SEHK:420

Stock Analysis Report

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Executive Summary

Fountain Set (Holdings) Limited, an investment holding company, produces and sells knitted fabrics and garments in Hong Kong, the People’s Republic of China, Taiwan, Korea, Sri Lanka, the United States, Europe, and internationally. More Details


Snowflake Analysis

Flawless balance sheet and fair value.

Share Price & News

How has Fountain Set (Holdings)'s share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 420 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.1%

420

4.0%

HK Luxury

1.5%

HK Market


1 Year Return

-28.1%

420

7.5%

HK Luxury

1.4%

HK Market

Return vs Industry: 420 underperformed the Hong Kong Luxury industry which returned 7.5% over the past year.

Return vs Market: 420 underperformed the Hong Kong Market which returned 1.4% over the past year.


Shareholder returns

420IndustryMarket
7 Day-1.1%4.0%1.5%
30 Day-1.1%4.6%-1.5%
90 Day-10.3%16.7%4.4%
1 Year-21.0%-28.1%9.6%7.5%5.4%1.4%
3 Year4.5%-20.2%41.3%28.6%-4.3%-14.6%
5 Year51.4%4.8%67.7%43.0%24.7%3.7%

Price Volatility Vs. Market

How volatile is Fountain Set (Holdings)'s share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Fountain Set (Holdings) undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 420 (HK$0.87) is trading below our estimate of fair value (HK$5.19)

Significantly Below Fair Value: 420 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 420 is poor value based on its PE Ratio (24.6x) compared to the HK Luxury industry average (11x).

PE vs Market: 420 is poor value based on its PE Ratio (24.6x) compared to the Hong Kong market (11.2x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 420's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 420 is good value based on its PB Ratio (0.3x) compared to the HK Luxury industry average (0.7x).


Next Steps

Future Growth

How is Fountain Set (Holdings) forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

37.7%

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 Fountain Set (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 Fountain Set (Holdings) performed over the past 5 years?

2.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 420 has high quality earnings.

Growing Profit Margin: 420's current net profit margins (0.8%) are lower than last year (2.5%).


Past Earnings Growth Analysis

Earnings Trend: 420's earnings have grown by 2.4% per year over the past 5 years.

Accelerating Growth: 420's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 420 had negative earnings growth (-75.9%) over the past year, making it difficult to compare to the Luxury industry average (-36.3%).


Return on Equity

High ROE: 420's Return on Equity (1.7%) is considered low.


Next Steps

Financial Health

How is Fountain Set (Holdings)'s financial position?


Financial Position Analysis

Short Term Liabilities: 420's short term assets (HK$3.3B) exceed its short term liabilities (HK$1.3B).

Long Term Liabilities: 420's short term assets (HK$3.3B) exceed its long term liabilities (HK$309.0M).


Debt to Equity History and Analysis

Debt Level: 420's debt to equity ratio (17.6%) is considered satisfactory.

Reducing Debt: 420's debt to equity ratio has reduced from 29% to 17.6% over the past 5 years.

Debt Coverage: 420's debt is well covered by operating cash flow (108.7%).

Interest Coverage: 420's interest payments on its debt are well covered by EBIT (6.4x coverage).


Balance Sheet


Next Steps

Dividend

What is Fountain Set (Holdings) current dividend yield, its reliability and sustainability?

12.00%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 420's dividend (12%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.26%).

High Dividend: 420's dividend (12%) is in the top 25% of dividend payers in the Hong Kong market (6.91%)


Stability and Growth of Payments

Stable Dividend: 420's dividend payments have been volatile in the past 10 years.

Growing Dividend: 420's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (262.7%), 420'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

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

2.1yrs

Average management tenure


CEO

Yao Zhao (57 yo)

5.67yrs

Tenure

HK$4,847,000

Compensation

Mr. Yao Zhao serves as an Assistant President and the General Manager of Asset Management Department of Chinatex Corporation. Mr. Zhao serves as a General Manager of Chinatex Xinyuan Assets Management Co., ...


CEO Compensation Analysis

Compensation vs Market: Yao's total compensation ($USD625.41K) is above average for companies of similar size in the Hong Kong market ($USD230.01K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Yao Zhao
Chairman & CEO5.67yrsHK$4.85mno data
Yongming Tao
Executive Director2.08yrsno datano data
Xianfu Liu
Executive Director2.08yrsno datano data
Hang Tat Yau
Executive Director2.08yrsHK$2.56m0.22%
HK$ 2.4m
Chung Fong Ha
Founder & Honorary Chairman8.25yrsHK$15.68m8%
HK$ 85.3m
Wai Han Cheng
Company Secretary & Deputy GM of Corporate Governance Department4.83yrsno datano data

2.1yrs

Average Tenure

54yo

Average Age

Experienced Management: 420's management team is considered experienced (2.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Yao Zhao
Chairman & CEO5.67yrsHK$4.85mno data
Yongming Tao
Executive Director2.08yrsno datano data
Xianfu Liu
Executive Director2.08yrsno datano data
Hang Tat Yau
Executive Director2.08yrsHK$2.56m0.22%
HK$ 2.4m
Chung Fong Ha
Founder & Honorary Chairman8.25yrsHK$15.68m8%
HK$ 85.3m
Gordon Yen
Non-Executive Vice Chairman2.08yrsHK$200.00k0.68%
HK$ 7.3m
Kwok Tung Ng
Independent Non-Executive Director27.67yrsHK$250.00kno data
Wei Ying
Independent Non-Executive Director5.67yrsHK$200.00kno data
William Lam
Independent Non-Executive Director4.33yrsHK$200.00kno data
Fuji Sun
Non-Executive Director2.08yrsno datano data

3.2yrs

Average Tenure

55yo

Average Age

Experienced Board: 420's board of directors are considered experienced (3.2 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

Fountain Set (Holdings) Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Fountain Set (Holdings) Limited
  • Ticker: 420
  • Exchange: SEHK
  • Founded: 1969
  • Industry: Textiles
  • Sector: Consumer Durables
  • Market Cap: HK$1.066b
  • Shares outstanding: 1.23b
  • Website: https://www.fshl.com

Number of Employees


Location

  • Fountain Set (Holdings) Limited
  • Eastern Sea Industrial Building
  • Block A
  • Kwai Chung
  • New Territories
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
420SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJan 1992
FOVDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992

Biography

Fountain Set (Holdings) Limited, an investment holding company, produces and sells knitted fabrics and garments in Hong Kong, the People’s Republic of China, Taiwan, Korea, Sri Lanka, the United States, Eu ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/09/20 19:19
End of Day Share Price2020/09/18 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


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.