SEHK:3996

Stock Analysis Report

China Energy Engineering

Executive Summary

China Energy Engineering Corporation Limited provides solutions to the power industry in the People’s Republic of China and internationally.


Snowflake Analysis

Very undervalued with adequate balance sheet.


Similar Companies

Share Price & News

How has China Energy Engineering's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 3996 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-16.0%

3996

-2.3%

HK Construction

-3.2%

HK Market


1 Year Return

-17.7%

3996

-28.6%

HK Construction

-10.2%

HK Market

Return vs Industry: 3996 exceeded the Hong Kong Construction industry which returned -28.6% over the past year.

Return vs Market: 3996 underperformed the Hong Kong Market which returned -10.2% over the past year.


Shareholder returns

3996IndustryMarket
7 Day-16.0%-2.3%-3.2%
30 Day-17.7%-4.3%-3.3%
90 Day-8.1%-5.9%0.2%
1 Year-14.6%-17.7%-25.1%-28.6%-6.9%-10.2%
3 Year-41.0%-46.3%-35.3%-42.3%11.7%0.4%
5 Yearn/a-27.7%-38.4%11.1%-7.3%

Price Volatility Vs. Market

How volatile is China Energy Engineering's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is China Energy Engineering 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: 3996 (HK$0.79) is trading below our estimate of fair value (HK$3)

Significantly Below Fair Value: 3996 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 3996 is good value based on its PE Ratio (4.8x) compared to the Construction industry average (8.3x).

PE vs Market: 3996 is good value based on its PE Ratio (4.8x) compared to the Hong Kong market (9.9x).


Price to Earnings Growth Ratio

PEG Ratio: 3996 is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: 3996 is good value based on its PB Ratio (0.4x) compared to the HK Construction industry average (1x).


Next Steps

Future Growth

How is China Energy Engineering forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

10.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 3996's forecast earnings growth (10.1% per year) is above the savings rate (1.6%).

Earnings vs Market: 3996's earnings (10.1% per year) are forecast to grow slower than the Hong Kong market (11.8% per year).

High Growth Earnings: 3996's earnings are forecast to grow, but not significantly.

Revenue vs Market: 3996's revenue (5.7% per year) is forecast to grow slower than the Hong Kong market (9.7% per year).

High Growth Revenue: 3996's revenue (5.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 3996's Return on Equity is forecast to be low in 3 years time (9.4%).


Next Steps

Past Performance

How has China Energy Engineering performed over the past 5 years?

7.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 3996 has high quality earnings.

Growing Profit Margin: 3996's current net profit margins (1.9%) are lower than last year (2.3%).


Past Earnings Growth Analysis

Earnings Trend: 3996's earnings have grown by 7.7% per year over the past 5 years.

Accelerating Growth: 3996's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 3996 had negative earnings growth (-13.4%) over the past year, making it difficult to compare to the Construction industry average (-5.4%).


Return on Equity

High ROE: 3996's Return on Equity (8.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is China Energy Engineering's financial position?


Financial Position Analysis

Short Term Liabilities: 3996's short term assets (CN¥255.4B) exceed its short term liabilities (CN¥218.1B).

Long Term Liabilities: 3996's short term assets (CN¥255.4B) exceed its long term liabilities (CN¥85.6B).


Debt to Equity History and Analysis

Debt Level: 3996's debt to equity ratio (94.5%) is considered high.

Reducing Debt: 3996's debt to equity ratio has reduced from 144.1% to 94.5% over the past 5 years.

Debt Coverage: 3996's debt is not well covered by operating cash flow (6.5%).

Interest Coverage: 3996's interest payments on its debt are well covered by EBIT (5x coverage).


Balance Sheet

Inventory Level: 3996 has a high level of physical assets or inventory.

Debt Coverage by Assets: 3996's debt is covered by short term assets (assets are 2.7x debt).


Next Steps

Dividend

What is China Energy Engineering's current dividend yield, its reliability and sustainability?

4.30%

Current Dividend Yield


Dividend Yield vs Market

company4.3%marketbottom25%2.3%markettop25%6.4%industryaverage4.6%forecastin3Years5.1%

Current dividend yield vs market & industry

Notable Dividend: 3996's dividend (4.3%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.3%).

High Dividend: 3996's dividend (4.3%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.4%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, 3996 has been paying a dividend for less than 10 years.

Growing Dividend: 3996's dividend payments have increased, but the company has only paid a dividend for 4 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (20.6%), 3996's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 3996's dividends in 3 years are forecast to be well covered by earnings (19.4% payout ratio).


Next Steps

Management

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

4.9yrs

Average management tenure


CEO

Yanzhang Ding (55yo)

CN¥984,000

Compensation

Mr. Yan Zhang Ding has been General Manager and Vice Chairman at China Energy Engineering Corporation Limited since December 19, 2014 and also serves as its Chief Executive. Mr. Ding is mainly responsible  ...


CEO Compensation Analysis

Compensation vs Market: Yanzhang's total compensation ($USD139.99K) is below average for companies of similar size in the Hong Kong market ($USD558.57K).

Compensation vs Earnings: Yanzhang's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Jianping Wang
Chairman of the Board5.2yrsCN¥984.00kno data
Yanzhang Ding
Vice Chairman0yrsCN¥984.00kno data
Guanzhong Chen
Chief Accountant5.2yrsCN¥579.65kno data
Yun Wu
Chief Information Officer0yrsno datano data
Qiurong Duan
Secretary to the Board & Joint Company Secretary4.9yrsCN¥828.21kno data
Suet Wing Leung
Joint Company Secretary1.3yrsno datano data

4.9yrs

Average Tenure

55yo

Average Age

Experienced Management: 3996's management team is considered experienced (4.9 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Jianping Wang
Chairman of the Board5.2yrsCN¥984.00kno data
Yanzhang Ding
Vice Chairman0yrsCN¥984.00kno data
Dexiang Fu
Supervisor4.8yrsno datano data
Yuanchen Ding
Independent Non-Executive Director5.2yrsCN¥60.00kno data
Yuk Ming Cheung
Independent Non-Executive Director4.8yrsCN¥56.00kno data
Chuanjing Ma
Non Executive Director5.2yrsno datano data
Zhongxin Wei
Supervisor4.8yrsno datano data
Zengyong Wang
Chairman of the Supervisory Committee3.2yrsno datano data
Xueshi Liu
Non-Executive Director2.2yrsno datano data
Xinbo Si
Non-Executive Director2.2yrsno datano data

4.8yrs

Average Tenure

60.5yo

Average Age

Experienced Board: 3996's board of directors are considered experienced (4.8 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

China Energy Engineering Corporation Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: China Energy Engineering Corporation Limited
  • Ticker: 3996
  • Exchange: SEHK
  • Founded: 2014
  • Industry: Construction and Engineering
  • Sector: Capital Goods
  • Market Cap: HK$27.018b
  • Shares outstanding: 30.02b
  • Website: https://en.ceec.net.cn

Number of Employees


Location

  • China Energy Engineering Corporation Limited
  • Building 1
  • No. 26, West Dawang Road
  • Beijing
  • 100022
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
3996SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares-Foreign ListedHKHKDDec 2015
200000DB (Deutsche Boerse AG)YesForeign Shares-Foreign ListedDEEURDec 2015

Biography

China Energy Engineering Corporation Limited provides solutions to the power industry in the People’s Republic of China and internationally. The company’s Survey, Design and Consulting segment offers survey and design services for large scale power generation, transformation, and transmission projects of fossil-fuel power, hydropower, nuclear power, wind farm, and solar power; and various consultancy services, including the policy and planning of the power industry, as well as testing, evaluation, and supervision of power projects. Its Construction and Contracting segment provides infrastructure construction contracting services to the power generation, transformation, and transmission projects of fossil-fuel power, hydropower, nuclear power, wind farm, and solar power; and undertakes other construction projects, such as water conservancy facilities, transportation, municipal engineering, and industrial and civil construction projects. The company’s Equipment Manufacturing segment designs, manufactures, and sells auxiliary machinery equipment for power plants, power grid equipment, steel structures, energy-saving and environmental-friendly equipment, and complete sets of equipment. Its Civil Explosives and Cement Production segment manufactures and sells civil explosives and cement; and offers blasting services for the construction projects. The company’s Investment and Other Businesses Segment invests in and operates power plants; and infrastructure projects, such as railways and roads, and environmental water projects, as well as engages in the real estate development business. The company was founded in 2014 and is headquartered in Beijing, the People’s Republic of China. The company has a strategic cooperation framework agreement with China National Nuclear Corporation. The company is a subsidiary of China Energy Engineering Group Co., Ltd. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/25 13:08
End of Day Share Price2020/02/25 00:00
Earnings2019/09/30
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.