SEHK:564

Stock Analysis Report

Zhengzhou Coal Mining Machinery Group

Executive Summary

Zhengzhou Coal Mining Machinery Group Company Limited, together with its subsidiaries, manufactures and sells coal mining and excavating equipment in the People’s Republic of China, Germany, and internationally.

Snowflake

Fundamentals

Very undervalued with excellent balance sheet.


Similar Companies

Share Price & News

How has Zhengzhou Coal Mining Machinery Group's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-1.0%

564

7.4%

HK Machinery

3.1%

HK Market


1 Year Return

6.5%

564

17.4%

HK Machinery

0.5%

HK Market

Return vs Industry: 564 underperformed the Hong Kong Machinery industry which returned 17.4% over the past year.

Return vs Market: 564 exceeded the Hong Kong Market which returned 0.5% over the past year.


Shareholder returns

564IndustryMarket
7 Day-1.0%7.4%3.1%
30 Day-0.2%-1.0%-1.8%
90 Day11.1%-3.0%-4.8%
1 Year11.5%6.5%20.7%17.4%4.1%0.5%
3 Year17.5%10.2%54.0%44.6%15.8%4.2%
5 Year-12.5%-18.8%69.8%52.1%18.9%-0.9%

Price Volatility Vs. Market

How volatile is Zhengzhou Coal Mining Machinery Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Zhengzhou Coal Mining Machinery Group undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: 564 (HK$4.1) is trading below our estimate of fair value (HK$26.18)

Significantly Undervalued: 564 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 564 is good value based on its PE Ratio (5.8x) compared to the Machinery industry average (9.5x).

PE vs Market: 564 is good value based on its PE Ratio (5.8x) compared to the Hong Kong market (10.3x).


Price to Earnings Growth Ratio

Low PEG Ratio: 564 is good value based on its PEG Ratio (0.7x)


Price to Book Ratio

PB vs Industry: 564 is good value based on its PB Ratio (0.5x) compared to the HK Machinery industry average (0.8x).


Next Steps

Future Growth

How is Zhengzhou Coal Mining Machinery Group forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

8.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 564's forecast earnings growth (8% per year) is above the savings rate (2%).

Earnings vs Market: 564's earnings (8% per year) are forecast to grow slower than the Hong Kong market (11.3% per year).

High Growth Earnings: 564's earnings are forecast to grow, but not significantly.

Revenue vs Market: 564's revenue (5.2% per year) is forecast to grow slower than the Hong Kong market (10% per year).

High Growth Revenue: 564's revenue (5.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: 564's Return on Equity is forecast to be low in 3 years time (15.5%).


Next Steps

Past Performance

How has Zhengzhou Coal Mining Machinery Group performed over the past 5 years?

41.7%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: 564's earnings have grown significantly by 41.7% per year over the past 5 years.

Accelerating Growth: 564's earnings growth over the past year (91.8%) exceeds its 5-year average (41.7% per year).

Earnings vs Industry: 564 earnings growth over the past year (91.8%) exceeded the Machinery industry 7.4%.


Return on Equity

High ROE: 564's Return on Equity (9.4%) is considered low.


Return on Assets

ROA vs Industry: 564's Return on Assets is below or equal to the Machinery industry average last year.


Return on Capital Employed

ROCE Improving: 564's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Zhengzhou Coal Mining Machinery Group's financial position?


Financial Position Analysis

Short Term Liabilities: 564's short term assets (CN¥18.9B) exceeds its short term liabilities (CN¥12.4B)

Long Term Liabilities: 564's short term assets (18.9B) exceeds its long term liabilities (3.7B)


Debt to Equity History and Analysis

Debt Level: 564's debt to equity ratio (32.8%) is considered satisfactory

Reducing Debt: 564's debt to equity ratio has increased from 1% to 32.8% over the past 5 years.

Debt Coverage: 564's debt is well covered by operating cash flow (61%).

Interest Coverage: 564's interest payments on its debt are well covered by EBIT (6.8x coverage).


Balance Sheet

Inventory Level: 564 has a high level of physical assets or inventory.

Debt Coverage by Assets: 564's debt is covered by short term assets (assets are 4.496150x debt).


Next Steps

Dividend

What is Zhengzhou Coal Mining Machinery Group's current dividend yield, its reliability and sustainability?

3.91%

Current Dividend Yield


Dividend Yield vs Market

company3.9%marketbottom25%2.3%markettop25%6.3%industryaverage3.1%forecastin3Years5.9%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: 564's dividend (3.91%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.27%).

High Dividend: 564's dividend (3.91%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.25%).

Stable Dividend: 564 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 564 has only been paying a dividend for 6 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (22.6%), 564's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 564's dividends in 3 years are forecast to be well covered by earnings (30% payout ratio).


Next Steps

Management

What is the CEO of Zhengzhou Coal Mining Machinery Group's salary, the management and board of directors tenure and is there insider trading?

3.2yrs

Average management tenure


CEO

Hao Jia (49yo)

1.7yrs

Tenure

CN¥4,263,000

Compensation

Mr. Hao Jia has been Vice Chairman and General Manager of Zhengzhou Coal Mining Machinery Group Co., Ltd. since February 12, 2018 and served as its Deputy General Manager since February 16, 2015 until Febr ...


CEO Compensation Analysis

Compensation vs. Market: Hao has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the Hong Kong market.

Compensation vs Earnings: Insufficient data to compare Hao's compensation with company performance.


Management Age and Tenure

3.2yrs

Average Tenure

54yo

Average Age

Experienced Management: 564's management team is considered experienced (3.2 years average tenure).


Board Age and Tenure

4.7yrs

Average Tenure

54yo

Average Age

Experienced Board: 564's board of directors are considered experienced (4.7 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

SellCN¥285,97310 May 19
UBS Asset Management
EntityCompany
Shares74,000
Max PriceCN¥3.86
BuyCN¥799,80006 May 19
UBS Asset Management
EntityCompany
Shares200,000
Max PriceCN¥4.00
SellCN¥3,184,32123 Apr 19
UBS Asset Management
EntityCompany
Shares800,000
Max PriceCN¥3.98
BuyCN¥6,036,37415 Mar 19
UBS Asset Management
EntityCompany
Shares1,591,200
Max PriceCN¥3.79

Ownership Breakdown


Management Team

  • Chengyao Jiao (56yo)

    Executive Chairman

    • Tenure: 10.8yrs
    • Compensation: CN¥1.30m
  • Jiayu Xiang (54yo)

    Executive Director

    • Tenure: 10.8yrs
    • Compensation: CN¥1.30m
  • Zugang Fu (54yo)

    Executive Director

    • Tenure: 1.7yrs
    • Compensation: CN¥1.45m
  • Xinying Wang (54yo)

    Executive Director

    • Tenure: 4.7yrs
  • Youjin Gao (56yo)

    Chief Engineer and Deputy General Manager

    • Tenure: 10.8yrs
  • Qi Fu (50yo)

    Deputy General Manager

    • Tenure: 7.7yrs
  • Hao Jia (49yo)

    Vice Chairman & GM

    • Tenure: 1.7yrs
    • Compensation: CN¥4.26m
  • Haibin Zhang (38yo)

    Deputy GM & Company Secretary

    • Tenure: 4.7yrs
    • Compensation: CN¥1.03m
  • Hua Huang (50yo)

    Chief Financial Officer

    • Tenure: 1.7yrs
  • Bin Wang (59yo)

    Executive Director

    • Tenure: 1.7yrs
    • Compensation: CN¥4.12m

Board Members

  • Chengyao Jiao (56yo)

    Executive Chairman

    • Tenure: 10.8yrs
    • Compensation: CN¥1.30m
  • Jiayu Xiang (54yo)

    Executive Director

    • Tenure: 10.8yrs
    • Compensation: CN¥1.30m
  • Zugang Fu (54yo)

    Executive Director

    • Tenure: 1.7yrs
    • Compensation: CN¥1.45m
  • Xinying Wang (54yo)

    Executive Director

    • Tenure: 4.7yrs
  • Yao Liu (44yo)

    Independent Non-Executive Director

    • Tenure: 5.3yrs
    • Compensation: CN¥158.00k
  • Qiang Liu (50yo)

    Chairman of the Board of Supervisors

    • Tenure: 1.7yrs
    • Compensation: CN¥440.00k
  • Hua Jiang (56yo)

    Independent Non-Executive Director

    • Tenure: 4.7yrs
    • Compensation: CN¥140.00k
  • Xudong Li (49yo)

    Independent Non-Executive Director

    • Tenure: 4.7yrs
    • Compensation: CN¥140.00k
  • Hao Jia (49yo)

    Vice Chairman & GM

    • Tenure: 1.7yrs
    • Compensation: CN¥4.26m
  • Bin Wang (59yo)

    Executive Director

    • Tenure: 1.7yrs
    • Compensation: CN¥4.12m

Company Information

Zhengzhou Coal Mining Machinery Group Company Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Zhengzhou Coal Mining Machinery Group Company Limited
  • Ticker: 564
  • Exchange: SEHK
  • Founded: 1958
  • Industry: Construction Machinery and Heavy Trucks
  • Sector: Capital Goods
  • Market Cap: HK$11.115b
  • Shares outstanding: 1.73b
  • Website: https://www.zzmj.com

Number of Employees


Location

  • Zhengzhou Coal Mining Machinery Group Company Limited
  • No. 167, 9th Street
  • Econ-Tech Development Zone
  • Zhengzhou
  • Henan Province
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
601717SHSE (Shanghai Stock Exchange)Domestic SharesCNCNYAug 2010
601717XSSC (Shanghai Stock Exchange - Shanghai - Hong Kong Stock Connect)Domestic SharesCNCNYAug 2010
564SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares-Foreign ListedHKHKDDec 2012
ZGCDB (Deutsche Boerse AG)YesForeign Shares-Foreign ListedDEEURDec 2012
564SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDDec 2012
564SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDDec 2012

Biography

Zhengzhou Coal Mining Machinery Group Company Limited, together with its subsidiaries, manufactures and sells coal mining and excavating equipment in the People’s Republic of China, Germany, and internatio ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/17 12:54
End of Day Share Price2019/10/17 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.