SEHK:552

Stock Analysis Report

China Communications Services

Executive Summary

China Communications Services Corporation Limited provides telecommunications support services worldwide.


Snowflake Analysis

Excellent balance sheet average dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 552 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.5%

552

-2.7%

HK Construction

-3.4%

HK Market


1 Year Return

-18.6%

552

-19.7%

HK Construction

-0.4%

HK Market

Return vs Industry: 552 exceeded the Hong Kong Construction industry which returned -19.8% over the past year.

Return vs Market: 552 underperformed the Hong Kong Market which returned 6.4% over the past year.


Shareholder returns

552IndustryMarket
7 Day-1.5%-2.7%-3.4%
30 Day6.9%-2.0%-1.2%
90 Day24.4%-0.6%3.7%
1 Year-16.3%-18.6%-15.8%-19.7%3.3%-0.4%
3 Year23.3%11.7%-29.4%-37.1%20.4%8.2%
5 Year99.7%69.3%-17.6%-29.8%19.6%-0.4%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is China Communications Services undervalued compared to its fair value and its price relative to the market?

12.1x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 552 (HK$5.56) is trading above our estimate of fair value (HK$4.87)

Significantly Below Fair Value: 552 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 552 is poor value based on its PE Ratio (11.3x) compared to the Construction industry average (9.9x).

PE vs Market: 552 is poor value based on its PE Ratio (11.3x) compared to the Hong Kong market (10.5x).


Price to Earnings Growth Ratio

PEG Ratio: 552 is poor value based on its PEG Ratio (2x)


Price to Book Ratio

PB vs Industry: 552 is overvalued based on its PB Ratio (1.1x) compared to the HK Construction industry average (1.1x).


Next Steps

Future Growth

How is China Communications Services forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

5.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 552's forecast earnings growth (5.8% per year) is above the savings rate (1.6%).

Earnings vs Market: 552's earnings (5.8% per year) are forecast to grow slower than the Hong Kong market (11.3% per year).

High Growth Earnings: 552's earnings are forecast to grow, but not significantly.

Revenue vs Market: 552's revenue (11.7% per year) is forecast to grow faster than the Hong Kong market (10.2% per year).

High Growth Revenue: 552's revenue (11.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 552's Return on Equity is forecast to be low in 3 years time (9.9%).


Next Steps

Past Performance

How has China Communications Services performed over the past 5 years?

7.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 552 has high quality earnings.

Growing Profit Margin: 552's current net profit margins (2.7%) are lower than last year (2.8%).


Past Earnings Growth Analysis

Earnings Trend: 552's earnings have grown by 7.2% per year over the past 5 years.

Accelerating Growth: 552's earnings growth over the past year (6.2%) is below its 5-year average (7.2% per year).

Earnings vs Industry: 552 earnings growth over the past year (6.2%) exceeded the Construction industry -12.3%.


Return on Equity

High ROE: 552's Return on Equity (8.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is China Communications Services's financial position?


Financial Position Analysis

Short Term Liabilities: 552's short term assets (CN¥72.6B) exceed its short term liabilities (CN¥49.8B).

Long Term Liabilities: 552's short term assets (CN¥72.6B) exceed its long term liabilities (CN¥2.2B).


Debt to Equity History and Analysis

Debt Level: 552's debt to equity ratio (1.4%) is considered satisfactory.

Reducing Debt: 552's debt to equity ratio has increased from 0.7% to 1.4% over the past 5 years.

Debt Coverage: 552's debt is well covered by operating cash flow (646.3%).

Interest Coverage: 552 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 552 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 552's debt is covered by short term assets (assets are 152.6x debt).


Next Steps

Dividend

What is China Communications Services's current dividend yield, its reliability and sustainability?

2.86%

Current Dividend Yield


Dividend Yield vs Market

company2.9%marketbottom25%2.2%markettop25%6.2%industryaverage4.4%forecastin3Years3.4%

Current dividend yield vs market & industry

Notable Dividend: 552's dividend (3.06%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.17%).

High Dividend: 552's dividend (3.06%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.02%).


Stability and Growth of Payments

Stable Dividend: 552's dividend payments have been volatile in the past 10 years.

Growing Dividend: 552's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (28.9%), 552's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 552's dividends in 3 years are forecast to be well covered by earnings (34.2% payout ratio).


Next Steps

Management

What is the CEO of China Communications Services's salary, the management and board of directors tenure and is there insider trading?

6.6yrs

Average management tenure


CEO

Furong Si (58yo)

6.1yrs

Tenure

CN¥1,125,000

Compensation

Mr. Furong Si has been the President of China Communications Services Corporation Limited since December 19, 2013. Mr. Si serves as the Managing Director of the Sideline Industrial Management Department of ...


CEO Compensation Analysis

Compensation vs Market: Furong's total compensation ($USD163.29K) is below average for companies of similar size in the Hong Kong market ($USD547.05K).

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


Management Age and Tenure

6.6yrs

Average Tenure

49yo

Average Age

Experienced Management: 552's management team is seasoned and experienced (6.6 years average tenure).


Board Age and Tenure

4.6yrs

Average Tenure

59.5yo

Average Age

Experienced Board: 552's board of directors are considered experienced (4.6 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.


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Ownership Breakdown

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


Management Team

  • Terence Chung (45yo)

    Company Secretary & Deputy CFO

    • Yafan Xiao

      Chief Executive Officer of Hunan Communications Services Company Limited

      • Tenure: 12.8yrs
    • Zhiyong Zhang (54yo)

      Chairman

      • Tenure: 1.8yrs
      • Compensation: CN¥477.00k
    • Dong Yan (47yo)

      Executive VP & Chief Risk Officer

      • Tenure: 6.6yrs
      • Compensation: CN¥998.00k
    • Yonghe Yang

      Chief Executive Officer of Fujian Communications Services Company Limited

      • Tenure: 12.8yrs
    • Biao Chen

      Chief Executive Officer of Jiangxi Communications Services Company Limited

      • Tenure: 12.8yrs
    • Chuguo Xu (55yo)

      Executive Vice President

      • Tenure: 5.5yrs
    • Shiping Liang (49yo)

      Executive Vice President

      • Tenure: 9.8yrs
    • Furong Si (58yo)

      President & Executive Director

      • Tenure: 6.1yrs
      • Compensation: CN¥1.13m
    • Xu Zhang (49yo)

      Executive VP

      • Tenure: 1.1yrs
      • Compensation: CN¥84.00k

    Board Members

    • Xiaochu Wang (61yo)

      Honorary Chairman

      • Tenure: 11.8yrs
    • Li Zhengmao (57yo)

      Non-Executive Director

      • Tenure: 7.2yrs
    • Taishi Wu (71yo)

      Independent Non-Executive Director

      • Tenure: 4.6yrs
      • Compensation: CN¥150.00k
    • Zhiyong Zhang (54yo)

      Chairman

      • Tenure: 1.8yrs
      • Compensation: CN¥477.00k
    • Fang Han (46yo)

      Chairperson of Supervisory Committee

      • Tenure: 4.1yrs
    • Tingjie Lv (64yo)

      Independent Non-Executive Director

      • Tenure: 4.6yrs
      • Compensation: CN¥150.00k
    • Francis Siu (65yo)

      Independent Non-Executive Director

      • Tenure: 7.6yrs
      • Compensation: CN¥280.00k
    • Furong Si (58yo)

      President & Executive Director

      • Tenure: 6.1yrs
      • Compensation: CN¥1.13m
    • Linfei Liu (62yo)

      Independent Non-Executive Director

      • Tenure: 3.6yrs
      • Compensation: CN¥150.00k
    • Xu Zhang (49yo)

      Executive VP

      • Tenure: 1.1yrs
      • Compensation: CN¥84.00k

    Company Information

    China Communications Services Corporation Limited's company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: China Communications Services Corporation Limited
    • Ticker: 552
    • Exchange: SEHK
    • Founded: 2006
    • Industry: Construction and Engineering
    • Sector: Capital Goods
    • Market Cap: HK$40.933b
    • Shares outstanding: 6.93b
    • Website: https://www.chinaccs.com.hk

    Number of Employees


    Location

    • China Communications Services Corporation Limited
    • No. 19 Chaoyangmen Beidajie
    • 13th Floor
    • Beijing
    • 100010
    • China

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    552SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares-Foreign ListedHKHKDDec 2006
    CMWDB (Deutsche Boerse AG)YesForeign Shares-Foreign ListedDEEURDec 2006
    CUCS.FOTCPK (Pink Sheets LLC)YesForeign Shares-Foreign ListedUSUSDDec 2006
    552SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDDec 2006
    552SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDDec 2006
    CUCS.YOTCPK (Pink Sheets LLC)ADRUSUSDOct 2008

    Biography

    China Communications Services Corporation Limited provides telecommunications support services worldwide. It offers telecommunications infrastructure services, including communications network consultation, planning, design, engineering, construction, and supervision for fixed-line, mobile, broadband networks, and supporting systems; construction services of ancillary communications networks; and integrated solutions for informatization, as well as smart solutions for intelligentization of industries. The company also provides business process outsourcing services comprising network maintenance services that include fiber optic and electric cables, mobile base stations, network equipment, and terminals; general facilities management services for customers data centers, cloud computing bases, commercial and residential buildings, high-speed railway stations, airports, etc.; warehousing, logistics, procurement agency, distribution wholesaling, and import and export agency services; and telecommunications and informatization equipment, non-telecommunications equipment, and terminals distribution services, as well as operates distribution stores under the ZhongTongFu brand that sells and repairs terminals, and provides telecom operators’ agency services. In addition, it offers applications, content, and other services, such as system integration, software development and system support, value-added, and other services. Further, the company provides submarine cable installation and other related services. It serves telecommunications operators; non-telecom operator customers, such as government agencies, financial institutions, broadcasting and television enterprises, construction enterprises, and transportation and power sectors; and corporates and other enterprises. The company was founded in 2006 and is based in Beijing, China. China Communications Services Corporation Limited is a subsidiary of China Telecommunications Corporation. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/28 12:50
    End of Day Share Price2020/01/24 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.