SEHK:114

Stock Analysis Report

Executive Summary

Herald Holdings Limited, an investment holding company, manufactures, sells, and distributes toys, computer products, housewares, clocks, watches, and electronic and gift products in North America, the United Kingdom, Europe, Asia, and internationally.

Rewards

Became profitable this year

Risk Analysis

Earnings have declined by -41.93% per year over past 5 years

Dividend of 5.13% is not well covered by earnings

Large one-off items impacting financial results

Does not have a meaningful market cap (HK$429M)



Snowflake Analysis

Adequate balance sheet and overvalued.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 114 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

18.2%

114

-3.8%

HK Leisure

0.9%

HK Market


1 Year Return

6.8%

114

-21.3%

HK Leisure

-1.5%

HK Market

Return vs Industry: 114 exceeded the Hong Kong Leisure industry which returned -21.3% over the past year.

Return vs Market: 114 exceeded the Hong Kong Market which returned -1.5% over the past year.


Shareholder returns

114IndustryMarket
7 Day18.2%-3.8%0.9%
30 Day27.9%-7.5%-4.2%
90 Day6.8%-13.6%-0.2%
1 Year11.6%6.8%-18.1%-21.3%2.0%-1.5%
3 Year-19.2%-32.2%-38.2%-42.4%17.3%5.4%
5 Year10.0%-20.4%-51.5%-54.0%17.1%-2.2%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Herald Holdings undervalued compared to its fair value and its price relative to the market?

49.88x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 114 (HK$0.78) is trading above our estimate of fair value (HK$0.27)

Significantly Below Fair Value: 114 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 114 is poor value based on its PE Ratio (49.9x) compared to the Leisure industry average (7.7x).

PE vs Market: 114 is poor value based on its PE Ratio (49.9x) compared to the Hong Kong market (10.1x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 114's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 114 is good value based on its PB Ratio (0.7x) compared to the HK Leisure industry average (0.8x).


Next Steps

Future Growth

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

15.3%

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 Herald Holdings 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 Herald Holdings performed over the past 5 years?

-41.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 114 has a large one-off gain of HK$36.6M impacting its September 30 2019 financial results.

Growing Profit Margin: 114 became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: 114's earnings have declined by -41.9% per year over the past 5 years.

Accelerating Growth: 114 has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: 114 has become profitable in the last year, making it difficult to compare its past year earnings growth to the Leisure industry (-9.2%).


Return on Equity

High ROE: 114's Return on Equity (1.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Herald Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 114's short term assets (HK$636.5M) exceed its short term liabilities (HK$296.7M).

Long Term Liabilities: 114's short term assets (HK$636.5M) exceed its long term liabilities (HK$24.5M).


Debt to Equity History and Analysis

Debt Level: 114's debt to equity ratio (5.4%) is considered satisfactory.

Reducing Debt: 114's debt to equity ratio has increased from 1.2% to 5.4% over the past 5 years.

Debt Coverage: 114's debt is well covered by operating cash flow (20.2%).

Interest Coverage: Insufficient data to determine if 114's interest payments on its debt are well covered by EBIT.


Balance Sheet

Inventory Level: 114 has a high level of physical assets or inventory.

Debt Coverage by Assets: 114's debt is covered by short term assets (assets are 17.4x debt).


Next Steps

Dividend

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

5.13%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Herald Holdings before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company5.1%marketbottom25%2.2%markettop25%6.3%industryaverage5.0%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: 114's dividend (5.13%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.24%).

High Dividend: 114's dividend (5.13%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.31%).


Stability and Growth of Payments

Stable Dividend: 114's dividend payments have been volatile in the past 10 years.

Growing Dividend: 114's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (255.8%), 114's dividend payments are not 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

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

12.0yrs

Average board tenure


CEO

Kam-Hung Shum (55yo)

4.4yrs

Tenure

HK$2,769,000

Compensation

Mr. Kam Hung Shum, ACIS, CPA has been the Managing Director of Herald Holdings Limited since July 1, 2015 and served as its Secretary since July 2008 until July 1, 2015. Mr. Shum served at Herald Holdings  ...


CEO Compensation Analysis

Compensation vs Market: Kam-Hung's total compensation ($USD353.68K) is above average for companies of similar size in the Hong Kong market ($USD213.05K).

Compensation vs Earnings: Kam-Hung's compensation has been consistent with company performance over the past year.


Board Age and Tenure

12.0yrs

Average Tenure

64yo

Average Age

Experienced Board: 114's board of directors are seasoned and experienced ( 12 years average tenure).


Insider Trading

Insider Buying: 114 insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyHK$111,59914 Oct 19
Tsang-Kay Cheung
EntityIndividual
Role
Member of the Board of Directors
Executive Director
Shares180,000
Max PriceHK$0.62
BuyHK$185,99910 Oct 19
Tsang-Kay Cheung
EntityIndividual
Role
Member of the Board of Directors
Executive Director
Shares300,000
Max PriceHK$0.62
BuyHK$54,90003 Sep 19
Tsang-Kay Cheung
EntityIndividual
Role
Member of the Board of Directors
Executive Director
Shares90,000
Max PriceHK$0.61
BuyHK$86,80002 Sep 19
Tsang-Kay Cheung
EntityIndividual
Role
Member of the Board of Directors
Executive Director
Shares140,000
Max PriceHK$0.62
BuyHK$60,00023 Aug 19
Tsang-Kay Cheung
EntityIndividual
Role
Member of the Board of Directors
Executive Director
Shares100,000
Max PriceHK$0.60
BuyHK$21,00022 Aug 19
Tsang-Kay Cheung
EntityIndividual
Role
Member of the Board of Directors
Executive Director
Shares35,000
Max PriceHK$0.60
BuyHK$74,50020 Aug 19
Tsang-Kay Cheung
EntityIndividual
Role
Member of the Board of Directors
Executive Director
Shares125,000
Max PriceHK$0.60

Ownership Breakdown

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


Management Team

  • Nam-Po Kwok (68yo)

    MD of Dongguan Herald Toys Company Ltd. and Dongguan Herald Metal & Plastic Company Ltd.

    • Tenure: 0yrs
  • Robert Dorfman (64yo)

    Chairman

    • Tenure: 5.7yrs
    • Compensation: HK$4.63m
  • Gershon Dorfman (63yo)

    Managing Director of Herald Datanetics Limited

    • Tenure: 0yrs
  • Stan Cheung (75yo)

    Executive Director

    • Tenure: 27.9yrs
    • Compensation: HK$4.41m
  • Kam-Hung Shum (55yo)

    MD & Executive Director

    • Tenure: 4.4yrs
    • Compensation: HK$2.77m
  • Man-Pun Lai

    Company Secretary

    • Tenure: 2.1yrs

Board Members

  • Robert Dorfman (64yo)

    Chairman

    • Tenure: 5.7yrs
    • Compensation: HK$4.63m
  • Stan Cheung (75yo)

    Executive Director

    • Tenure: 27.9yrs
    • Compensation: HK$4.41m
  • David Ng (69yo)

    Independent Non-Executive Director

    • Tenure: 9.8yrs
    • Compensation: HK$300.00k
  • David Lie-A-Cheong (60yo)

    Independent Non-Executive Director

    • Tenure: 14.5yrs
    • Compensation: HK$300.00k
  • Kent Yeh (64yo)

    Independent Non-Executive Director

    • Tenure: 14.2yrs
    • Compensation: HK$300.00k
  • Kam-Hung Shum (55yo)

    MD & Executive Director

    • Tenure: 4.4yrs
    • Compensation: HK$2.77m

Company Information

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


Key Information

  • Name: Herald Holdings Limited
  • Ticker: 114
  • Exchange: SEHK
  • Founded: 1992
  • Industry: Leisure Products
  • Sector: Consumer Durables
  • Market Cap: HK$429.188m
  • Shares outstanding: 604.49m
  • Website: https://www.heraldgroup.com.hk

Number of Employees


Location

  • Herald Holdings Limited
  • Tower Two
  • 31st floor
  • Hong Kong
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
114SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDOct 1992
HH3BST (Boerse-Stuttgart)YesOrdinary SharesDEEUROct 1992

Biography

Herald Holdings Limited, an investment holding company, manufactures, sells, and distributes toys, computer products, housewares, clocks, watches, and electronic and gift products in North America, the Uni ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/08 12:40
End of Day Share Price2019/12/06 00:00
Earnings2019/09/30
Annual Earnings2019/03/31


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.