SEHK:1058

Stock Analysis Report

Executive Summary

Guangdong Tannery Limited, an investment holding company, processes and sells semi-finished and finished leather in Mainland China.


Snowflake Analysis

Adequate balance sheet with weak fundamentals.

Share Price & News

How has Guangdong Tannery's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 1058 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

6.7%

1058

-3.8%

HK Luxury

-4.1%

HK Market


1 Year Return

-16.7%

1058

21.1%

HK Luxury

-0.5%

HK Market

Return vs Industry: 1058 underperformed the Hong Kong Luxury industry which returned 28% over the past year.

Return vs Market: 1058 underperformed the Hong Kong Market which returned 6.4% over the past year.


Shareholder returns

1058IndustryMarket
7 Day6.7%-3.8%-4.1%
30 Day0%-0.9%0.05%
90 Day-3.6%3.1%4.3%
1 Year-16.7%-16.7%25.3%21.1%3.2%-0.5%
3 Year-50.6%-50.6%46.8%29.8%20.4%8.2%
5 Year-32.2%-32.2%57.7%26.8%19.0%-0.9%

Price Volatility Vs. Market

How volatile is Guangdong Tannery's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Guangdong Tannery undervalued compared to its fair value and its price relative to the market?

5.98x

Price to Book (PB) ratio


Share Price vs. Fair Value

Below Fair Value: 1058 (HK$0.38) is trading above our estimate of fair value (HK$0.3)

Significantly Below Fair Value: 1058 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 1058 is unprofitable, so we can't compare its PE Ratio to the Luxury industry average.

PE vs Market: 1058 is unprofitable, so we can't compare its PE Ratio to the Hong Kong market.


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 1058's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 1058 is overvalued based on its PB Ratio (5.7x) compared to the HK Luxury industry average (0.9x).


Next Steps

Future Growth

How is Guangdong Tannery forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

18.3%

Forecasted Consumer Durables 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 Guangdong Tannery 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 Guangdong Tannery performed over the past 5 years?

-40.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1058 is currently unprofitable.

Growing Profit Margin: 1058 is currently unprofitable.


Past Earnings Growth Analysis

Earnings Trend: 1058 is unprofitable, and losses have increased over the past 5 years at a rate of -40.3% per year.

Accelerating Growth: Unable to compare 1058's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: 1058 is unprofitable, making it difficult to compare its past year earnings growth to the Luxury industry (-2.8%).


Return on Equity

High ROE: 1058 has a negative Return on Equity (-153.82%), as it is currently unprofitable.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Guangdong Tannery's financial position?


Financial Position Analysis

Short Term Liabilities: 1058's short term assets (HK$193.7M) exceed its short term liabilities (HK$55.2M).

Long Term Liabilities: 1058's short term assets (HK$193.7M) exceed its long term liabilities (HK$159.6M).


Debt to Equity History and Analysis

Debt Level: 1058's debt to equity ratio (395.8%) is considered high.

Reducing Debt: 1058's debt to equity ratio has increased from 72% to 395.8% over the past 5 years.


Balance Sheet

Inventory Level: 1058 has a high level of physical assets or inventory.

Debt Coverage by Assets: 1058's debt is covered by short term assets (assets are 1.4x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable 1058 has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: 1058 is unprofitable but has sufficient cash runway for more than 3 years, due to free cash flow being positive and growing by 29.6% per year.


Next Steps

Dividend

What is Guangdong Tannery's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%2.2%markettop25%6.2%industryaverage2.6%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate 1058's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate 1058's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if 1058's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if 1058's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 1058's dividend in 3 years as they are not forecast to pay a notable one for the Hong Kong market.


Next Steps

Management

What is the CEO of Guangdong Tannery's salary, the management and board of directors tenure and is there insider trading?

5.3yrs

Average management tenure


CEO

Jun Sun (45yo)

9.9yrs

Tenure

HK$819,000

Compensation

Mr. Jung Sun, also known as Jun has been the Managing Director of Guangdong Tannery Ltd. since February 5, 2010. Mr. Sun serves as an Executive of Deutsche Bank Alex. Brown Inc. He also serves as Director  ...


CEO Compensation Analysis

Compensation vs Market: Jun's total compensation ($USD105.33K) is below average for companies of similar size in the Hong Kong market ($USD228.16K).

Compensation vs Earnings: Jun's compensation has increased whilst the company is unprofitable.


Management Age and Tenure

5.3yrs

Average Tenure

44.5yo

Average Age

Experienced Management: 1058's management team is seasoned and experienced (5.3 years average tenure).


Board Age and Tenure

9.9yrs

Average Tenure

54yo

Average Age

Experienced Board: 1058's board of directors are considered experienced (9.9 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.


Ownership Breakdown

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


Management Team

  • Jun Sun (45yo)

    MD & Executive Director

    • Tenure: 9.9yrs
    • Compensation: HK$819.00k
  • Miu Chan (54yo)

    Company Secretary

    • Tenure: 0.7yrs
  • Wai Mei Lee (44yo)

    Chief Financial Officer

    • Tenure: 14.7yrs
  • Hu Kuang (41yo)

    Chairman

    • Tenure: 0.3yrs

Board Members

  • Jun Sun (45yo)

    MD & Executive Director

    • Tenure: 9.9yrs
    • Compensation: HK$819.00k
  • Lak Fung (71yo)

    Independent Non-Executive Director

    • Tenure: 17.2yrs
    • Compensation: HK$150.00k
  • Thomas Choi (74yo)

    Independent Non-Executive Director

    • Tenure: 15.3yrs
    • Compensation: HK$150.00k
  • Roger Chan (69yo)

    Independent Non-Executive Director

    • Tenure: 13.8yrs
    • Compensation: HK$150.00k
  • Jiankang Qiao (54yo)

    Non-Executive Director

    • Tenure: 0.08yrs
  • Hu Kuang (41yo)

    Chairman

    • Tenure: 0.3yrs
  • Yatao Ding (36yo)

    Non-Executive Director

    • Tenure: 1.8yrs

Company Information

Guangdong Tannery Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Guangdong Tannery Limited
  • Ticker: 1058
  • Exchange: SEHK
  • Founded: 1995
  • Industry: Apparel, Accessories and Luxury Goods
  • Sector: Consumer Durables
  • Market Cap: HK$215.208m
  • Shares outstanding: 538.02m
  • Website: https://www.gdtann.com.hk

Number of Employees


Location

  • Guangdong Tannery Limited
  • Guangdong Investment Tower
  • 29th Floor
  • Central
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1058SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDDec 1996

Biography

Guangdong Tannery Limited, an investment holding company, processes and sells semi-finished and finished leather in Mainland China. The company is also involved in leasing plant and machinery; processing cowhides; and trading leather. It serves leather product manufacturers primarily branded shoes manufacturers. The company was founded in 1995 and is based in Central, Hong Kong. Guangdong Tannery Limited is a subsidiary of GDH Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/01/26 12:42
End of Day Share Price2020/01/24 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.