SEHK:385

Stock Analysis Report

Chinney Alliance Group

Executive Summary

Chinney Alliance Group Limited, an investment holding company, engages in the trading of plastic and chemical products, and building related contracting activities.

Rewards

PE ratio (3.9x) is below the Hong Kong market (10.5x)

Earnings grew by 24.3% over the past year

Pays a reliable dividend of 4.62%

Risk Analysis

High level of non-cash earnings

Does not have a meaningful market cap (HK$761M)



Snowflake Analysis

Excellent balance sheet with proven track record and pays a dividend.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 385 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.3%

385

-0.9%

HK Construction

1.0%

HK Market


1 Year Return

0.8%

385

-16.4%

HK Construction

6.5%

HK Market

Return vs Industry: 385 exceeded the Hong Kong Construction industry which returned -16.2% over the past year.

Return vs Market: 385 underperformed the Hong Kong Market which returned 6.4% over the past year.


Shareholder returns

385IndustryMarket
7 Day-2.3%-0.9%1.0%
30 Day-1.5%-0.5%3.7%
90 Day-10.5%1.5%8.0%
1 Year5.2%0.8%-12.3%-16.4%10.4%6.5%
3 Year36.8%20.8%-27.7%-35.6%25.9%13.1%
5 Year111.5%73.0%-20.1%-32.0%22.2%1.8%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Chinney Alliance Group undervalued compared to its fair value and its price relative to the market?

3.79x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 385 (HK$1.3) is trading above our estimate of fair value (HK$0.76)

Significantly Below Fair Value: 385 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 385 is good value based on its PE Ratio (3.9x) compared to the Construction industry average (9.9x).

PE vs Market: 385 is good value based on its PE Ratio (3.9x) compared to the Hong Kong market (10.5x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 385's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 385 is good value based on its PB Ratio (0.4x) compared to the HK Construction industry average (1x).


Next Steps

Future Growth

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

12.1%

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 Chinney Alliance 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 Chinney Alliance Group performed over the past 5 years?

7.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 385 has a high level of non-cash earnings.

Growing Profit Margin: 385's current net profit margins (3.5%) are higher than last year (2.8%).


Past Earnings Growth Analysis

Earnings Trend: 385's earnings have grown by 7% per year over the past 5 years.

Accelerating Growth: 385's earnings growth over the past year (24.3%) exceeds its 5-year average (7% per year).

Earnings vs Industry: 385 earnings growth over the past year (24.3%) exceeded the Construction industry -12.3%.


Return on Equity

High ROE: 385's Return on Equity (10.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Chinney Alliance Group's financial position?


Financial Position Analysis

Short Term Liabilities: 385's short term assets (HK$2.7B) exceed its short term liabilities (HK$1.5B).

Long Term Liabilities: 385's short term assets (HK$2.7B) exceed its long term liabilities (HK$162.3M).


Debt to Equity History and Analysis

Debt Level: 385's debt to equity ratio (8.4%) is considered satisfactory.

Reducing Debt: 385's debt to equity ratio has reduced from 39% to 8.4% over the past 5 years.

Debt Coverage: 385's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: 385's interest payments on its debt are well covered by EBIT (31.5x coverage).


Balance Sheet

Inventory Level: 385 has a high level of physical assets or inventory.

Debt Coverage by Assets: 385's debt is covered by short term assets (assets are 16.4x debt).


Next Steps

Dividend

What is Chinney Alliance Group's current dividend yield, its reliability and sustainability?

4.69%

Current Dividend Yield


Dividend Yield vs Market

company4.7%marketbottom25%2.2%markettop25%6.1%industryaverage4.3%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: 385's dividend (4.62%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.17%).

High Dividend: 385's dividend (4.62%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.02%).


Stability and Growth of Payments

Stable Dividend: 385's dividends per share have been stable in the past 10 years.

Growing Dividend: 385's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (17.8%), 385'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

What is the CEO of Chinney Alliance Group's salary, the management and board of directors tenure and is there insider trading?

8.2yrs

Average board tenure


CEO

Zuric Chan (64yo)

7.8yrs

Tenure

HK$3,266,000

Compensation

Mr. Yuen-Keung Chan, also known as Zuric, has been an Managing Director & Executive Director of Chinney Investments Ltd. since April 01, 2018 and has been its Vice Chairman since 13 July 2018. Mr. Chan has ...


CEO Compensation Analysis

Compensation vs Market: Zuric's total compensation ($USD420.05K) is above average for companies of similar size in the Hong Kong market ($USD228.16K).

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


Board Age and Tenure

8.2yrs

Average Tenure

64yo

Average Age

Experienced Board: 385's board of directors are considered experienced (8.2 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyHK$266,05718 Jul 19
Chinney Capital Limited
EntityCompany
Shares134,000
Max PriceHK$1.99
BuyHK$188,81716 Jul 19
Chinney Capital Limited
EntityCompany
Shares106,000
Max PriceHK$1.78
BuyHK$431,45116 Jul 19
Chinney Capital Limited
EntityCompany
Shares232,000
Max PriceHK$1.86
BuyHK$240,14111 Jul 19
Chinney Capital Limited
EntityCompany
Shares134,000
Max PriceHK$1.79
BuyHK$251,89609 Jul 19
Chinney Capital Limited
EntityCompany
Shares148,000
Max PriceHK$1.70
BuyHK$54,65904 Jul 19
Chinney Capital Limited
EntityCompany
Shares32,000
Max PriceHK$1.71
BuyHK$605,21803 Jul 19
Chinney Capital Limited
EntityCompany
Shares366,000
Max PriceHK$1.65
BuyHK$392,20503 Jul 19
Chinney Capital Limited
EntityCompany
Shares228,000
Max PriceHK$1.72

Ownership Breakdown

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


Management Team

  • James Wong (81yo)

    Chairman

    • Tenure: 22yrs
  • Sam Lo (53yo)

    Financial Controller & Company Secretary

    • Zuric Chan (64yo)

      Vice Chairman & MD

      • Tenure: 7.8yrs
      • Compensation: HK$3.27m
    • Philip Lam (76yo)

      Executive Director

      • Tenure: 7.4yrs
      • Compensation: HK$4.28m
    • Pui-Shan Chan

      Qualified Accountant

      • James Wong (55yo)

        Executive Director

        • Tenure: 9.4yrs
        • Compensation: HK$4.59m
      • Kwok-Keung Wong (60yo)

        Managing Director of Chinney Alliance Engineering Limited


        Board Members

        • James Wong (81yo)

          Chairman

          • Tenure: 22yrs
        • Zuric Chan (64yo)

          Vice Chairman & MD

          • Tenure: 7.8yrs
          • Compensation: HK$3.27m
        • Ronald Blake (84yo)

          Independent Non-Executive Director

          • Tenure: 6.6yrs
          • Compensation: HK$100.00k
        • Yuen-Tin Ng (67yo)

          Independent Non-Executive Director

          • Tenure: 8.6yrs
          • Compensation: HK$100.00k
        • Wendy Gan (54yo)

          Non-Executive Director

          • Tenure: 4.6yrs
          • Compensation: HK$100.00k
        • Christopher Wu (56yo)

          Independent Non-Executive Director

          • Tenure: 7.8yrs
          • Compensation: HK$100.00k
        • Philip Lam (76yo)

          Executive Director

          • Tenure: 7.4yrs
          • Compensation: HK$4.28m
        • James Wong (55yo)

          Executive Director

          • Tenure: 9.4yrs
          • Compensation: HK$4.59m
        • Chi-Kin Chan (63yo)

          Director of Shun Cheong Investments Limited

          Company Information

          Chinney Alliance Group Limited's company bio, employee growth, exchange listings and data sources


          Key Information

          • Name: Chinney Alliance Group Limited
          • Ticker: 385
          • Exchange: SEHK
          • Founded:
          • Industry: Construction and Engineering
          • Sector: Capital Goods
          • Market Cap: HK$755.522m
          • Shares outstanding: 594.90m
          • Website: https://www.chinney-alliance.com

          Number of Employees


          Location

          • Chinney Alliance Group Limited
          • Wing On Centre
          • 23rd Floor
          • Central
          • Hong Kong

          Listings

          TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
          385SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDNov 1993

          Biography

          Chinney Alliance Group Limited, an investment holding company, engages in the trading of plastic and chemical products, and building related contracting activities. It operates through five segments: Plastic and Chemical Products, Building Related Contracting Services, Building Construction, Foundation Piling and Ground Investigation, and Others. The company offers building related contracting services, including engineering contracting services in the air-conditioning industry and maintenance services; superstructure construction work services; and foundation piling, and drilling and site investigation services. It is also involved in contracting of building aluminum works; the distribution and installation of aviation systems and other hi-tech products, as well as mechanical, electrical, and building supplies; trading of electrical, air-conditioning, and other building supply products; and maintenance of air-conditioning, electrical generators, water pumps, and fire prevention and fighting systems. In addition, the company trades in building decoration materials, generators, and electrical and mechanical engineering materials and equipment; and holds properties and investments. Further, it is involved in the treasury functions; basement construction works; agency trading of industrial products; equipment and machinery leasing; construction material testing; design, installation, repair, and maintenance of electrical and mechanical systems; trading of electrical installation products; provision of management services; and sale and installation of air-conditioning systems. It primarily serves public and private sectors in Hong Kong, Mainland China, Macau, and Singapore. The company is headquartered in Central, Hong Kong. 


          Company Analysis and Financial Data Status

          All financial data provided by Standard & Poor's Capital IQ.
          DataLast Updated (UTC time)
          Company Analysis2020/01/17 12:36
          End of Day Share Price2020/01/17 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.