SEHK:3989

Stock Analysis Report

Capital Environment Holdings

Executive Summary

Capital Environment Holdings Limited, an investment holding company, engages in the waste treatment and waste-to-energy businesses primarily in the People’s Republic of China and New Zealand.

Snowflake

Fundamentals

Acceptable track record with moderate growth potential.

Risks

  • Capital Environment Holdings is covered by less than 3 analysts.

Share Price & News

How has Capital Environment Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

0%

SEHK:3989

2.1%

HK Commercial Services

2.2%

HK Market


1 Year Return

-11.9%

SEHK:3989

-3.8%

HK Commercial Services

-11.1%

HK Market

3989 underperformed the Commercial Services industry which returned -3.1% over the past year.

3989 matched the Hong Kong Market (-12.3%) over the past year.


Share holder returns

3989IndustryMarket
7 Day0%2.1%2.2%
30 Day-3.4%-4.9%-7.3%
90 Day0.5%4.7%-4.8%
1 Year-11.9%-11.9%-1.6%-3.8%-7.9%-11.1%
3 Year-37.8%-37.8%-30.2%-35.1%15.5%4.1%
5 Year-65.1%-71.2%-37.9%-44.3%10.0%-8.2%

Price Volatility Vs. Market

How volatile is Capital Environment Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Capital Environment Holdings undervalued based on future cash flows and its price relative to the stock market?

14.02x

Price to Earnings (PE) ratio


Intrinsic Value Based on Future Cash Flows

Unable to calculate intrinsic value for Capital Environment Holdings to establish if it is available at moderate discount.

Unable to calculate intrinsic value for Capital Environment Holdings to establish if it is available at substantial discount.


Price Based on Earnings

Capital Environment Holdings is overvalued based on earnings compared to the HK Commercial Services industry average.

Capital Environment Holdings is overvalued based on earnings compared to the Hong Kong market.


Price Based on Expected Growth

Capital Environment Holdings is good value based on expected growth next year.


Price Based on Value of Assets

Capital Environment Holdings is good value based on assets compared to the HK Commercial Services industry average.


Next Steps

Future Growth

How is Capital Environment Holdings expected to perform in the next 1 to 3 years based on estimates from 1 analyst?

32.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Capital Environment Holdings's revenue is expected to grow by 9.9% yearly, however this is not considered high growth (20% yearly).

Capital Environment Holdings's earnings are expected to grow significantly at over 20% yearly.

Capital Environment Holdings's revenue growth is positive but not above the Hong Kong market average.

Capital Environment Holdings's earnings growth is expected to exceed the Hong Kong market average.

Capital Environment Holdings's earnings growth is expected to exceed the low risk savings rate of 2%.


Earnings per Share Growth Estimates


Future Return on Equity

Capital Environment Holdings is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


Next Steps

Past Performance

How has Capital Environment Holdings performed over the past 5 years?

52.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Capital Environment Holdings has delivered over 20% year on year earnings growth in the past 5 years.

Capital Environment Holdings's 1-year earnings growth is less than its 5-year average (23.2% vs 52.9%)

Capital Environment Holdings's earnings growth has exceeded the HK Commercial Services industry average in the past year (23.2% vs 22.7%).


Return on Equity

Capital Environment Holdings has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Capital Environment Holdings used its assets less efficiently than the HK Commercial Services industry average last year based on Return on Assets.


Return on Capital Employed

Capital Environment Holdings has improved its use of capital last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Capital Environment Holdings's financial position?


Financial Position Analysis

Capital Environment Holdings is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

Capital Environment Holdings's long term commitments exceed its cash and other short term assets.


Debt to Equity History and Analysis

Capital Environment Holdings's level of debt (164.3%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has increased over the past 5 years (160.9% vs 164.3% today).

Operating cash flow is negative therefore debt is not well covered.

Interest payments on debt are not well covered by earnings (EBIT is 2.4x annual interest expense, ideally 3x coverage).


Balance Sheet

Low level of unsold assets.

Debt is not covered by short term assets, assets are 0.5x debt.


Next Steps

Dividend

What is Capital Environment Holdings's current dividend yield, its reliability and sustainability?


Dividend Yield and Payments Analysis

Unable to evaluate Capital Environment Holdings's dividend yield against the bottom 25% of dividend payers as the company has not reported any payouts.

Unable to evaluate Capital Environment Holdings's dividend against the top 25% market benchmark as the company has not reported any payouts.

Unable to perform a dividend volatility check as Capital Environment Holdings has not reported any payouts.

Unable to verify if Capital Environment Holdings's dividend has been increasing as the company has not reported any payouts.


Current Payout to Shareholders

Unable to calculate sustainability of dividends as Capital Environment Holdings has not reported any payouts.


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 Capital Environment Holdings's salary, the management and board of directors tenure and is there insider trading?

8.1yrs

Average management tenure


CEO

Guoxian Cao (55yo)

8.1yrs

Tenure

CN¥2,181,000

Compensation

Mr. Guoxian Cao has been the Chief Executive Officer of Capital Environment Holdings Limited (formerly known as New Environmental Energy Holdings Limited) since July 4, 2011. Mr. Cao serves as Deputy Gener ...


CEO Compensation Analysis

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

Guoxian's compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

8.1yrs

Average Tenure

45.5yo

Average Age

The average tenure for the Capital Environment Holdings management team is over 5 years, this suggests they are a seasoned and experienced team.


Board Age and Tenure

7.1yrs

Average Tenure

54yo

Average Age

The tenure for the Capital Environment Holdings board of directors is about average.


Insider Trading

No 3 month open market individual insider trading information.


Ownership Breakdown


Management Team

  • Bing Wong

    Company Secretary

    • Tenure: 9.2yrs
  • Guoxian Cao (55yo)

    CEO & Executive Director

    • Tenure: 8.1yrs
    • Compensation: CN¥2.18m
  • Yanjun Liu

    Deputy General Manager

    • Tenure: 8.2yrs
  • Jinjun Xu

    Deputy General Manager

    • Tenure: 8.2yrs
  • Jinshan Gu

    Deputy General Manager

    • Tenure: 4.5yrs
  • Meng Zhang (44yo)

    Chairman

    • Tenure: 1.3yrs
  • Jialin Cheng (37yo)

    Executive Director

    • Tenure: 2.1yrs
    • Compensation: CN¥1.46m
  • Chunmei Hao (47yo)

    Executive Director

    • Tenure: 1.3yrs

Board Members

  • Eva Chan (54yo)

    Independent Non-Executive Director

    • Tenure: 7.1yrs
    • Compensation: CN¥264.00k
  • Ping-Wing Pao (72yo)

    Independent Non-Executive Director

    • Tenure: 13.2yrs
    • Compensation: CN¥264.00k
  • Allen Cheng (55yo)

    Independent Non-Executive Director

    • Tenure: 9.6yrs
    • Compensation: CN¥264.00k
  • Guoxian Cao (55yo)

    CEO & Executive Director

    • Tenure: 8.1yrs
    • Compensation: CN¥2.18m
  • Meng Zhang (44yo)

    Chairman

    • Tenure: 1.3yrs
  • Jialin Cheng (37yo)

    Executive Director

    • Tenure: 2.1yrs
    • Compensation: CN¥1.46m
  • Chunmei Hao (47yo)

    Executive Director

    • Tenure: 1.3yrs

Company Information

Capital Environment Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Capital Environment Holdings Limited
  • Ticker: 3989
  • Exchange: SEHK
  • Founded: 2004
  • Industry: Environmental and Facilities Services
  • Sector: Commercial Services
  • Market Cap: HK$2.916b
  • Shares outstanding: 14.29b
  • Website: https://www.cehl.com.hk

Number of Employees


Location

  • Capital Environment Holdings Limited
  • Bank of America Tower
  • 16th Floor
  • Central
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
3989SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJul 2006

Biography

Capital Environment Holdings Limited, an investment holding company, engages in the waste treatment and waste-to-energy businesses primarily in the People’s Republic of China and New Zealand. The company p ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/08/22 12:43
End of Day Share Price2019/08/22 00:00
Earnings2018/12/31
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.