SEHK:2727

Stock Analysis Report

Shanghai Electric Group

Executive Summary

Shanghai Electric Group Company Limited, an equipment manufacturing conglomerate, provides clean energy equipment, new energy and environmental protection equipment, industrial equipment, and modern services in the People’s Republic of China.


Snowflake Analysis

Undervalued with proven track record and pays a dividend.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 2727's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-0.5%

2727

0.5%

HK Electrical

0.2%

HK Market


1 Year Return

-30.7%

2727

-41.8%

HK Electrical

-22.0%

HK Market

Return vs Industry: 2727 exceeded the Hong Kong Electrical industry which returned -41.6% over the past year.

Return vs Market: 2727 underperformed the Hong Kong Market which returned -22% over the past year.


Shareholder returns

2727IndustryMarket
7 Day-0.5%0.5%0.2%
30 Day-10.3%-13.8%-12.4%
90 Day-21.5%-21.1%-16.4%
1 Year-28.9%-30.7%-40.7%-41.8%-19.1%-22.0%
3 Year-42.9%-46.7%-56.0%-57.8%-3.7%-13.4%
5 Year-69.5%-71.7%-70.2%-72.0%-15.2%-28.8%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Shanghai Electric Group 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: 2727 (HK$2.08) is trading below our estimate of fair value (HK$18.45)

Significantly Below Fair Value: 2727 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 2727 is good value based on its PE Ratio (7.6x) compared to the Electrical industry average (8.5x).

PE vs Market: 2727 is good value based on its PE Ratio (7.6x) compared to the Hong Kong market (9.1x).


Price to Earnings Growth Ratio

PEG Ratio: 2727's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: 2727 is good value based on its PB Ratio (0.4x) compared to the HK Electrical industry average (0.6x).


Next Steps

Future Growth

How is Shanghai Electric Group forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

-8.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2727's earnings are forecast to decline over the next 3 years (-8.6% per year).

Earnings vs Market: 2727's earnings are forecast to decline over the next 3 years (-8.6% per year).

High Growth Earnings: 2727's earnings are forecast to decline over the next 3 years.

Revenue vs Market: 2727's revenue is expected to decline over the next 3 years (-6.2% per year).

High Growth Revenue: 2727's revenue is forecast to decline over the next 3 years (-6.2% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 2727's Return on Equity is forecast to be low in 3 years time (5.1%).


Next Steps

Past Performance

How has Shanghai Electric Group performed over the past 5 years?

7.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 2727 has high quality earnings.

Growing Profit Margin: 2727's current net profit margins (2.9%) are lower than last year (3%).


Past Earnings Growth Analysis

Earnings Trend: 2727's earnings have grown by 7.4% per year over the past 5 years.

Accelerating Growth: 2727's earnings growth over the past year (23.3%) exceeds its 5-year average (7.4% per year).

Earnings vs Industry: 2727 earnings growth over the past year (23.3%) exceeded the Electrical industry 19.1%.


Return on Equity

High ROE: 2727's Return on Equity (6.5%) is considered low.


Next Steps

Financial Health

How is Shanghai Electric Group's financial position?


Financial Position Analysis

Short Term Liabilities: 2727's short term assets (CN¥199.2B) exceed its short term liabilities (CN¥164.1B).

Long Term Liabilities: 2727's short term assets (CN¥199.2B) exceed its long term liabilities (CN¥24.9B).


Debt to Equity History and Analysis

Debt Level: 2727's debt to equity ratio (47.3%) is considered high.

Reducing Debt: 2727's debt to equity ratio has increased from 18% to 47.3% over the past 5 years.

Debt Coverage: 2727's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: 2727's interest payments on its debt are well covered by EBIT (13.7x coverage).


Balance Sheet

Inventory Level: 2727 has a high level of physical assets or inventory.

Debt Coverage by Assets: 2727's debt is covered by short term assets (assets are 4.6x debt).


Next Steps

Dividend

What is Shanghai Electric Group's current dividend yield, its reliability and sustainability?

3.23%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 2727's dividend (3.23%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.6%).

High Dividend: 2727's dividend (3.23%) is low compared to the top 25% of dividend payers in the Hong Kong market (7.27%).


Stability and Growth of Payments

Stable Dividend: 2727's dividend payments have been volatile in the past 10 years.

Growing Dividend: 2727's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (24.6%), 2727's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 2727's dividends in 3 years are forecast to be well covered by earnings (32.9% payout ratio).


Next Steps

Management

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

2.6yrs

Average management tenure


CEO

Jianhua Zheng (59yo)

2.58s

Tenure

CN¥1,241,000

Compensation

Mr. Jianhua Zheng has been Chairman and Chief Executive Officer of Shanghai Electric Group Company Limited since September 1, 2017. Mr. Zheng served as the President of Shanghai Electric Group Company Limi ...


CEO Compensation Analysis

Compensation vs Market: Jianhua's total compensation ($USD175.02K) is below average for companies of similar size in the Hong Kong market ($USD670.57K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Jianhua Zheng
Chairman & CEO2.58yrsCN¥1.24mno data
Ou Huang
President & Executive Director1.58yrsCN¥1.01mno data
Kang Hu
CFO & Finance Directorno dataCN¥1.30mno data
Mingjie Zhang
Chief Investment Officer1.67yrsCN¥105.80kno data
Chung Kwong Li
Head of the Investor Relations Department & Company Secretaryno dataCN¥1.10mno data
Liping Tong
Chief Legal Officer & Head of the Legal Affair Department8.83yrsCN¥1.45mno data
Bin Zhu
Executive Director1.58yrsCN¥1.63mno data
Zhaokai Zhu
Executive Director1.58yrsCN¥660.81kno data
Rong Fu
Director of Secretariat Office & Secretary to the Board15.25yrsCN¥1.08mno data

2.6yrs

Average Tenure

56yo

Average Age

Experienced Management: 2727's management team is considered experienced (2.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Jianhua Zheng
Chairman & CEO2.58yrsCN¥1.24mno data
Ou Huang
President & Executive Director1.58yrsCN¥1.01mno data
Bin Zhu
Executive Director1.58yrsCN¥1.63mno data
Zhaokai Zhu
Executive Director1.58yrsCN¥660.81kno data
Yifang Yao
Non-Executive Director12.42yrsno datano data
Junhao Chu
Independent Non-Executive Director5.75yrsCN¥250.00kno data
An Li
Non-Executive Director1.58yrsno datano data
Guoxiong Zhou
Chairman of Supervisory Committeeno datano datano data
Juntong Xi
Independent Non-Executive Director1.58yrsCN¥83.00kno data
Xingsheng Hua
Vice Chairman of Supervisory Committeeno datano datano data

1.6yrs

Average Tenure

58yo

Average Age

Experienced Board: 2727's board of directors are not considered experienced ( 1.6 years average tenure), which suggests a new board.


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

Shanghai Electric Group Company Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Shanghai Electric Group Company Limited
  • Ticker: 2727
  • Exchange: SEHK
  • Founded: 2004
  • Industry: Heavy Electrical Equipment
  • Sector: Capital Goods
  • Market Cap: HK$67.842b
  • Shares outstanding: 15.15b
  • Website: https://www.shanghai-electric.com

Number of Employees


Location

  • Shanghai Electric Group Company Limited
  • No. 212, Qinjiang Road
  • Shanghai
  • 200233
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
2727SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares-Foreign ListedHKHKDApr 2005
USRDB (Deutsche Boerse AG)YesForeign Shares-Foreign ListedDEEURApr 2005
2727SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDApr 2005
2727SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDApr 2005
601727SHSE (Shanghai Stock Exchange)Domestic SharesCNCNYDec 2008
601727XSSC (Shanghai Stock Exchange - Shanghai - Hong Kong Stock Connect)Domestic SharesCNCNYDec 2008
SIEL.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDJan 2009

Biography

Shanghai Electric Group Company Limited, an equipment manufacturing conglomerate, provides clean energy equipment, new energy and environmental protection equipment, industrial equipment, and modern services in the People’s Republic of China. The company designs, manufactures, and sells nuclear island equipment, wind power equipment, and heavy machinery, including large forging components; and provides solution package for utilization of solid waste, sewage treatment, power generation environment protection, and distributed energy systems. It also offers thermal power equipment and corollary equipment; and power transmission and distribution equipment. In addition, the company provides elevators, automation equipment, electrical motors, machine tools, components, and other electromechanical equipment. Further, it offers integrated engineering services for power station projects and other industries; financial products and services; and international trading, financial lease and related consulting, and insurance brokerage services. Additionally, the company manufactures turbine generators and spare parts; desulphurization, civil nuclear bearing, and electrical and mechanical equipment; power generation equipment and auxiliary products; printing and packing machinery, artificial boards, air-conditioners, welding materials, and engineering machinery; electrical switchgears; oil immersed power transformers; equipment for aircraft assembly lines; wires and cables; industrial blades, precision bearings, and fasteners; and escalators, electronic ramps, and building automation management and safety systems. It also sells power station boilers and equipment, and industry boilers; provides technical consulting, and after-sales service; and import and export of products. The company was founded in 2004 and is based in Shanghai, the People’s Republic of China. Shanghai Electric Group Company Limited is a subsidiary of Shanghai Electric (Group) Corporation. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/04 13:07
End of Day Share Price2020/04/03 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.