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.

Risks

  • Zhengzhou Coal Mining Machinery Group is covered by less than 3 analysts.

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

18.8%

SEHK:564

1.1%

HK Machinery

2.5%

HK Market


1 Year Return

10.0%

SEHK:564

8.5%

HK Machinery

-3.9%

HK Market

564 outperformed the Machinery industry which returned 8.5% over the past year.

564 outperformed the Market in Hong Kong which returned -3.9% over the past year.


Share holder returns

564IndustryMarket
7 Day18.8%1.1%2.5%
30 Day19.8%9.4%6.9%
90 Day19.1%2.1%0.8%
1 Year15.1%10.0%11.8%8.5%-0.4%-3.9%
3 Year33.3%25.0%59.2%49.6%19.6%7.6%
5 Year-12.6%-18.9%66.9%49.9%17.7%-1.7%

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 based on future cash flows and its price relative to the stock market?

>50%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Zhengzhou Coal Mining Machinery Group's share price is below the future cash flow value, and at a moderate discount (> 20%).

Zhengzhou Coal Mining Machinery Group's share price is below the future cash flow value, and at a substantial discount (> 40%).


Price Based on Earnings

Zhengzhou Coal Mining Machinery Group is good value based on earnings compared to the HK Machinery industry average.

Zhengzhou Coal Mining Machinery Group is good value based on earnings compared to the Hong Kong market.


Price Based on Expected Growth

Zhengzhou Coal Mining Machinery Group is good value based on expected growth next year.


Price Based on Value of Assets

Zhengzhou Coal Mining Machinery Group is good value based on assets compared to the HK Machinery industry average.


Next Steps

Future Growth

How is Zhengzhou Coal Mining Machinery Group expected to perform in the next 1 to 3 years based on estimates from 2 analysts?

8.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Zhengzhou Coal Mining Machinery Group's revenue is expected to grow by 7% yearly, however this is not considered high growth (20% yearly).

Zhengzhou Coal Mining Machinery Group's earnings are expected to grow by 8.9% yearly, however this is not considered high growth (20% yearly).

Zhengzhou Coal Mining Machinery Group's revenue growth is positive but not above the Hong Kong market average.

Zhengzhou Coal Mining Machinery Group's earnings growth is positive but not above the Hong Kong market average.

Zhengzhou Coal Mining Machinery Group's earnings growth is expected to exceed the low risk savings rate of 2%.


Earnings per Share Growth Estimates


Future Return on Equity

Unable to establish if Zhengzhou Coal Mining Machinery Group will efficiently use shareholders’ funds in the future without estimates of Return on Equity.


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

Zhengzhou Coal Mining Machinery Group has delivered over 20% year on year earnings growth in the past 5 years.

Zhengzhou Coal Mining Machinery Group's 1-year earnings growth exceeds its 5-year average (91.8% vs 41.7%)

Zhengzhou Coal Mining Machinery Group's earnings growth has exceeded the HK Machinery industry average in the past year (91.8% vs 7.4%).


Return on Equity

Zhengzhou Coal Mining Machinery Group has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Zhengzhou Coal Mining Machinery Group used its assets less efficiently than the HK Machinery industry average last year based on Return on Assets.


Return on Capital Employed

Zhengzhou Coal Mining Machinery Group has become profitable over the past 3 years. This is considered to be a significant improvement in its use of capital (Return on Capital Employed).


Next Steps

Financial Health

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


Financial Position Analysis

Zhengzhou Coal Mining Machinery Group is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

Zhengzhou Coal Mining Machinery Group's cash and other short term assets cover its long term commitments.


Debt to Equity History and Analysis

Zhengzhou Coal Mining Machinery Group's level of debt (32.8%) compared to net worth is satisfactory (less than 40%).

The level of debt compared to net worth has increased over the past 5 years (1% vs 32.8% today).

Debt is well covered by operating cash flow (61%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 6.8x coverage).


Balance Sheet

High level of physical assets or inventory.

Debt is covered by short term assets, assets are 4.5x debt.


Next Steps

Dividend

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

5.03%

Expected Dividend Yield


Dividend Yield and Payments Analysis

Zhengzhou Coal Mining Machinery Group's pays a higher dividend yield than the bottom 25% of dividend payers in Hong Kong (2.19%).

Zhengzhou Coal Mining Machinery Group's dividend is below the markets top 25% of dividend payers in Hong Kong (6.06%).

Zhengzhou Coal Mining Machinery Group has been paying a dividend for less than 10 years and during this time payments have been volatile (annual drop of over 20%).

Zhengzhou Coal Mining Machinery Group has only been paying a dividend for 6 years, and since then dividends per share have fallen.


Current Payout to Shareholders

Dividends paid are well covered by earnings (4.4x coverage).


Future Payout to Shareholders

Insufficient estimate data to determine if a dividend will be paid in 3 years and that it will be sustainable.


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?

3.1yrs

Average management tenure


CEO

Hao Jia (49yo)

1.6yrs

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

Hao's remuneration is about average for companies of similar size in Hong Kong.

Insufficient data for Hao to compare compensation growth.


Management Age and Tenure

3.1yrs

Average Tenure

54yo

Average Age

The tenure for the Zhengzhou Coal Mining Machinery Group management team is about average.


Board Age and Tenure

4.6yrs

Average Tenure

54yo

Average Age

The tenure for the Zhengzhou Coal Mining Machinery Group board of directors is about average.


Insider Trading

No 3 month open market individual insider trading information.


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: 1.6yrs
    • Compensation: CN¥1.45m
  • Xinying Wang (54yo)

    Executive Director

    • Tenure: 4.6yrs
  • Youjin Gao (56yo)

    Chief Engineer and Deputy General Manager

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

    Deputy General Manager

    • Tenure: 7.6yrs
  • Hao Jia (49yo)

    Vice Chairman & GM

    • Tenure: 1.6yrs
    • Compensation: CN¥4.26m
  • Haibin Zhang (38yo)

    Deputy GM & Company Secretary

    • Tenure: 4.6yrs
    • Compensation: CN¥1.03m
  • Hua Huang (50yo)

    Chief Financial Officer

    • Tenure: 1.6yrs
  • Bin Wang (59yo)

    Executive Director

    • Tenure: 1.6yrs
    • 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: 1.6yrs
    • Compensation: CN¥1.45m
  • Xinying Wang (54yo)

    Executive Director

    • Tenure: 4.6yrs
  • Yao Liu (44yo)

    Independent Non-Executive Director

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

    Chairman of the Board of Supervisors

    • Tenure: 1.6yrs
    • Compensation: CN¥440.00k
  • Hua Jiang (56yo)

    Independent Non-Executive Director

    • Tenure: 4.6yrs
    • Compensation: CN¥140.00k
  • Xudong Li (49yo)

    Independent Non-Executive Director

    • Tenure: 4.6yrs
    • Compensation: CN¥140.00k
  • Hao Jia (49yo)

    Vice Chairman & GM

    • Tenure: 1.6yrs
    • Compensation: CN¥4.26m
  • Bin Wang (59yo)

    Executive Director

    • Tenure: 1.6yrs
    • 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$13.063b
  • 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 Analysis2019/09/15 12:59
End of Day Share Price2019/09/13 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.