SEHK:331

Stock Analysis Report

Executive Summary

FSE Services Group Limited, an investment holding company, provides mechanical and electrical engineering services in Hong Kong, Mainland China, and Macau.


Snowflake Analysis

Mediocre balance sheet and slightly overvalued.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 331 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.1%

331

0.9%

HK Construction

1.1%

HK Market


1 Year Return

-5.7%

331

-34.2%

HK Construction

-21.6%

HK Market

Return vs Industry: 331 exceeded the Hong Kong Construction industry which returned -35.4% over the past year.

Return vs Market: 331 exceeded the Hong Kong Market which returned -22.7% over the past year.


Shareholder returns

331IndustryMarket
7 Day3.1%0.9%1.1%
30 Day-12.4%-12.4%-10.2%
90 Day-12.4%-17.9%-16.1%
1 Year0.9%-5.7%-30.9%-34.2%-18.8%-21.6%
3 Year66.4%36.5%-46.6%-52.2%-3.1%-12.8%
5 Yearn/a-55.5%-62.0%-13.5%-27.3%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is FSE Services Group undervalued compared to its fair value and its price relative to the market?

5.94x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 331 (HK$3.19) is trading above our estimate of fair value (HK$3.03)

Significantly Below Fair Value: 331 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 331 is good value based on its PE Ratio (5.7x) compared to the Construction industry average (8.2x).

PE vs Market: 331 is good value based on its PE Ratio (5.7x) compared to the Hong Kong market (9.1x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 331's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 331 is overvalued based on its PB Ratio (7.3x) compared to the HK Construction industry average (0.9x).


Next Steps

Future Growth

How is FSE Services Group forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

9.0%

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 FSE Services Group 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 FSE Services Group performed over the past 5 years?

13.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 331 has a high level of non-cash earnings.

Growing Profit Margin: 331's current net profit margins (5.2%) are higher than last year (5%).


Past Earnings Growth Analysis

Earnings Trend: 331's earnings have grown by 13.8% per year over the past 5 years.

Accelerating Growth: 331's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 331 had negative earnings growth (-1%) over the past year, making it difficult to compare to the Construction industry average (-2.5%).


Return on Equity

High ROE: Whilst 331's Return on Equity (74.67%) is outstanding, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is FSE Services Group's financial position?


Financial Position Analysis

Short Term Liabilities: 331's short term assets (HK$2.3B) exceed its short term liabilities (HK$1.9B).

Long Term Liabilities: 331's short term assets (HK$2.3B) exceed its long term liabilities (HK$656.7M).


Debt to Equity History and Analysis

Debt Level: 331's debt to equity ratio (166.3%) is considered high.

Reducing Debt: Insufficient data to determine if 331's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: 331's debt is not well covered by operating cash flow (6.4%).

Interest Coverage: 331 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 331 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 331's debt is covered by short term assets (assets are 4.2x debt).


Next Steps

Dividend

What is FSE Services Group's current dividend yield, its reliability and sustainability?

6.61%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 331's dividend (6.9%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.55%).

High Dividend: 331's dividend (6.9%) is low compared to the top 25% of dividend payers in the Hong Kong market (7.33%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, 331 has been paying a dividend for less than 10 years.

Growing Dividend: 331's dividend payments have increased, but the company has only paid a dividend for 4 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (44.1%), 331'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?

4.5yrs

Average board tenure


CEO

Rocky Poon (63yo)

4.67s

Tenure

HK$7,221,000

Compensation

Mr. Lock Kee Poon, also known as Rocky, has been the Chief Executive Officer and Executive Director at FSE Engineering Holdings Limited since August 28, 2015 and August 18, 2015 respectively. Mr. Poon serv ...


CEO Compensation Analysis

Compensation vs Market: Rocky's total compensation ($USD931.38K) is above average for companies of similar size in the Hong Kong market ($USD306.33K).

Compensation vs Earnings: Rocky's compensation has been consistent with company performance over the past year.


Board Members

NamePositionTenureCompensationOwnership
Lock Kee Poon
CEO & Executive Director4.67yrsHK$7.22mno data
Wai Hon Lam
Executive Vice Chairman3.25yrsHK$2.10mno data
Guilherme Doo Junior
Executive Director4.67yrsHK$1.67mno data
Kwok Bong Lee
Executive Director4.75yrsHK$1.42mno data
Kweong Wah Soon
Executive Director4.67yrsHK$4.80mno data
Shu Hung Wong
Executive Director2.33yrsHK$2.29mno data
Che-Keung Kwong
Independent Non-Executive Director4.42yrsHK$222.00kno data
Chiu Chung Hui
Independent Non-Executive Director4.42yrsHK$222.00kno data
Kar-Shun Cheng
Non-Executive Chairman4.67yrsHK$333.00kno data
Kwan Hung Lee
Independent Non-Executive Director4.42yrsHK$222.00kno data

4.5yrs

Average Tenure

61.5yo

Average Age

Experienced Board: 331's board of directors are considered experienced (4.5 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 not been meaningfully diluted in the past year.


Top Shareholders

Company Information

FSE Services Group Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: FSE Services Group Limited
  • Ticker: 331
  • Exchange: SEHK
  • Founded: 2015
  • Industry: Construction and Engineering
  • Sector: Capital Goods
  • Market Cap: HK$1.499b
  • Shares outstanding: 450.00m
  • Website: https://www.fseservices.com.hk

Number of Employees


Location

  • FSE Services Group Limited
  • Chevalier Commercial Centre
  • Units 801-810
  • Kowloon Bay
  • Kowloon
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
331SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDDec 2015

Biography

FSE Services Group Limited, an investment holding company, provides mechanical and electrical engineering services in Hong Kong, Mainland China, and Macau. It operates through E&M engineering, Environmental Management Services, and Facility Services segments. The company offers services, including installation works for construction projects; and maintenance services for commercial and residential buildings, hospitals, the public sector, and educational institutions. It is also involved in the provision of environmental engineering services; trading of environmental products, as well as provision of related engineering and consultancy services; and trading of ceramic tiles and building materials. In addition, the company offers cleaning services comprising general cleaning, waste management and disposal, external wall and window cleaning, pest control and clinical waste management rendered at commercial buildings, residential buildings, public transportations and other public institutions and facilities, as well as laundry services which comprises of dry cleaning and linen management services to corporate customers and the operation of dry cleaning and laundry retail valet outlets. Further, it provides chemical engineering, plumbing engineering, project management consultancy, and testing and calibration services, as well as maintenance and fitting out services. The company was formerly known as FSE Engineering Holdings Limited and changed its name to FSE Services Group Limited in April 2018. FSE Services Group Limited was incorporated in 2015 and is headquartered in Kowloon Bay, Hong Kong. FSE Services Group Limited is a subsidiary of FSE Holdings Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/03 14:31
End of Day Share Price2020/04/03 00:00
Earnings2019/12/31
Annual Earnings2019/06/30


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.