Valuation Update With 7 Day Price Move • Apr 02
Investor sentiment improves as stock rises 21% After last week's 21% share price gain to HK$3.22, the stock trades at a forward P/E ratio of 9x. Average forward P/E is 10x in the Machinery industry in Hong Kong. Total returns to shareholders of 182% over the past three years. Declared Dividend • Mar 28
Dividend of HK$0.20 announced Shareholders will receive a dividend of HK$0.20. Ex-date: 1st June 2026 Payment date: 31st July 2026 Dividend yield will be 6.5%, which is higher than the industry average of 2.8%. Sustainability & Growth Dividend is well covered by both earnings (44% earnings payout ratio) and cash flows (31% cash payout ratio). The dividend has increased by an average of 8.1% per year over the past 10 years. However, payments have been volatile during that time. EPS is expected to grow by 12% over the next 2 years, which should provide support to the dividend and adequate earnings cover. Reported Earnings • Mar 27
Full year 2025 earnings: EPS and revenues exceed analyst expectations Full year 2025 results: EPS: CN¥0.30 (up from CN¥0.24 in FY 2024). Revenue: CN¥11.2b (up 9.8% from FY 2024). Net income: CN¥1.30b (up 28% from FY 2024). Profit margin: 12% (up from 10.0% in FY 2024). The increase in margin was driven by higher revenue. Revenue exceeded analyst estimates by 2.6%. Earnings per share (EPS) also surpassed analyst estimates by 9.4%. Revenue is forecast to grow 6.4% p.a. on average during the next 2 years, compared to a 12% growth forecast for the Machinery industry in Hong Kong. Over the last 3 years on average, earnings per share has increased by 37% per year but the company’s share price has only increased by 30% per year, which means it is significantly lagging earnings growth. Announcement • Mar 26
Lonking Holdings Limited, Annual General Meeting, May 28, 2026 Lonking Holdings Limited, Annual General Meeting, May 28, 2026. Location: meeting room 508, 5/f., jucai office building, 26 minyi road, xingqiao, songjiang industrial, shanghai 201612 China Announcement • Feb 02
Lonking Holdings Limited to Report Fiscal Year 2025 Results on Mar 26, 2026 Lonking Holdings Limited announced that they will report fiscal year 2025 results on Mar 26, 2026 Announcement • Jan 20
Lonking Holdings Limited Provides Earnings Guidance for the Year Ended December 31, 2025 Lonking Holdings Limited provided earnings guidance for the year ended December 31, 2025. The Group expects to record a significant increase in its net profit for the year ended 31 December 2025, as compared to the corresponding period in the previous year. The Board expects that the net profit for the reporting period was approximately RMB 1,250 million to RMB 1,330 million, representing an increase of 23% to 31% over the same period last year. The increase in net profit during the reporting period was mainly due to (i) the steady growth in domestic and international sales, especially the further manifestation of the contribution of the export business to the profit; (ii) the continuous development of new products, with high-value-added new products becoming the main driver of profit growth; and (iii) the remarkable results of the initiatives for quality enhancement, cost control, and efficiency improvement, leading to a further increase in the overall gross profit margin. Recent Insider Transactions • Oct 23
Founder & Non Executive Vice Chairman recently bought HK$38m worth of stock On the 20th of October, Ngan Ying Ngai bought around 13m shares on-market at roughly HK$2.85 per share. This transaction amounted to less than 1% of their direct individual holding at the time of the trade. In the last 3 months, they made an even bigger purchase worth HK$57m. Ngan Ying has been a buyer over the last 12 months, purchasing a net total of HK$104m worth in shares. Reported Earnings • Oct 04
First half 2025 earnings: EPS exceeds analyst expectations while revenues lag behind First half 2025 results: EPS: CN¥0.15 (up from CN¥0.11 in 1H 2024). Revenue: CN¥5.60b (up 4.4% from 1H 2024). Net income: CN¥631.7m (up 38% from 1H 2024). Profit margin: 11% (up from 8.6% in 1H 2024). The increase in margin was driven by higher revenue. Revenue missed analyst estimates by 13%. Earnings per share (EPS) exceeded analyst estimates by 7.1%. Revenue is forecast to grow 8.8% p.a. on average during the next 3 years, compared to a 14% growth forecast for the Machinery industry in Hong Kong. Over the last 3 years on average, earnings per share has increased by 37% per year whereas the company’s share price has increased by 40% per year. Recent Insider Transactions • Sep 04
Founder & Non Executive Vice Chairman recently bought HK$57m worth of stock On the 29th of August, Ngan Ying Ngai bought around 21m shares on-market at roughly HK$2.70 per share. This transaction amounted to less than 1% of their direct individual holding at the time of the trade. This was the largest purchase by an insider in the last 3 months. This was Ngan Ying's only on-market trade for the last 12 months. Reported Earnings • Aug 27
First half 2025 earnings released: EPS: CN¥0.15 (vs CN¥0.11 in 1H 2024) First half 2025 results: EPS: CN¥0.15 (up from CN¥0.11 in 1H 2024). Revenue: CN¥5.60b (up 4.4% from 1H 2024). Net income: CN¥631.7m (up 38% from 1H 2024). Profit margin: 11% (up from 8.6% in 1H 2024). The increase in margin was driven by higher revenue. Revenue is forecast to grow 10% p.a. on average during the next 3 years, compared to a 12% growth forecast for the Machinery industry in Hong Kong. Over the last 3 years on average, earnings per share has increased by 37% per year but the company’s share price has only increased by 27% per year, which means it is significantly lagging earnings growth. Announcement • Jul 25
Lonking Holdings Limited to Report First Half, 2025 Results on Aug 26, 2025 Lonking Holdings Limited announced that they will report first half, 2025 results on Aug 26, 2025 Valuation Update With 7 Day Price Move • Jul 22
Investor sentiment improves as stock rises 18% After last week's 18% share price gain to HK$2.78, the stock trades at a forward P/E ratio of 10x. Average forward P/E is 9x in the Machinery industry in Hong Kong. Total returns to shareholders of 118% over the past three years. Simply Wall St's valuation model estimates the intrinsic value at HK$3.98 per share. Major Estimate Revision • Jul 03
Consensus EPS estimates increase by 18% The consensus outlook for fiscal year 2025 has been updated. 2025 EPS estimate increased from CN¥0.212 to CN¥0.251. Revenue forecast steady at CN¥11.3b. Net income forecast to grow 4.5% next year vs 15% growth forecast for Machinery industry in Hong Kong. Consensus price target of HK$1.93 unchanged from last update. Share price rose 8.7% to HK$2.26 over the past week. New Risk • Jun 24
New major risk - Revenue and earnings growth Earnings have declined by 25% per year over the past 5 years. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are declining over an extended period, then in most cases the share price will decline over time unless the company can turn around its fortunes. A trend of falling earnings can be very difficult to turn around. If the company is well already established it may also be a sign the company has matured and is in decline. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risk Earnings have declined by 25% per year over the past 5 years. Minor Risk Unstable dividend paying track record with dividend experiencing an annual drop of over 20% in the past. Announcement • May 28
Lonking Holdings Limited Approves the Final Dividend for the Year Ended 31 December 2024 Lonking Holdings Limited announced that at its AGM held on 28 May 2025, approved the payment of final dividend of HKD 0.13 per share of the Company for the year ended 31 December 2024. Upcoming Dividend • May 23
Upcoming dividend of HK$0.13 per share Eligible shareholders must have bought the stock before 30 May 2025. Payment date: 31 July 2025. Payout ratio is a comfortable 51% and this is well supported by cash flows. Trailing yield: 6.3%. Lower than top quartile of Hong Kong dividend payers (7.7%). Higher than average of industry peers (3.9%). Reported Earnings • May 06
Full year 2024 earnings: EPS exceeds analyst expectations while revenues lag behind Full year 2024 results: EPS: CN¥0.24 (up from CN¥0.15 in FY 2023). Revenue: CN¥10.2b (down 2.9% from FY 2023). Net income: CN¥1.02b (up 58% from FY 2023). Profit margin: 10.0% (up from 6.1% in FY 2023). The increase in margin was driven by lower expenses. Revenue missed analyst estimates by 5.3%. Earnings per share (EPS) exceeded analyst estimates by 32%. Revenue is forecast to grow 7.6% p.a. on average during the next 3 years, compared to a 13% growth forecast for the Machinery industry in Hong Kong. Over the last 3 years on average, earnings per share has increased by 4% per year but the company’s share price has fallen by 4% per year, which means it is significantly lagging earnings. Major Estimate Revision • Apr 02
Consensus EPS estimates increase by 34%, revenue downgraded The consensus outlook for fiscal year 2025 has been updated. 2025 revenue forecast fell from CN¥11.4b to CN¥11.2b. EPS estimate rose from CN¥0.197 to CN¥0.265. Net income forecast to grow 10% next year vs 18% growth forecast for Machinery industry in Hong Kong. Consensus price target up from HK$1.80 to HK$1.85. Share price rose 14% to HK$2.10 over the past week. New Risk • Mar 27
New major risk - Revenue and earnings growth Earnings are forecast to decline by an average of 2.7% per year for the foreseeable future. This is considered a major risk. Ultimately, shareholders want to see a good return on their investment and that generally comes from sharing in the company's profits. If profits are expected to decline, then in most cases the share price will decline over time as well. In addition, if the company pays dividends it will also likely need to reduce or cut them, striking a dual blow to total shareholder returns. Currently, the following risks have been identified for the company: Major Risk Earnings are forecast to decline by an average of 2.7% per year for the foreseeable future. Minor Risk Unstable dividend paying track record with dividend experiencing an annual drop of over 20% in the past. Announcement • Mar 27
Lonking Holdings Limited Proposes Final Ordinary Dividend for the Financial Year End 31 December 2024, Payable on July 31, 2025 Lonking Holdings Limited proposed final ordinary dividend of HKD 0.13 per share for the financial year end 31 December 2024. Ex-dividend date 30 May 2025, Record date 05 June 2025 and Payment date 31 July 2025. Date of shareholders' approval 28 May 2025. Announcement • Mar 26
Lonking Holdings Limited, Annual General Meeting, May 28, 2025 Lonking Holdings Limited, Annual General Meeting, May 28, 2025. Location: meeting room 508, 5/f., jucai office building, 26 minyi road, xingqiao, songjiang industrial, shanghai 201612 China Announcement • Jan 24
Lonking Holdings Limited to Report Fiscal Year 2024 Results on Mar 26, 2025 Lonking Holdings Limited announced that they will report fiscal year 2024 results on Mar 26, 2025 Valuation Update With 7 Day Price Move • Jan 20
Investor sentiment improves as stock rises 21% After last week's 21% share price gain to HK$1.77, the stock trades at a forward P/E ratio of 9x. Average forward P/E is 8x in the Machinery industry in Hong Kong. Total loss to shareholders of 5.1% over the past three years. Announcement • Jan 17
Lonking Holdings Limited Provides Consolidated Earnings Guidance for the Year Ended 31 December 2024 Lonking Holdings Limited provided consolidated earnings guidance for the year ended 31 December 2024. The group expects to record a significant increase in its net profit for the year ended 31 December 2024, as compared to the corresponding period in the previous year. The Board expects that the net profit for the reporting period was approximately RMB 1,000 million to RMB 1,070 million, representing an increase of 55% to 66% over the same period last year. The increase in net profit during the reporting period was mainly due to (i) a year-on-year improvement in the overall gross margin of products as the Group achieved success in improving product quality and controlling costs, as well as the continuous increase in export income; (ii) a year- on-year increase in the net income from financial assets. Buy Or Sell Opportunity • Oct 03
Now 21% undervalued Over the last 90 days, the stock has risen 19% to HK$1.65. The fair value is estimated to be HK$2.08, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has declined by 12% over the last 3 years. Earnings per share has declined by 38%. Revenue is forecast to grow by 18% in 2 years. Earnings are forecast to grow by 11% in the next 2 years. Reported Earnings • Aug 31
First half 2024 earnings released: EPS: CN¥0.11 (vs CN¥0.072 in 1H 2023) First half 2024 results: EPS: CN¥0.11 (up from CN¥0.072 in 1H 2023). Revenue: CN¥5.36b (down 6.4% from 1H 2023). Net income: CN¥458.4m (up 49% from 1H 2023). Profit margin: 8.6% (up from 5.4% in 1H 2023). The increase in margin was driven by lower expenses. Revenue is forecast to grow 7.9% p.a. on average during the next 3 years, compared to a 12% growth forecast for the Machinery industry in Hong Kong. Over the last 3 years on average, earnings per share has fallen by 38% per year but the company’s share price has only fallen by 18% per year, which means it has not declined as severely as earnings. Announcement • Jul 31
Lonking Holdings Limited to Report First Half, 2024 Results on Aug 29, 2024 Lonking Holdings Limited announced that they will report first half, 2024 results on Aug 29, 2024 Announcement • May 29
Lonking Holdings Limited Approves Final Dividend for the Year Ended 31 December 2023, Payable on or Before 31 July 2024 Lonking Holdings Limited announced that at its AGM held on 28 May 2024 approved the payment of final dividend of HKD 0.08 per share of the Company for the year ended 31 December 2023. A final dividend of HKD 0.08 per share was approved at the AGM and will be distributed on or before 31 July 2024 to shareholders whose names appear on the register of members of the Company at the close of business on 5 June 2024. Upcoming Dividend • May 23
Upcoming dividend of HK$0.08 per share Eligible shareholders must have bought the stock before 30 May 2024. Payment date: 31 July 2024. Payout ratio is a comfortable 48% and this is well supported by cash flows. Trailing yield: 5.0%. Lower than top quartile of Hong Kong dividend payers (7.4%). Higher than average of industry peers (3.1%). Valuation Update With 7 Day Price Move • May 13
Investor sentiment improves as stock rises 16% After last week's 16% share price gain to HK$1.71, the stock trades at a forward P/E ratio of 9x. Average forward P/E is 9x in the Machinery industry in Hong Kong. Total loss to shareholders of 27% over the past three years. Reported Earnings • Apr 28
Full year 2023 earnings: EPS exceeds analyst expectations while revenues lag behind Full year 2023 results: EPS: CN¥0.15 (up from CN¥0.094 in FY 2022). Revenue: CN¥10.5b (down 5.6% from FY 2022). Net income: CN¥645.4m (up 61% from FY 2022). Profit margin: 6.1% (up from 3.6% in FY 2022). The increase in margin was driven by lower expenses. Revenue missed analyst estimates by 2.1%. Earnings per share (EPS) exceeded analyst estimates by 8.1%. Revenue is forecast to grow 5.5% p.a. on average during the next 3 years, compared to a 11% growth forecast for the Machinery industry in Hong Kong. Over the last 3 years on average, earnings per share has fallen by 56% per year but the company’s share price has only fallen by 24% per year, which means it has not declined as severely as earnings. Announcement • Mar 29
Lonking Holdings Limited, Annual General Meeting, May 28, 2024 Lonking Holdings Limited, Annual General Meeting, May 28, 2024. Location: meeting Room 508, 5/F., Jucai Officeffice Building, 26 Minyi Road, Xingqiao, Songjiang Industrial, Shanghai 201612, Shanghai China Reported Earnings • Mar 29
Full year 2023 earnings: EPS exceeds analyst expectations while revenues lag behind Full year 2023 results: EPS: CN¥0.15 (up from CN¥0.094 in FY 2022). Revenue: CN¥10.5b (down 5.6% from FY 2022). Net income: CN¥645.4m (up 61% from FY 2022). Profit margin: 6.1% (up from 3.6% in FY 2022). The increase in margin was driven by lower expenses. Revenue missed analyst estimates by 2.1%. Earnings per share (EPS) exceeded analyst estimates by 8.1%. Revenue is forecast to grow 6.5% p.a. on average during the next 2 years, compared to a 11% growth forecast for the Machinery industry in Hong Kong. Over the last 3 years on average, earnings per share has fallen by 56% per year but the company’s share price has only fallen by 24% per year, which means it has not declined as severely as earnings. Announcement • Feb 10
Lonking Holdings Limited to Report Fiscal Year 2023 Results on Mar 28, 2024 Lonking Holdings Limited announced that they will report fiscal year 2023 results on Mar 28, 2024 Major Estimate Revision • Jan 29
Consensus EPS estimates fall by 11% The consensus outlook for fiscal year 2023 has been updated. 2023 EPS estimate fell from CN¥0.157 to CN¥0.139 per share. Revenue forecast steady at CN¥11.4b. Net income forecast to grow 20% next year vs 20% growth forecast for Machinery industry in Hong Kong. Consensus price target broadly unchanged at HK$1.25. Share price rose 9.5% to HK$1.27 over the past week. Announcement • Jan 24
Lonking Holdings Limited Provides Consolidated Earnings Guidance for the Year Ended December 31, 2023 Lonking Holdings Limited provided consolidated earnings guidance for the year ended December 31, 2023. For the year, the company expects to record a significant increase in its net profit for the year ended 31 December 2023, as compared to the corresponding period in the previous year. The Board expects that the net profit for the reporting period was approximately RMB 600 million to RMB 700 million, representing an increase of 50% to 75% over the same period last year. The increase in net profit during the Reporting Period was mainly due to (i) the rapid increase in the scale of production and sales of the internationally oriented business, leading to a year-on-year increase in the Company's operating results; (ii) the significant year-on-year increase in net gains generated from financial assets. Recent Insider Transactions • Jan 19
Founder & Non Executive Vice Chairman recently bought HK$5.7m worth of stock On the 17th of January, Ngan Ying Ngai bought around 5m shares on-market at roughly HK$1.20 per share. This transaction amounted to less than 1% of their direct individual holding at the time of the trade. This was the largest purchase by an insider in the last 3 months. Ngan Ying has been a buyer over the last 12 months, purchasing a net total of HK$8.8m worth in shares. Recent Insider Transactions • Dec 30
Founder & Non Executive Vice Chairman recently bought HK$1.8m worth of stock On the 27th of December, Ngan Ying Ngai bought around 2m shares on-market at roughly HK$1.20 per share. This transaction amounted to less than 1% of their direct individual holding at the time of the trade. This was the largest purchase by an insider in the last 3 months. This was Ngan Ying's only on-market trade for the last 12 months. Major Estimate Revision • Nov 07
Consensus EPS estimates increase by 21% The consensus outlook for fiscal year 2023 has been updated. 2023 EPS estimate increased from CN¥0.128 to CN¥0.154. Revenue forecast unchanged at CN¥11.8b. Net income forecast to grow 26% next year vs 14% growth forecast for Machinery industry in Hong Kong. Consensus price target down from HK$1.36 to HK$1.24. Share price was steady at HK$1.20 over the past week. Reported Earnings • Oct 03
First half 2023 earnings released: EPS: CN¥0.072 (vs CN¥0.035 in 1H 2022) First half 2023 results: EPS: CN¥0.072 (up from CN¥0.035 in 1H 2022). Revenue: CN¥5.73b (down 4.7% from 1H 2022). Net income: CN¥307.4m (up 108% from 1H 2022). Profit margin: 5.4% (up from 2.5% in 1H 2022). Revenue is forecast to grow 5.1% p.a. on average during the next 3 years, compared to a 12% growth forecast for the Machinery industry in Hong Kong. Over the last 3 years on average, earnings per share has fallen by 52% per year but the company’s share price has only fallen by 13% per year, which means it has not declined as severely as earnings. Reported Earnings • Aug 31
First half 2023 earnings released: EPS: CN¥0.072 (vs CN¥0.035 in 1H 2022) First half 2023 results: EPS: CN¥0.072 (up from CN¥0.035 in 1H 2022). Revenue: CN¥5.73b (down 4.7% from 1H 2022). Net income: CN¥307.4m (up 108% from 1H 2022). Profit margin: 5.4% (up from 2.5% in 1H 2022). Revenue is forecast to grow 5.4% p.a. on average during the next 3 years, compared to a 13% growth forecast for the Machinery industry in Hong Kong. Over the last 3 years on average, earnings per share has fallen by 52% per year but the company’s share price has only fallen by 15% per year, which means it has not declined as severely as earnings. Announcement • Aug 01
Lonking Holdings Limited to Report First Half, 2023 Results on Aug 29, 2023 Lonking Holdings Limited announced that they will report first half, 2023 results on Aug 29, 2023 Valuation Update With 7 Day Price Move • May 30
Investor sentiment deteriorates as stock falls 16% After last week's 16% share price decline to HK$1.18, the stock trades at a forward P/E ratio of 6x. Average forward P/E is 9x in the Machinery industry in Hong Kong. Total loss to shareholders of 36% over the past three years. Simply Wall St's valuation model estimates the intrinsic value at HK$1.56 per share. Buying Opportunity • May 30
Now 24% undervalued after recent price drop Over the last 90 days, the stock is down 21%. The fair value is estimated to be HK$1.56, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has been flat over the last 3 years. Earnings per share has declined by 37%. For the next 3 years, revenue is forecast to grow by 4.7% per annum. Earnings is also forecast to grow by 20% per annum over the same time period. Announcement • May 29
Lonking Holdings Limited Approves Final Dividend for the Year Ended December 31, 2022, Payable on or Before July 28, 2023 Lonking Holdings Limited announced that at its AGM held on May 26, 2023, shareholders approved the final dividend of HKD 0.10 per share and will be distributed on or before 28 July 2023 to shareholders whose names appear on the register of members of the company at the close of business on 5 June 2023. Upcoming Dividend • May 23
Upcoming dividend of HK$0.10 per share at 6.9% yield Eligible shareholders must have bought the stock before 30 May 2023. Payment date: 28 July 2023. Payout ratio is on the higher end at 95%, however this is supported by cash flows. Trailing yield: 6.9%. Lower than top quartile of Hong Kong dividend payers (7.6%). Higher than average of industry peers (2.6%). Reported Earnings • Mar 29
Full year 2022 earnings: EPS exceeds analyst expectations while revenues lag behind Full year 2022 results: EPS: CN¥0.09 (down from CN¥0.30 in FY 2021). Revenue: CN¥11.2b (down 19% from FY 2021). Net income: CN¥400.5m (down 69% from FY 2021). Profit margin: 3.6% (down from 9.3% in FY 2021). The decrease in margin was driven by lower revenue. Revenue missed analyst estimates by 1.7%. Earnings per share (EPS) exceeded analyst estimates by 15%. Revenue is forecast to grow 5.0% p.a. on average during the next 3 years, compared to a 12% growth forecast for the Machinery industry in Hong Kong. Over the last 3 years on average, earnings per share has fallen by 37% per year but the company’s share price has only fallen by 16% per year, which means it has not declined as severely as earnings. Announcement • Feb 08
Lonking Holdings Limited to Report Fiscal Year 2022 Results on Mar 28, 2023 Lonking Holdings Limited announced that they will report fiscal year 2022 results on Mar 28, 2023 Board Change • Nov 16
Less than half of directors are independent There is 1 new director who has joined the board in the last 3 years. The new board member was an independent director. The company's board is composed of: 1 new director. No experienced directors. 7 highly experienced directors. 3 independent directors (5 non-independent directors). Independent Non-Executive Director Tai Wei Yu was the last independent director to join the board, commencing their role in 2021. The following issues are considered to be risks according to the Simply Wall St Risk Model: Minority of independent directors. Insufficient board refreshment. Major Estimate Revision • Oct 06
Consensus forecasts updated The consensus outlook for 2022 has been updated. 2022 revenue forecast increased from CN¥11.3b to CN¥11.5b. EPS estimate fell from CN¥0.13 to CN¥0.11 per share. Net income forecast to grow 29% next year vs 31% growth forecast for Machinery industry in Hong Kong. Consensus price target down from HK$1.38 to HK$1.23. Share price rose 11% to HK$1.18 over the past week. Reported Earnings • Oct 01
First half 2022 earnings: EPS and revenues miss analyst expectations First half 2022 results: EPS: CN¥0.035 (down from CN¥0.22 in 1H 2021). Revenue: CN¥6.01b (down 27% from 1H 2021). Net income: CN¥147.9m (down 84% from 1H 2021). Profit margin: 2.5% (down from 12% in 1H 2021). Revenue missed analyst estimates by 7.9%. Earnings per share (EPS) also missed analyst estimates by 73%. Revenue is forecast to grow 4.2% p.a. on average during the next 3 years, compared to a 13% growth forecast for the Machinery industry in Hong Kong. Over the last 3 years on average, earnings per share has fallen by 13% per year whereas the company’s share price has fallen by 18% per year. Major Estimate Revision • Sep 02
Consensus EPS estimates fall by 27% The consensus outlook for earnings per share (EPS) in 2022 has deteriorated. 2022 revenue forecast decreased from CN¥13.1b to CN¥11.9b. EPS estimate also fell from CN¥0.20 per share to CN¥0.14 per share. Net income forecast to grow 59% next year vs 36% growth forecast for Machinery industry in Hong Kong. Consensus price target down from HK$1.57 to HK$1.42. Share price fell 7.9% to HK$1.29 over the past week. Reported Earnings • Aug 29
First half 2022 earnings released: EPS: CN¥0.03 (vs CN¥0.22 in 1H 2021) First half 2022 results: EPS: CN¥0.03 (down from CN¥0.22 in 1H 2021). Revenue: CN¥6.01b (down 27% from 1H 2021). Net income: CN¥147.9m (down 84% from 1H 2021). Profit margin: 2.5% (down from 12% in 1H 2021). Over the next year, revenue is forecast to grow 10%, compared to a 9.8% growth forecast for the Machinery industry in Hong Kong. Over the last 3 years on average, earnings per share has fallen by 14% per year but the company’s share price has only fallen by 9% per year, which means it has not declined as severely as earnings. Major Estimate Revision • Aug 06
Consensus EPS estimates fall by 15% The consensus outlook for earnings per share (EPS) in 2022 has deteriorated. 2022 revenue forecast decreased from CN¥13.4b to CN¥13.1b. EPS estimate also fell from CN¥0.23 per share to CN¥0.20 per share. Net income forecast to shrink 7.8% next year vs 18% growth forecast for Machinery industry in Hong Kong . Consensus price target down from HK$1.71 to HK$1.61. Share price fell 7.1% to HK$1.45 over the past week. Buying Opportunity • Jul 18
Now 22% undervalued after recent price drop Over the last 90 days, the stock is down 28%. The fair value is estimated to be HK$2.00, however this is not to be taken as a buy recommendation but rather should be used as a guide only. Revenue has grown by 7.1% over the last 3 years. Earnings per share has grown by 10%. For the next 3 years, revenue is forecast to decline by 0.7% per annum. Earnings is also forecast to decline by 2.6% per annum over the same time period. Upcoming Dividend • May 23
Upcoming dividend of HK$0.22 per share Eligible shareholders must have bought the stock before 30 May 2022. Payment date: 29 July 2022. Payout ratio is a comfortable 60% but the company is paying out more than the cash it is generating. Trailing yield: 9.8%. Within top quartile of Hong Kong dividend payers (7.8%). Higher than average of industry peers (3.6%). Board Change • Apr 27
Less than half of directors are independent There is 1 new director who has joined the board in the last 3 years. The new board member was an independent director. The company's board is composed of: 1 new director. No experienced directors. 7 highly experienced directors. 3 independent directors (5 non-independent directors). Independent Non-Executive Director Tai Wei Yu was the last independent director to join the board, commencing their role in 2021. The following issues are considered to be risks according to the Simply Wall St Risk Model: Minority of independent directors. Insufficient board refreshment. Major Estimate Revision • Apr 05
Consensus EPS estimates fall by 13% The consensus outlook for earnings per share (EPS) in 2022 has deteriorated. 2022 revenue forecast decreased from CN¥13.8b to CN¥13.3b. EPS estimate also fell from CN¥0.31 per share to CN¥0.27 per share. Net income forecast to shrink 12% next year vs 20% growth forecast for Machinery industry in Hong Kong . Consensus price target down from HK$2.01 to HK$1.93. Share price rose 4.3% to HK$2.18 over the past week. Reported Earnings • Mar 30
Full year 2021 earnings: EPS exceeds analyst expectations while revenues lag behind Full year 2021 results: EPS: CN¥0.30 (down from CN¥0.46 in FY 2020). Revenue: CN¥13.7b (up 6.3% from FY 2020). Net income: CN¥1.28b (down 35% from FY 2020). Profit margin: 9.3% (down from 15% in FY 2020). The decrease in margin was driven by higher expenses. Revenue missed analyst estimates by 2.8%. Earnings per share (EPS) exceeded analyst estimates by 1.8%. Over the next year, revenue is forecast to stay flat compared to a 8.3% growth forecast for the industry in Hong Kong. Over the last 3 years on average, earnings per share has increased by 10% per year but the company’s share price has fallen by 7% per year, which means it is significantly lagging earnings. Reported Earnings • Oct 01
First half 2021 earnings released: EPS CN¥0.22 (vs CN¥0.22 in 1H 2020) The company reported a mediocre first half result with weaker profit margins, although earnings were flat and revenues improved. First half 2021 results: Revenue: CN¥8.19b (up 26% from 1H 2020). Net income: CN¥944.6m (flat on 1H 2020). Profit margin: 12% (down from 14% in 1H 2020). The decrease in margin was driven by higher expenses. Over the last 3 years on average, earnings per share has increased by 20% per year but the company’s share price has fallen by 1% per year, which means it is significantly lagging earnings. Reported Earnings • Aug 29
First half 2021 earnings released: EPS CN¥0.22 (vs CN¥0.22 in 1H 2020) The company reported a mediocre first half result with weaker profit margins, although earnings were flat and revenues improved. First half 2021 results: Revenue: CN¥8.19b (up 26% from 1H 2020). Net income: CN¥944.6m (flat on 1H 2020). Profit margin: 12% (down from 14% in 1H 2020). The decrease in margin was driven by higher expenses. Over the last 3 years on average, earnings per share has increased by 20% per year but the company’s share price has fallen by 3% per year, which means it is significantly lagging earnings. Valuation Update With 7 Day Price Move • Aug 03
Investor sentiment improved over the past week After last week's 17% share price gain to CN¥2.68, the stock trades at a forward P/E ratio of 6x. Average forward P/E is 12x in the Machinery industry in Hong Kong. Total returns to shareholders of 3.9% over the past three years. Simply Wall St's valuation model estimates the intrinsic value at HK$5.07 per share. 
