SEHK:1272

Stock Analysis Report

Datang Environment Industry Group

Executive Summary

Datang Environment Industry Group Co., Ltd.

Rewards

Trading at 38.8% below its fair value

Risk Analysis

Earnings have declined by -2.81% per year over past 5 years

Debt is not well covered by operating cash flow

Unstable dividend track record

Profit margins (6.3%) are lower than last year (10.2%)



Snowflake Analysis

Undervalued with adequate balance sheet.


Similar Companies

Share Price & News

How has Datang Environment Industry Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 1272 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

1272

-0.4%

HK Commercial Services

-1.4%

HK Market


1 Year Return

-28.6%

1272

41.2%

HK Commercial Services

3.5%

HK Market

Return vs Industry: 1272 underperformed the Hong Kong Commercial Services industry which returned 38.9% over the past year.

Return vs Market: 1272 underperformed the Hong Kong Market which returned 6.4% over the past year.


Shareholder returns

1272IndustryMarket
7 Day0%-0.4%-1.4%
30 Day11.1%8.6%1.8%
90 Day-10.7%12.5%6.0%
1 Year-23.4%-28.6%44.6%41.2%7.3%3.5%
3 Year-45.2%-53.8%-28.9%-34.1%23.3%10.8%
5 Yearn/a-43.1%-49.2%19.2%-0.7%

Price Volatility Vs. Market

How volatile is Datang Environment Industry Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Datang Environment Industry Group undervalued compared to its fair value and its price relative to the market?

37.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 1272 (HK$1.5) is trading below our estimate of fair value (HK$2.45)

Significantly Below Fair Value: 1272 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 1272 is good value based on its PE Ratio (9x) compared to the Commercial Services industry average (12.2x).

PE vs Market: 1272 is good value based on its PE Ratio (9x) compared to the Hong Kong market (10.5x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 1272's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 1272 is good value based on its PB Ratio (0.6x) compared to the HK Commercial Services industry average (1.2x).


Next Steps

Future Growth

How is Datang Environment Industry Group forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

26.8%

Forecasted Commercial Services industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Datang Environment Industry Group has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Datang Environment Industry Group performed over the past 5 years?

-2.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1272 has high quality earnings.

Growing Profit Margin: 1272's current net profit margins (6.3%) are lower than last year (10.2%).


Past Earnings Growth Analysis

Earnings Trend: 1272's earnings have declined by -2.8% per year over the past 5 years.

Accelerating Growth: 1272's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 1272 had negative earnings growth (-46.8%) over the past year, making it difficult to compare to the Commercial Services industry average (9.3%).


Return on Equity

High ROE: 1272's Return on Equity (6.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Datang Environment Industry Group's financial position?


Financial Position Analysis

Short Term Liabilities: 1272's short term assets (CN¥12.2B) exceed its short term liabilities (CN¥10.4B).

Long Term Liabilities: 1272's short term assets (CN¥12.2B) exceed its long term liabilities (CN¥2.8B).


Debt to Equity History and Analysis

Debt Level: 1272's debt to equity ratio (78.3%) is considered high.

Reducing Debt: 1272's debt to equity ratio has reduced from 228.7% to 78.3% over the past 5 years.

Debt Coverage: 1272's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: 1272's interest payments on its debt are well covered by EBIT (3.6x coverage).


Balance Sheet

Inventory Level: 1272 has a high level of physical assets or inventory.

Debt Coverage by Assets: 1272's debt is covered by short term assets (assets are 2.2x debt).


Next Steps

Dividend

What is Datang Environment Industry Group's current dividend yield, its reliability and sustainability?

8.25%

Current Dividend Yield


Dividend Yield vs Market

company8.3%marketbottom25%2.2%markettop25%6.1%industryaverage1.6%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: 1272's dividend (8.28%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.17%).

High Dividend: 1272's dividend (8.28%) is in the top 25% of dividend payers in the Hong Kong market (6.02%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, 1272 has been paying a dividend for less than 10 years.

Growing Dividend: 1272 has only been paying a dividend for 3 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (74.1%), 1272's dividend payments are 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

What is the CEO of Datang Environment Industry Group's salary, the management and board of directors tenure and is there insider trading?

1.4yrs

Average management tenure


CEO

Guoli Hou (56yo)

0.8yrs

Tenure

0

Mr. Guoli Hou has been Executive Director of Datang Environment Industry Group Co., Ltd. since October 31, 2019. Mr. Hou serves as General Manager of Datang Environment Industry Group Co., Ltd. since March ...


Management Age and Tenure

1.4yrs

Average Tenure

47yo

Average Age

Experienced Management: 1272's management team is not considered experienced ( 1.4 years average tenure), which suggests a new team.


Board Age and Tenure

1.2yrs

Average Tenure

55yo

Average Age

Experienced Board: 1272's board of directors are not considered experienced ( 1.2 years average tenure), which suggests a new board.


Insider Trading

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.


Management Team

  • Song Chen (51yo)

    Chief Accountant

    • Tenure: 0.5yrs
  • Zhen Shen (47yo)

    Non-Executive Director

    • Tenure: 1.2yrs
    • Compensation: CN¥37.00k
  • Hui Mao (44yo)

    Deputy General Manager

    • Tenure: 2.8yrs
  • Xiuguang Liang (40yo)

    Deputy General Manager

    • Tenure: 1.8yrs
  • Mei Zhu (52yo)

    Deputy GM

    • Tenure: 1.5yrs
  • Weihua Liu (58yo)

    Deputy General Manager

    • Tenure: 1.4yrs
  • Haitao Ren (46yo)

    Deputy General Manager

    • Tenure: 1.4yrs
  • Changqing Wang (47yo)

    Deputy General Manager

    • Tenure: 1.4yrs
  • Guoli Hou (56yo)

    Executive Director & General Manager

    • Tenure: 0.8yrs
  • Haijie Wang

    Deputy General Manager

    • Tenure: 0.8yrs

Board Members

  • Xiang Ye (55yo)

    Independent Non-Executive Director

    • Tenure: 4.6yrs
    • Compensation: CN¥100.00k
  • Yaohua Jin (59yo)

    Chairman

    • Zhuanjian Mao (66yo)

      Independent Non-Executive Director

      • Tenure: 4.6yrs
      • Compensation: CN¥100.00k
    • Jiaxiang Gao (45yo)

      Independent Non-Executive Director

      • Tenure: 3.8yrs
      • Compensation: CN¥100.00k
    • Zhenyu Li (44yo)

      Non-Executive Director

      • Tenure: 0.3yrs
    • Zhen Shen (47yo)

      Non-Executive Director

      • Tenure: 1.2yrs
      • Compensation: CN¥37.00k
    • Li Chen (52yo)

      Employee Representative Supervisor

      • Tenure: 2yrs
    • Quancheng Liu (56yo)

      Non-Executive Director

      • Tenure: 0.3yrs
    • Guoli Hou (56yo)

      Executive Director & General Manager

      • Tenure: 0.8yrs
    • Ruixiang Liu (55yo)

      Non-Executive Director

      • Tenure: 0.3yrs

    Company Information

    Datang Environment Industry Group Co., Ltd.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Datang Environment Industry Group Co., Ltd.
    • Ticker: 1272
    • Exchange: SEHK
    • Founded: 1984
    • Industry: Environmental and Facilities Services
    • Sector: Commercial Services
    • Market Cap: HK$4.451b
    • Shares outstanding: 2.97b
    • Website: https://www.dteg.com.cn

    Number of Employees


    Location

    • Datang Environment Industry Group Co., Ltd.
    • No. 120 Zizhuyuan Road
    • Haidian District
    • Beijing
    • China

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    1272SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares Foreign ListedHKHKDNov 2016

    Biography

    Datang Environment Industry Group Co., Ltd. provides environmental protection and energy conservation solutions to coal-fired power generation enterprises in the People's Republic of China. The company operates through Environmental Protection and Energy Conservation Solutions; Renewable Energy Engineering; Thermal Power Engineering; and Other Businesses segments. The Environmental Protection and Energy Conservation Solutions segment engages in the flue gas desulfurization and denitrification facilities concession operation business for coal-fired power plants; the manufacture and sale of denitrification catalysts; engineering business for coal-fired power plants, including the engineering of denitrification, desulfurization, dust removal, ash and slag handling, other environmental protection facilities, and industrial site dust management related engineering; water treatment business; and energy conservation business, such as energy conservation engineering and energy management contract. The Renewable Energy Engineering segment provides engineering general contracting services for newly-built wind power plants, biomass power plants, and photovoltaic power plants. The Thermal Power Engineering segment offers engineering, procurement, and construction services for thermal power plants. The Other Businesses engages in the fiberglass chimney anti-corrosion, air cooling system engineering general contracting, and coal yard monitoring system upgrade. The company was founded in 1984 and is headquartered in Beijing, the People's Republic of China. Datang Environment Industry Group Co., Ltd. is a subsidiary of China Datang Corporation Ltd. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/23 13:04
    End of Day Share Price2020/01/22 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.