SEHK:2386

Stock Analysis Report

SINOPEC Engineering (Group)

Executive Summary

SINOPEC Engineering (Group) Co., Ltd., together with its subsidiaries, provides engineering, procurement, and construction (EPC) contracting services.


Snowflake Analysis

Very undervalued with flawless balance sheet and pays a dividend.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 2386's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

0%

2386

1.7%

HK Construction

2.7%

HK Market


1 Year Return

-57.2%

2386

-33.7%

HK Construction

-19.8%

HK Market

Return vs Industry: 2386 underperformed the Hong Kong Construction industry which returned -33.7% over the past year.

Return vs Market: 2386 underperformed the Hong Kong Market which returned -19.8% over the past year.


Shareholder returns

2386IndustryMarket
7 Day0%1.7%2.7%
30 Day-3.6%-8.9%-7.2%
90 Day-32.3%-13.1%-12.1%
1 Year-55.3%-57.2%-30.2%-33.7%-16.9%-19.8%
3 Year-55.0%-59.4%-44.2%-50.1%0.9%-9.3%
5 Year-49.2%-58.4%-55.3%-61.8%-12.6%-26.7%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is SINOPEC Engineering (Group) undervalued compared to its fair value and its price relative to the market?

25.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 2386 (HK$3.23) is trading below our estimate of fair value (HK$4.31)

Significantly Below Fair Value: 2386 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 2386 is good value based on its PE Ratio (6x) compared to the Construction industry average (8.2x).

PE vs Market: 2386 is good value based on its PE Ratio (6x) compared to the Hong Kong market (9.5x).


Price to Earnings Growth Ratio

PEG Ratio: 2386 is good value based on its PEG Ratio (0.7x)


Price to Book Ratio

PB vs Industry: 2386 is good value based on its PB Ratio (0.5x) compared to the HK Construction industry average (0.9x).


Next Steps

Future Growth

How is SINOPEC Engineering (Group) forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

8.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2386's forecast earnings growth (8.9% per year) is above the savings rate (1.6%).

Earnings vs Market: 2386's earnings (8.9% per year) are forecast to grow slower than the Hong Kong market (11.8% per year).

High Growth Earnings: 2386's earnings are forecast to grow, but not significantly.

Revenue vs Market: 2386's revenue (4.6% per year) is forecast to grow slower than the Hong Kong market (9.8% per year).

High Growth Revenue: 2386's revenue (4.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 2386's Return on Equity is forecast to be low in 3 years time (9.2%).


Next Steps

Past Performance

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

-18.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 2386 has a high level of non-cash earnings.

Growing Profit Margin: 2386's current net profit margins (4.2%) are higher than last year (3.6%).


Past Earnings Growth Analysis

Earnings Trend: 2386's earnings have declined by -18.3% per year over the past 5 years.

Accelerating Growth: 2386's earnings growth over the past year (30%) exceeds its 5-year average (-18.3% per year).

Earnings vs Industry: 2386 earnings growth over the past year (30%) exceeded the Construction industry -15.1%.


Return on Equity

High ROE: 2386's Return on Equity (8%) is considered low.


Next Steps

Financial Health

How is SINOPEC Engineering (Group)'s financial position?


Financial Position Analysis

Short Term Liabilities: 2386's short term assets (CN¥60.6B) exceed its short term liabilities (CN¥37.8B).

Long Term Liabilities: 2386's short term assets (CN¥60.6B) exceed its long term liabilities (CN¥2.8B).


Debt to Equity History and Analysis

Debt Level: 2386 is debt free.

Reducing Debt: 2386 had no debt 5 years ago.

Debt Coverage: 2386 has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: 2386 has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

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

10.90%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: 2386's dividend (10.9%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.66%).

High Dividend: 2386's dividend (10.9%) is in the top 25% of dividend payers in the Hong Kong market (7.15%)


Stability and Growth of Payments

Stable Dividend: 2386 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 2386's dividend payments have increased, but the company has only paid a dividend for 7 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (64.9%), 2386's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 2386's dividends in 3 years are forecast to be covered by earnings (60.5% payout ratio).


Next Steps

Management

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

2.4yrs

Average management tenure


CEO

Wenwu Xiang (53yo)

3.25s

Tenure

CN¥1,373,000

Compensation

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,  ...


CEO Compensation Analysis

Compensation vs Market: Wenwu's total compensation ($USD194.89K) is below average for companies of similar size in the Hong Kong market ($USD555.81K).

Compensation vs Earnings: Wenwu's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Wenwu Xiang
President & Executive Director3.25yrsCN¥1.37mno data
Lili Sun
Employee Representative Director5.25yrsCN¥1.39mno data
Yingguan Zhou
Employee Representative Director1.5yrsCN¥1.00mno data
Renming Yu
Executive Chairman0.17yrno datano data
Yiqun Jia
CFO & Company Secretary7.67yrsno datano data
Yi Wang
Head of the Finance Department & VPno datano datano data

2.4yrs

Average Tenure

52yo

Average Age

Experienced Management: 2386's management team is considered experienced (2.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Wenwu Xiang
President & Executive Director3.25yrsCN¥1.37mno data
Lili Sun
Employee Representative Director5.25yrsCN¥1.39mno data
Yingguan Zhou
Employee Representative Director1.5yrsCN¥1.00mno data
Renming Yu
Executive Chairman0.17yrno datano data
Chiu Chung Hui
Independent Non-Executive Director7yrsCN¥200.00kno data
Yong Jin
Independent Non-Executive Director7yrsCN¥200.00kno data
Zheng Ye
Independent Non-Executive Director7yrsCN¥200.00kno data
Guoliang Wang
Supervisor5.25yrsno datano data
Fei Zhu
Chairman of the Supervisory Committee2.92yrsno datano data
Wenxin Wu
Non-Executive Director1.5yrsno datano data

4.2yrs

Average Tenure

55.5yo

Average Age

Experienced Board: 2386's board of directors are considered experienced (4.2 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 not been meaningfully diluted in the past year.


Top Shareholders

Company Information

SINOPEC Engineering (Group) Co., Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: SINOPEC Engineering (Group) Co., Ltd.
  • Ticker: 2386
  • Exchange: SEHK
  • Founded:
  • Industry: Construction and Engineering
  • Sector: Capital Goods
  • Market Cap: HK$14.790b
  • Shares outstanding: 4.43b
  • Website: https://www.segroup.cn

Number of Employees


Location

  • SINOPEC Engineering (Group) Co., Ltd.
  • Tower B
  • No.19, Anhuibeili
  • Beijing
  • 100101
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
2386SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares-Foreign ListedHKHKDMay 2013
1NSDB (Deutsche Boerse AG)YesForeign Shares-Foreign ListedDEEURMay 2013
2386SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDMay 2013
2386SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDMay 2013

Biography

SINOPEC Engineering (Group) Co., Ltd., together with its subsidiaries, provides engineering, procurement, and construction (EPC) contracting services. 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, and equipment selling and leasing services, as well as medicine, pesticide, and chemical research services. The company serves various industries, such as petrol refining, chemical engineering, aromatics, coal chemicals, inorganic chemicals, pharmaceutical chemicals, clean energy, storage and transportation facilities, environmental protection, and energy saving. It has operations in the People’s Republic of China, Malaysia, Kuwait, Saudi Arabia, and internationally. The company is headquartered in Beijing, China. SINOPEC Engineering (Group) Co., Ltd. is a subsidiary of China Petrochemical Corporation. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/08 13:02
End of Day Share Price2020/04/08 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.