,505,106	HK$7.30	HK$-32,873,774
10. May 19	Buy	JPMorgan Chase & Co, Brokerage and Securities Investments	Company	07. May 19	07. May 19	4,121,863	HK$7.25	HK$29,868,261
02. May 19	Sell	JPMorgan Chase & Co, Brokerage and Securities Investments	Company	26. Apr 19	26. Apr 19	-5,731,056	HK$7.55	HK$-43,274,643
30. Apr 19	Buy	JPMorgan Chase & Co, Brokerage and Securities Investments	Company	25. Apr 19	25. Apr 19	5,971,399	HK$7.57	HK$45,200,486
12. Apr 19	Sell	Eastspring Investments (Singapore) Limited	Company	10. Apr 19	10. Apr 19	-871,000	HK$7.58	HK$-6,598,175
09. Apr 19	Buy	FIL Limited	Company	03. Apr 19	03. Apr 19	5,421,500	HK$7.92	HK$42,959,411
19. Mar 19	Buy	FIL Limited	Company	14. Mar 19	14. Mar 19	1,160,500	HK$7.52	HK$8,726,615
06. Mar 19	Sell	FIL Limited	Company	01. Mar 19	01. Mar 19	-2,220,500	HK$7.37	HK$-16,365,090
10. Jan 19	Buy	FIL Limited	Company	07. Jan 19	07. Jan 19	270,500	HK$6.84	HK$1,848,976
02. Jan 19	Buy	BlackRock, Inc.	Company	26. Dec 18	26. Dec 18	32,000	HK$6.19	HK$198,080
21. Dec 18	Sell	J.P. Morgan Asset Management, Inc.	Company	18. Dec 18	18. Dec 18	-664,499	HK$6.54	HK$-4,347,218
23. Nov 18	Sell	J.P. Morgan Asset Management, Inc.	Company	20. Nov 18	20. Nov 18	-1,453,261	HK$7.08	HK$-10,293,589
30. Oct 18	Buy	JPMorgan Chase & Co, Brokerage and Securities Investments	Company	25. Oct 18	25. Oct 18	241,935	HK$7.32	HK$1,771,545
29. Oct 18	Sell	J.P. Morgan Asset Management, Inc.	Company	24. Oct 18	24. Oct 18	-621,319	HK$7.71	HK$-4,792,666
11. Oct 18	Sell	FIL Limited	Company	08. Oct 18	08. Oct 18	-402,000	HK$8.55	HK$-3,436,578
12. Oct 18	Sell	Eastspring Investments (Singapore) Limited	Company	10. Oct 18	10. Oct 18	-643,000	HK$8.57	HK$-5,510,381
25. Sep 18	Buy	J.P. Morgan Asset Management, Inc.	Company	20. Sep 18	20. Sep 18	1,968,564	HK$8.23	HK$16,191,629
26. Sep 18	Sell	J.P. Morgan Asset Management, Inc.	Company	21. Sep 18	21. Sep 18	-1,317,345	HK$8.20	HK$-10,802,490
31. Aug 18	Sell	J.P. Morgan Asset Management, Inc.	Company	28. Aug 18	28. Aug 18	-1,170,181	HK$8.16	HK$-9,546,458
31. Aug 18	Sell	National Social Security Fund	Company	29. Aug 18	29. Aug 18	-100,000	HK$8.09	HK$-809,270
28. Aug 18	Buy	J.P. Morgan Asset Management, Inc.	Company	23. Aug 18	23. Aug 18	8,069,167	HK$7.78	HK$62,816,844
10. Aug 18	Sell	Eastspring Investments (Singapore) Limited	Company	07. Aug 18	07. Aug 18	-5,175,000	HK$8.08	HK$-41,839,871

Management checks

We assess SINOPEC Engineering (Group)'s management by checking for:

Is the CEO's compensation unreasonable compared to market cap? (1 check)
Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
Is the average tenure of the management team less than 2 years? (1 check)
Is the average tenure of the board of directors team less than 3 years? (1 check)

Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

2386 News

Simply Wall St News

What To Know Before Buying SINOPEC Engineering (Group) Co., Ltd. (HKG:2386) For Its Dividend

Historically, SINOPEC Engineering (Group) Co., Ltd. … Let's take a look at SINOPEC Engineering (Group) in more detail. … See our latest analysis for SINOPEC Engineering (Group)

Simply Wall St - 3 months ago – Full article

SINOPEC Engineering (Group) Co., Ltd. (HKG:2386) Is Trading At A 34.44% Discount

by projecting its future cash flows and then discounting them to today's value. … Discounted Cash Flows (DCF). … Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model

Simply Wall St - 6 months ago – Full article

Is SINOPEC Engineering (Group) Co., Ltd.'s (HKG:2386) Liquidity Good Enough?

Small-caps and large-caps are wildly popular among investors; however, mid-cap stocks, such as SINOPEC Engineering (Group) Co., Ltd. … Despite this, the two other categories have lagged behind the risk-adjusted returns of commonly ignored mid-cap stocks. … View our latest analysis for SINOPEC Engineering (Group)

Simply Wall St - 6 months ago – Full article

SINOPEC Engineering (Group) Co., Ltd. (HKG:2386): Commentary On Fundamentals

Today I've chosen to put the spotlight on SINOPEC Engineering (Group) Co., Ltd. … is a company that has been able to sustain great financial health, trading at an attractive share price. … report on SINOPEC Engineering (Group) here

Simply Wall St - 6 months ago – Full article

Read This Before Judging SINOPEC Engineering (Group) Co., Ltd.'s (HKG:2386) ROE

SINOPEC Engineering (Group) has a ROE of 5.4%, based on the last twelve months. … One way to conceptualize this, is that for each HK$1 of shareholders' equity it has, the company made HK$0.054 in profit. … View our latest analysis for SINOPEC Engineering (Group)?

Simply Wall St - 7 months ago – Full article

Could The SINOPEC Engineering (Group) Co Ltd (HKG:2386) Ownership Structure Tell Us Something Useful?

If you want to know who really controls SINOPEC Engineering (Group) Co Ltd (HKG:2386), then you'll have to look at the makeup of its share registry. … SINOPEC Engineering (Group) is a pretty big company. … See our latest analysis for SINOPEC Engineering (Group)

Simply Wall St - 7 months ago – Full article

Should You Be Tempted To Sell SINOPEC Engineering (Group) Co Ltd (HKG:2386) Because Of Its P/E Ratio?

SINOPEC Engineering (Group) has a price to earnings ratio of 21.22, based on the last twelve months. … How Do I Calculate SINOPEC Engineering (Group)'s Price To Earnings Ratio … Price to Earnings Ratio = Price per Share (in the reporting currency) ÷ Earnings per Share (EPS)

Simply Wall St - 8 months ago – Full article

How Does SINOPEC Engineering (Group) Co Ltd (HKG:2386) Fare As A Dividend Stock?

Historically, SINOPEC Engineering (Group) Co Ltd (HKG:2386) has paid a dividend to shareholders. … Does SINOPEC Engineering (Group) tick all the boxes of a great dividend stock? … View our latest analysis for SINOPEC Engineering (Group)

Simply Wall St - 8 months ago – Full article

SINOPEC Engineering (Group) Co Ltd (HKG:2386): A Look At Return On Capital

and want to better understand how you can grow your money by investing in SINOPEC Engineering (Group) Co Ltd (HKG:2386). … To understand SINOPEC Engineering (Group)’s capital returns we will look at a useful metric called return on capital employed. … SINOPEC Engineering (Group)'s Return On Capital Employed

Simply Wall St - 8 months ago – Full article

Why SINOPEC Engineering (Group) Co Ltd's (HKG:2386) ROE Of 5.4% Does Not Tell The Whole Story

SINOPEC Engineering (Group) Co Ltd (HKG:2386) generated a below-average return on equity of 5.4% in the past 12 months, while its industry returned 11.2%. … Knowing these components can change your views on 2386's below-average returns. … View our latest analysis for SINOPEC Engineering (Group)

Simply Wall St - 10 months ago – Full article

2386 Company Info

Description

SINOPEC Engineering (Group) Co., Ltd., together with its subsidiaries, provides EPC contracting services in the People’s Republic of China. It operates through four segments: Engineering, Consulting, and Licensing; EPC Contracting; Construction; and Equipment manufacturing. The Engineering, Consulting, and Licensing segment offers design, consulting, research and development, feasibility studies, and compliance certification services. The EPC Contracting segment provides integrated engineering, procurement, construction, maintenance, and project management services. The Construction segment offers infrastructure for oil refining and chemical industries, oil and gas storage, pipelines transportation, construction, renovation, expansion, repair and maintenance services, and large equipment lifting, as well as transportation services in construction projects. The Equipment manufacturing segment designs, develops, manufactures, and sells oil refining equipment and spare parts for oil refining and chemical facilities. SINOPEC Engineering (Group) Co., Ltd. also provides technical, technology development, and equipment selling and leasing services, as well as medicine, pesticide, and chemical research services. The company provides engineering services for a range of industries, such as oil refining, petrochemicals, new coal chemicals, inorganic chemicals, pharmaceutical chemicals, and clean energy, storage and transportation engineering, environmental protection, and energy saving. The company is headquartered in Beijing, China. SINOPEC Engineering (Group) Co., Ltd. is a subsidiary of China Petrochemical Corporation.

Details

Name:	SINOPEC Engineering (Group) Co., Ltd.
Ticker:	2386
Exchange:	SEHK
Founded:
Market Cap:	HK$26,877,960,000
Shares outstanding:	4,428,000,000
Website:	http://www.segroup.cn
Address:	SINOPEC Engineering (Group) Co., Ltd. Tower B, No.19, Anhuibeili, Beijing, 100101, China

Listings

Exchange Symbol	Ticker Symbol	Security	Exchange	Country	Currency	Listed on
SEHK	2386	Foreign Shares-Foreign Listed	The Stock Exchange of Hong Kong Ltd.	HK	HKD	23. May 2013
DB	1NS	Foreign Shares-Foreign Listed	Deutsche Boerse AG	DE	EUR	23. May 2013
SHSC	2386	Foreign Shares-Foreign Listed	Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect	HK	HKD	23. May 2013
SZSC	2386	Foreign Shares-Foreign Listed	The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect	HK	HKD	23. May 2013

Number of employees

Current staff

18,031

SINOPEC Engineering (Group) employees.

Industry

Industry:	Construction and Engineering
Sector:	Capital Goods

Company Analysis and Financial Data Status

Area	Date (UTC time)
Company Analysis updated:	2019/07/22 01:31
End of day share price update:	2019/07/19 00:00
Last estimates confirmation:	2019/07/19
Last earnings filing:	2019/03/12
Last earnings reported:	2018/12/31
Last annual earnings reported:	2018/12/31

All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

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.

Simply Wall Street Pty Ltd (ACN 600 056 611), is a Corporate Authorised Representative (Authorised Representative Number: 467183) of Sanlam Private Wealth Pty Ltd (AFSL No. 337927). Any advice contained in this website is general advice only and has been prepared without considering your objectives, financial situation or needs. You should not rely on any advice and/or information contained in this website and before making any investment decision we recommend that you consider whether it is appropriate for your situation and seek appropriate financial, taxation and legal advice. Please read our Financial Services Guide before deciding whether to obtain financial services from us.

Copyright © 2019, Standard & Poor’s Financial Services LLC. Reproduction of S&P Capital IQ in any form is prohibited except with the prior written permission of S&P. S&P does not guarantee the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions, regardless of the cause or for the results obtained from the use of such information. S&P DISCLAIMS ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE. In no event shall S&P be liable for any direct, indirect, special or consequential damages, costs, expenses, legal fees, or losses (including lost income or lost profit and opportunity costs) in connection with subscriber’s or others’ use of S&P Capital IQ. (2019)