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 Analysis

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

Stable Share Price: 564's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-2.3%

564

-1.0%

HK Machinery

0.2%

HK Market


1 Year Return

-23.3%

564

-17.2%

HK Machinery

-22.0%

HK Market

Return vs Industry: 564 underperformed the Hong Kong Machinery industry which returned -17.5% over the past year.

Return vs Market: 564 underperformed the Hong Kong Market which returned -21.6% over the past year.


Shareholder returns

564IndustryMarket
7 Day-2.3%-1.0%0.2%
30 Day-28.1%-18.3%-12.4%
90 Day-27.4%-20.8%-16.4%
1 Year-19.7%-23.3%-14.8%-17.2%-19.1%-22.0%
3 Year-38.6%-42.4%22.4%14.7%-3.7%-13.4%
5 Year-50.5%-54.1%2.2%-6.0%-15.2%-28.8%

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

Below Fair Value: 564 (HK$2.99) is trading below our estimate of fair value (HK$35.27)

Significantly Below Fair Value: 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 (4.6x) compared to the Machinery industry average (9.7x).

PE vs Market: 564 is good value based on its PE Ratio (4.6x) compared to the Hong Kong market (9.1x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 564's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 564 is good value based on its PB Ratio (0.4x) 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?

9.0%

Forecasted Capital Goods industry annual growth in earnings


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: Insufficient data to determine if 564's forecast earnings growth is above the savings rate (1.6%).

Earnings vs Market: Insufficient data to determine if 564's earnings are forecast to grow faster than the Hong Kong market

High Growth Earnings: Insufficient data to determine if earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: Insufficient data to determine if 564's revenue is forecast to grow faster than the Hong Kong market.

High Growth Revenue: Insufficient data to determine if 564's revenue is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if 564's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

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

60.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 564 has high quality earnings.

Growing Profit Margin: 564's current net profit margins (4%) are higher than last year (3.2%).


Past Earnings Growth Analysis

Earnings Trend: 564's earnings have grown significantly by 60.4% per year over the past 5 years.

Accelerating Growth: 564's earnings growth over the past year (25%) is below its 5-year average (60.4% per year).

Earnings vs Industry: 564 earnings growth over the past year (25%) exceeded the Machinery industry 4.5%.


Return on Equity

High ROE: 564's Return on Equity (8.7%) is considered low.


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¥20.2B) exceed its short term liabilities (CN¥12.3B).

Long Term Liabilities: 564's short term assets (CN¥20.2B) exceed its long term liabilities (CN¥4.3B).


Debt to Equity History and Analysis

Debt Level: 564's debt to equity ratio (33.7%) is considered satisfactory.

Reducing Debt: 564's debt to equity ratio has increased from 1% to 33.7% over the past 5 years.

Debt Coverage: 564's debt is well covered by operating cash flow (64.5%).

Interest Coverage: 564's interest payments on its debt are well covered by EBIT (10.3x 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 4.6x debt).


Next Steps

Dividend

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

6.77%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 564's dividend (6.77%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.57%).

High Dividend: 564's dividend (6.77%) is low compared to the top 25% of dividend payers in the Hong Kong market (7.33%).


Stability and Growth of Payments

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 7 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (30.8%), 564'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

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

3.7yrs

Average management tenure


CEO

Hao Jia (49yo)

2.17s

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's total compensation ($USD601.58K) is about average for companies of similar size in the Hong Kong market ($USD512.84K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Chengyao Jiao
Executive Chairman11.33yrsCN¥1.30m0.17% CN¥16.1m
Hao Jia
Vice Chairman & GM2.17yrsCN¥4.26mno data
Jiayu Xiang
Executive Director11.33yrsCN¥1.30m0.11% CN¥10.5m
Zugang Fu
Executive Director2.17yrsCN¥1.45m0.16% CN¥15.2m
Xinying Wang
Executive Director5.17yrsno data0.11% CN¥10.5m
Haibin Zhang
Deputy GM & Company Secretary5.17yrsCN¥1.03mno data
Bin Wang
Executive Director2.17yrsCN¥4.12mno data
Hua Huang
Chief Financial Officer2.17yrsno datano data
Youjin Gao
Chief Engineer and Deputy General Manager 11.33yrsno datano data
Qi Fu
Deputy General Manager8.17yrsno datano data

3.7yrs

Average Tenure

54yo

Average Age

Experienced Management: 564's management team is considered experienced (3.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Chengyao Jiao
Executive Chairman11.33yrsCN¥1.30m0.17% CN¥16.1m
Hao Jia
Vice Chairman & GM2.17yrsCN¥4.26mno data
Jiayu Xiang
Executive Director11.33yrsCN¥1.30m0.11% CN¥10.5m
Zugang Fu
Executive Director2.17yrsCN¥1.45m0.16% CN¥15.2m
Xinying Wang
Executive Director5.17yrsno data0.11% CN¥10.5m
Bin Wang
Executive Director2.17yrsCN¥4.12mno data
Yao Liu
Independent Non-Executive Director5.83yrsCN¥158.00kno data
Qiang Liu
Chairman of the Board of Supervisors2.17yrsCN¥440.00k0.00066% CN¥63.6k
Hua Jiang
Independent Non-Executive Director5.17yrsCN¥140.00kno data
Xudong Li
Independent Non-Executive Director5.17yrsCN¥140.00kno data

5.2yrs

Average Tenure

54yo

Average Age

Experienced Board: 564's board of directors are considered experienced (5.2 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.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

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$9.634b
  • 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 internationally. It operates through Manufacture of Coal Mining Machinery and Manufacture of Auto Parts segments. The company offers powered roof support products that are used in thin seam, medium seam, thick seam, and longwall top coal caving; armored face conveyors, which are used in longwall mining operations; beam stage loaders to transfer coal cut from the longwall face; crushers to crush lump coal and oversize rocks to facilitate the conveying of belt conveyors; boot ends for longwall retreats; and complete longwall systems. It also engages in the research and development, manufacture, sale, and service of auto parts; manufacturing hydraulic products; and trading of steel and other raw materials. In addition, the company is involved in hotel management and construction activities; sale of molding and metal materials; the provision of aftermarket service of mining machinery; and research and development of mining products. The company was founded in 1958 and is headquartered in Zhengzhou, the People’s Republic of China. Zhengzhou Coal Mining Machinery Group Company Limited is a subsidiary of Henan Machinery Investment Group Co., Ltd. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/04 12:56
End of Day Share Price2020/04/03 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.