SEHK:2398

Stock Analysis Report

Good Friend International Holdings

Executive Summary

Good Friend International Holdings Inc., an investment holding company, designs, produces, and trades in computer numerical control machine tools in the People’s Republic of China.


Snowflake Analysis

Fair value with imperfect balance sheet.

Share Price & News

How has Good Friend International Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 2398's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

2.4%

2398

-2.7%

HK Machinery

-3.2%

HK Market


1 Year Return

-50.9%

2398

14.1%

HK Machinery

-10.2%

HK Market

Return vs Industry: 2398 underperformed the Hong Kong Machinery industry which returned 14.1% over the past year.

Return vs Market: 2398 underperformed the Hong Kong Market which returned -10.2% over the past year.


Shareholder returns

2398IndustryMarket
7 Day2.4%-2.7%-3.2%
30 Day-6.7%-0.08%-3.3%
90 Day-27.6%7.9%0.2%
1 Year-50.9%-50.9%17.4%14.1%-6.9%-10.2%
3 Year-45.1%-50.6%55.9%46.1%11.7%0.4%
5 Year-54.8%-61.5%55.7%42.4%11.1%-7.3%

Price Volatility Vs. Market

How volatile is Good Friend International Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Good Friend International 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: 2398 (HK$0.84) is trading below our estimate of fair value (HK$2.09)

Significantly Below Fair Value: 2398 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 2398 is unprofitable, so we can't compare its PE Ratio to the Machinery industry average.

PE vs Market: 2398 is unprofitable, so we can't compare its PE Ratio to the Hong Kong market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 2398's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 2398 is good value based on its PB Ratio (0.4x) compared to the HK Machinery industry average (1x).


Next Steps

Future Growth

How is Good Friend International Holdings forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

14.2%

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 Good Friend International Holdings 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 Good Friend International Holdings performed over the past 5 years?

-37.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 2398 is currently unprofitable.

Growing Profit Margin: 2398 is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: 2398 is unprofitable, and losses have increased over the past 5 years at a rate of -37.2% per year.

Accelerating Growth: Unable to compare 2398's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: 2398 is unprofitable, making it difficult to compare its past year earnings growth to the Machinery industry (7.3%).


Return on Equity

High ROE: 2398 has a negative Return on Equity (-7.6%), as it is currently unprofitable.


Next Steps

Financial Health

How is Good Friend International Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 2398's short term assets (CN¥1.7B) exceed its short term liabilities (CN¥1.4B).

Long Term Liabilities: 2398's short term assets (CN¥1.7B) exceed its long term liabilities (CN¥116.3M).


Debt to Equity History and Analysis

Debt Level: 2398's debt to equity ratio (87.8%) is considered high.

Reducing Debt: 2398's debt to equity ratio has increased from 54.9% to 87.8% over the past 5 years.


Balance Sheet

Inventory Level: 2398 has a high level of physical assets or inventory.

Debt Coverage by Assets: 2398's debt is covered by short term assets (assets are 2.5x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: 2398 has been profitable on average in the past, therefore cash runway is not a concern.

Forecast Cash Runway: 2398 has been profitable on average in the past, therefore cash runway is not a concern.


Next Steps

Dividend

What is Good Friend International Holdings's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate 2398's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate 2398's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if 2398's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if 2398's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: 2398 is not paying a notable dividend for the Hong Kong market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 2398's dividend in 3 years as they are not forecast to pay a notable one for the Hong Kong market.


Next Steps

Management

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

14.2yrs

Average board tenure


CEO

Chih-Yaung Chu (72yo)

1.2yrs

Tenure

CN¥1,051,000

Compensation

Mr. Chih-Yaung Chu has been the Chief Executive Officer of Good Friend International Holdings Inc since December 7, 2018. Mr. Chu serves as an Executive Chairman of Good Friend International Holdings Inc a ...


CEO Compensation Analysis

Compensation vs Market: Chih-Yaung's total compensation ($USD149.52K) is below average for companies of similar size in the Hong Kong market ($USD226.90K).

Compensation vs Earnings: Chih-Yaung's compensation has increased whilst the company is unprofitable.


Board Members

NamePositionTenureCompensationOwnership
Chih-Yaung Chu
Executive Chairman & CEO1.2yrsCN¥1.05mno data
Chi-Tang Wen
Executive Director14.2yrsCN¥144.00kno data
Rung-Hsien Chiu
Executive Director14.2yrsCN¥144.00kno data
Min-Ho Chen
Executive Director14.2yrsno datano data
Fook Sun Koo
Independent Non-Executive Director14.2yrsCN¥175.00kno data
Yu-Tang Yu
Independent Non-Executive Director14.2yrsCN¥88.00kno data
Wen-Cheng Kao
Independent Non Executive Director0.08yrsno datano data

14.2yrs

Average Tenure

63yo

Average Age

Experienced Board: 2398's board of directors are seasoned and experienced ( 14.2 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.


Ownership Breakdown

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


Top Shareholders

Company Information

Good Friend International Holdings Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Good Friend International Holdings Inc.
  • Ticker: 2398
  • Exchange: SEHK
  • Founded: 1993
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: HK$334.551m
  • Shares outstanding: 403.07m
  • Website: https://www.goodfriend.hk

Number of Employees


Location

  • Good Friend International Holdings Inc.
  • No. 120 Shixin North Road
  • Xiaoshan Economic and Technological Development Zone
  • Hangzhou
  • Zhejiang Province
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
2398SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJan 2006
912398TSEC (Taiwan Stock Exchange)DR EACH REPR 1/1 ORD SHSTWTWDMar 2010

Biography

Good Friend International Holdings Inc., an investment holding company, designs, produces, and trades in computer numerical control machine tools in the People’s Republic of China. The company operates through three segments: Machine Tools, Parking Garage Structure, and Forklift Trucks. It also designs and constructs three dimensional car parking garage structures; and designs and assembles forklift trucks. In addition, the company trades in machine tools. The company was founded in 1993 and is based in Hangzhou, the People's Republic of China. Good Friend International Holdings Inc. is a subsidiary of Good Friend (H.K.) Corporation Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/25 12:56
End of Day Share Price2020/02/25 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.