SEHK:1999

Stock Analysis Report

Executive Summary

Man Wah Holdings Limited, an investment holding company, manufactures and distributes sofas and ancillary products.

Rewards

Trading at 49.1% below its fair value

Earnings are forecast to grow 15.65% per year

Risk Analysis

High level of non-cash earnings

Has a high level of debt

Highly volatile share price over past 3 months



Snowflake Analysis

Reasonable growth potential with adequate balance sheet.


Similar Companies

La-Z-Boy

NYSE:LZB

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 1999's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

8.7%

1999

2.6%

HK Consumer Durables

1.6%

HK Market


1 Year Return

77.4%

1999

19.7%

HK Consumer Durables

6.0%

HK Market

Return vs Industry: 1999 exceeded the Hong Kong Consumer Durables industry which returned 21.3% over the past year.

Return vs Market: 1999 exceeded the Hong Kong Market which returned 6.4% over the past year.


Shareholder returns

1999IndustryMarket
7 Day8.7%2.6%1.6%
30 Day21.2%5.5%4.4%
90 Day31.9%14.3%8.6%
1 Year82.7%77.4%22.1%19.7%9.9%6.0%
3 Year41.1%26.8%26.3%18.4%27.7%14.7%
5 Year147.0%107.3%31.3%17.0%21.7%1.4%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

47.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 1999 (HK$6.36) is trading below our estimate of fair value (HK$12.49)

Significantly Below Fair Value: 1999 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 1999 is poor value based on its PE Ratio (17.3x) compared to the Consumer Durables industry average (13x).

PE vs Market: 1999 is poor value based on its PE Ratio (17.3x) compared to the Hong Kong market (10.5x).


Price to Earnings Growth Ratio

PEG Ratio: 1999 is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: 1999 is overvalued based on its PB Ratio (3.9x) compared to the HK Consumer Durables industry average (0.7x).


Next Steps

Future Growth

How is Man Wah Holdings forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

15.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1999's forecast earnings growth (15.7% per year) is above the savings rate (1.6%).

Earnings vs Market: 1999's earnings (15.7% per year) are forecast to grow faster than the Hong Kong market (11.3% per year).

High Growth Earnings: 1999's earnings are forecast to grow, but not significantly.

Revenue vs Market: 1999's revenue (11% per year) is forecast to grow faster than the Hong Kong market (10.2% per year).

High Growth Revenue: 1999's revenue (11% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 1999's Return on Equity is forecast to be high in 3 years time (23%)


Next Steps

Past Performance

How has Man Wah Holdings performed over the past 5 years?

5.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1999 has a high level of non-cash earnings.

Growing Profit Margin: 1999's current net profit margins (12.4%) are lower than last year (12.9%).


Past Earnings Growth Analysis

Earnings Trend: 1999's earnings have grown by 5.7% per year over the past 5 years.

Accelerating Growth: 1999's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 1999 had negative earnings growth (-0.3%) over the past year, making it difficult to compare to the Consumer Durables industry average (-4.3%).


Return on Equity

High ROE: 1999's Return on Equity (21.8%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Man Wah Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 1999's short term assets (HK$5.4B) exceed its short term liabilities (HK$5.2B).

Long Term Liabilities: 1999's short term assets (HK$5.4B) exceed its long term liabilities (HK$1.1B).


Debt to Equity History and Analysis

Debt Level: 1999's debt to equity ratio (60.9%) is considered high.

Reducing Debt: 1999's debt to equity ratio has increased from 19.5% to 60.9% over the past 5 years.

Debt Coverage: 1999's debt is well covered by operating cash flow (45.3%).

Interest Coverage: 1999's interest payments on its debt are well covered by EBIT (20.1x coverage).


Balance Sheet

Inventory Level: 1999 has a high level of physical assets or inventory.

Debt Coverage by Assets: 1999's debt is covered by short term assets (assets are 1.3x debt).


Next Steps

Dividend

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

1.84%

Current Dividend Yield


Dividend Yield vs Market

company1.8%marketbottom25%2.2%markettop25%6.0%industryaverage2.3%forecastin3Years3.0%

Current dividend yield vs market & industry

Notable Dividend: 1999's dividend (1.89%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.17%).

High Dividend: 1999's dividend (1.89%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.02%).


Stability and Growth of Payments

Stable Dividend: 1999's dividend payments have been volatile in the past 10 years.

Growing Dividend: 1999's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (35.4%), 1999's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 1999's dividends in 3 years are forecast to be well covered by earnings (43.1% payout ratio).


Next Steps

Management

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

8.3yrs

Average board tenure


CEO

Man Li Wong (54yo)

15.2yrs

Tenure

HK$2,048,000

Compensation

Mr. Wong Man Li, BBS, founded Man Wah Holdings Ltd. in 1992 and has been its Chairman of the Board and Managing Director since November 17, 2004. Mr. Wong is responsible for the day-today overall managemen ...


CEO Compensation Analysis

Compensation vs Market: Man Li's total compensation ($USD263.40K) is below average for companies of similar size in the Hong Kong market ($USD567.26K).

Compensation vs Earnings: Man Li's compensation has been consistent with company performance over the past year.


Board Age and Tenure

8.3yrs

Average Tenure

49.5yo

Average Age

Experienced Board: 1999's board of directors are considered experienced (7.9 years average tenure).


Insider Trading

Insider Buying: 1999 insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellHK$4,235,00717 Dec 19
Quanfa Dai
EntityIndividual
Role
Member of the Board of Directors
Senior Director of the Manufacturing Center & Executive Director
Shares745,600
Max PriceHK$5.68
SellHK$41,166,08616 Apr 19
Orient Securities Asset Management Co., Ltd
EntityCompany
Shares8,872,000
Max PriceHK$4.64
SellHK$26,928,27227 Mar 19
Orient Securities Asset Management Co., Ltd
EntityCompany
Shares6,426,800
Max PriceHK$4.19
SellHK$11,505,59418 Mar 19
Orient Securities Asset Management Co., Ltd
EntityCompany
Shares2,556,800
Max PriceHK$4.50
BuyHK$5,313,79031 Jan 19
Orient Securities Asset Management Co., Ltd
EntityCompany
Shares1,420,800
Max PriceHK$3.74
SellHK$7,385,95528 Jan 19
Orient Securities Asset Management Co., Ltd
EntityCompany
Shares1,948,800
Max PriceHK$3.79

Ownership Breakdown

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


Management Team

  • Man Li Wong (54yo)

    Chairman & MD

    • Tenure: 15.2yrs
    • Compensation: HK$2.05m
  • Wai Hing Hui (56yo)

    VP of General Administration & Retail Sales and Executive Director

    • Tenure: 15.2yrs
    • Compensation: HK$1.64m
  • Alan Marnie (48yo)

    Executive Director

    • Tenure: 8.3yrs
    • Compensation: HK$5.51m
  • Quanfa Dai (46yo)

    Senior Director of the Manufacturing Center & Executive Director

    • Tenure: 7.5yrs
    • Compensation: HK$2.10m
  • Kevin Castellani

    Director of Corporate Communications

    • Tenure: 2.5yrs
  • Ying Ying Wong (32yo)

    Chief Brand Officer

    • Tenure: 4.9yrs
    • Compensation: HK$1.06m
  • Huiyan Yang (39yo)

    CFO & Executive Director

    • Ying Fu

      Company Secretary & Regional Financial Controller


      Board Members

      • Alan Ong (49yo)

        Independent Non-Executive Director

        • Tenure: 9.8yrs
        • Compensation: HK$380.00k
      • Tony Kan (68yo)

        Independent Non-Executive Director

        • Tenure: 6.7yrs
        • Compensation: HK$380.00k
      • Man Li Wong (54yo)

        Chairman & MD

        • Tenure: 15.2yrs
        • Compensation: HK$2.05m
      • Wai Hing Hui (56yo)

        VP of General Administration & Retail Sales and Executive Director

        • Tenure: 15.2yrs
        • Compensation: HK$1.64m
      • David Chau (55yo)

        Independent Non Executive Director

        • Tenure: 9.8yrs
        • Compensation: HK$380.00k
      • Alan Marnie (48yo)

        Executive Director

        • Tenure: 8.3yrs
        • Compensation: HK$5.51m
      • Yuan Ding (50yo)

        Independent Non-Executive Director

        • Tenure: 3.1yrs
        • Compensation: HK$380.00k
      • Quanfa Dai (46yo)

        Senior Director of the Manufacturing Center & Executive Director

        • Tenure: 7.5yrs
        • Compensation: HK$2.10m
      • Ying Ying Wong (32yo)

        Chief Brand Officer

        • Tenure: 4.9yrs
        • Compensation: HK$1.06m
      • Huiyan Yang (39yo)

        CFO & Executive Director

        Company Information

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


        Key Information

        • Name: Man Wah Holdings Limited
        • Ticker: 1999
        • Exchange: SEHK
        • Founded: 1992
        • Industry: Home Furnishings
        • Sector: Consumer Durables
        • Market Cap: HK$24.599b
        • Shares outstanding: 3.77b
        • Website: https://www.manwahholdings.com

        Number of Employees


        Location

        • Man Wah Holdings Limited
        • Wah Lai Industrial Center
        • 1st Floor
        • Fotan
        • New Territories
        • Hong Kong

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        1999SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDApr 2010
        AAMDB (Deutsche Boerse AG)YesOrdinary SharesDEEURApr 2010
        MAWH.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDApr 2010
        1999SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDApr 2010
        1999SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDApr 2010
        MAWH.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDJul 2010

        Biography

        Man Wah Holdings Limited, an investment holding company, manufactures and distributes sofas and ancillary products. The company operates through Sofa and Ancillary Products, Other Products, and Home Group Business segments. It offers sofas under the CHEERS brand; mattresses under the Enlanda brand; panel furniture and furniture accessories; sofas, sofa-beds, beds, armchairs, and accessories under the Fleming brand name; and chairs, smart furniture spare parts, etc. The company is also involved in the production and sale of chairs and other products to high-speed railways, chain cinemas, and other business customers, as well as metal components for furniture; advertising and marketing of home furnishing products; manufacturing and trading of foam products; property investment business; operation, leasing, and management of furniture malls; trading of sofas, bedding products, other furniture, and furniture components, as well as foam products; and research and production of smart drive machines and electric regulators. In addition, it offers property management services; offshore sales, management business consultancy, and back office support services; business management and design services; warehouse services; and brand management, and import and export services. As of March 31, 2019, the company had a total of 2,614 CHEERS First-class Cabin brand sofa and CHEERS Five-star Mattress brand stores, as well as Fleming stores in China. It has operations in the People's Republic of China, North America, Europe, Australia, the United Arab Emirates, Israel, and Indonesia. The company was founded in 1992 and is headquartered in Fotan, Hong Kong. Man Wah Holdings Limited is a subsidiary of Man Wah Investments Limited. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/19 12:53
        End of Day Share Price2020/01/17 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.