SEHK:3778

Stock Analysis Report

China Weaving Materials Holdings

Executive Summary

China Weaving Materials Holdings Limited, an investment holding company, engages in the manufacturing and trading of yarn products and related raw materials in the People's Republic of China.


Snowflake Analysis

Good value second-rate dividend payer.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 3778's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-5.6%

3778

-7.0%

HK Luxury

-3.3%

HK Market


1 Year Return

-6.7%

3778

0.1%

HK Luxury

-9.6%

HK Market

Return vs Industry: 3778 underperformed the Hong Kong Luxury industry which returned 1% over the past year.

Return vs Market: 3778 exceeded the Hong Kong Market which returned -9.8% over the past year.


Shareholder returns

3778IndustryMarket
7 Day-5.6%-7.0%-3.3%
30 Day1.2%-11.9%-3.8%
90 Day12.0%-12.0%-0.2%
1 Year-2.5%-6.7%3.5%0.1%-6.3%-9.6%
3 Year-21.6%-25.0%32.8%17.2%11.2%-0.05%
5 Year-40.4%-43.0%34.3%8.3%12.7%-6.0%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is China Weaving Materials Holdings undervalued compared to its fair value and its price relative to the market?

17.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 3778 (HK$0.42) is trading below our estimate of fair value (HK$0.51)

Significantly Below Fair Value: 3778 is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: 3778 is good value based on its PE Ratio (6.7x) compared to the Luxury industry average (8.3x).

PE vs Market: 3778 is good value based on its PE Ratio (6.7x) compared to the Hong Kong market (9.9x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 3778's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 3778 is good value based on its PB Ratio (0.8x) compared to the HK Luxury industry average (0.8x).


Next Steps

Future Growth

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

18.2%

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 China Weaving Materials 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 China Weaving Materials Holdings performed over the past 5 years?

62.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 3778 has high quality earnings.

Growing Profit Margin: 3778's current net profit margins (3.8%) are lower than last year (4.2%).


Past Earnings Growth Analysis

Earnings Trend: 3778's earnings have grown significantly by 62.1% per year over the past 5 years.

Accelerating Growth: 3778's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 3778 had negative earnings growth (-2.8%) over the past year, making it difficult to compare to the Luxury industry average (-1.7%).


Return on Equity

High ROE: 3778's Return on Equity (10.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is China Weaving Materials Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 3778's short term assets (CN¥551.3M) do not cover its short term liabilities (CN¥817.1M).

Long Term Liabilities: 3778's short term assets (CN¥551.3M) exceed its long term liabilities (CN¥208.4M).


Debt to Equity History and Analysis

Debt Level: 3778's debt to equity ratio (81%) is considered high.

Reducing Debt: 3778's debt to equity ratio has increased from 68.2% to 81% over the past 5 years.

Debt Coverage: 3778's debt is not well covered by operating cash flow (17.7%).

Interest Coverage: 3778's interest payments on its debt are well covered by EBIT (3.1x coverage).


Balance Sheet

Inventory Level: 3778 has a high level of physical assets or inventory.

Debt Coverage by Assets: 3778's debt is covered by short term assets (assets are 1x debt).


Next Steps

Dividend

What is China Weaving Materials Holdings's current dividend yield, its reliability and sustainability?

7.01%

Current Dividend Yield


Dividend Yield vs Market

company7.0%marketbottom25%2.3%markettop25%6.4%industryaverage2.9%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: 3778's dividend (7.01%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.32%).

High Dividend: 3778's dividend (7.01%) is in the top 25% of dividend payers in the Hong Kong market (6.41%)


Stability and Growth of Payments

Stable Dividend: 3778 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 3778's dividend payments have increased, but the company has only paid a dividend for 8 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (23.4%), 3778's dividend payments are 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

How experienced are the management team and are they aligned to shareholders interests?

5.3yrs

Average board tenure


CEO

Yongxiang Zheng (51yo)

CN¥3,068,000

Compensation

Mr. Yongxiang Zheng serves as the Chief Executive Officer of China Weaving Materials Holdings Limited. Mr. Zheng served as the General Manager of Shaoxing Gangtai Weaving Company Limited. from 2001 to 2005 ...


CEO Compensation Analysis

Compensation vs Market: Yongxiang's total compensation ($USD437.35K) is above average for companies of similar size in the Hong Kong market ($USD225.90K).

Compensation vs Earnings: Yongxiang's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Board Members

NamePositionTenureCompensationOwnership
Yongxiang Zheng
CEO & Executive Director0yrsCN¥3.07m5.4% CN¥28.8m
Hong Zheng
Non-Executive Chairman8.8yrsCN¥1.28m41.07% CN¥218.6m
Baixiang Zhang
Independent Non-Executive Director5.3yrsCN¥126.00kno data
Yiliang Xu
Independent Non-Executive Director3.3yrsCN¥126.00kno data
Guoxing Li
Independent Non-Executive Director0.2yrsno datano data

5.3yrs

Average Tenure

51yo

Average Age

Experienced Board: 3778's board of directors are considered experienced (5.3 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

China Weaving Materials Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: China Weaving Materials Holdings Limited
  • Ticker: 3778
  • Exchange: SEHK
  • Founded: 2011
  • Industry: Textiles
  • Sector: Consumer Durables
  • Market Cap: HK$532.249m
  • Shares outstanding: 1.25b
  • Website: https://www.chinaweavingmaterials.com

Number of Employees


Location

  • China Weaving Materials Holdings Limited
  • Fengtian Economic Development Zone
  • Fengxin County
  • Yichun
  • Jiangxi Province
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
3778SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDDec 2011

Biography

China Weaving Materials Holdings Limited, an investment holding company, engages in the manufacturing and trading of yarn products and related raw materials in the People's Republic of China. It operates through two segments, Yarns and Staple Fibres. The company offers cotton, polyester, polyester-cotton blended, viscose related, cotton-modal blended, and polyester-acrylonitrile blended yarns, as well as polyester staple fibers. China Weaving Materials Holdings Limited was incorporated in 2011 and is headquartered in Yichun, the People's Republic of China. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/26 13:09
End of Day Share Price2020/02/26 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.