SEHK:494

Stock Analysis Report

Executive Summary

Li & Fung Limited, an investment holding company, engages in managing the supply chain for retailers and brands worldwide.

Snowflake

Fundamentals

Good value average dividend payer.

Risks

  • Li & Fung has significant price volatility in the past 3 months.

Similar Companies

Share Price & News

How has Li & Fung's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

7.4%

SEHK:494

5.4%

HK Luxury

3.3%

HK Market


1 Year Return

-65.5%

SEHK:494

-0.3%

HK Luxury

-10.5%

HK Market

494 underperformed the Luxury industry which returned 0.3% over the past year.

494 underperformed the Market in Hong Kong which returned -9.5% over the past year.


Share holder returns

494IndustryMarket
7 Day7.4%5.4%3.3%
30 Day-9.7%-0.3%-8.0%
90 Day-19.0%5.2%-5.9%
1 Year-63.9%-65.5%3.3%-0.3%-7.2%-10.5%
3 Year-66.4%-74.2%39.8%22.9%15.1%3.7%
5 Year-84.8%-89.6%30.7%4.9%9.0%-9.0%

Price Volatility Vs. Market

How volatile is Li & Fung's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Li & Fung undervalued based on future cash flows and its price relative to the stock market?

13%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

Li & Fung's share price is below the future cash flow value, but not at a moderate discount (< 20%).

Li & Fung's share price is below the future cash flow value, but not at a substantial discount (< 40%).


Price Based on Earnings

Li & Fung is good value based on earnings compared to the HK Luxury industry average.

Li & Fung is good value based on earnings compared to the Hong Kong market.


Price Based on Expected Growth

Li & Fung is good value based on expected growth next year.


Price Based on Value of Assets

Li & Fung is good value based on assets compared to the HK Luxury industry average.


Next Steps

Future Growth

How is Li & Fung expected to perform in the next 1 to 3 years based on estimates from 4 analysts?

9.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Li & Fung's revenue is expected to decrease over the next 1-3 years, this is not considered high growth.

Li & Fung's earnings are expected to grow by 9.7% yearly, however this is not considered high growth (20% yearly).

Li & Fung's revenues are expected to decrease over the next 1-3 years, this is below the Hong Kong market average.

Li & Fung's earnings growth is positive but not above the Hong Kong market average.

Li & Fung's earnings growth is expected to exceed the low risk savings rate of 2%.


Earnings per Share Growth Estimates


Future Return on Equity

Li & Fung is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


Next Steps

Past Performance

How has Li & Fung performed over the past 5 years?

-34.1%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Li & Fung's year on year earnings growth rate was negative over the past 5 years and the most recent earnings are below average.

Li & Fung's 1-year earnings growth is negative, it can't be compared to the 5-year average.

Li & Fung's 1-year earnings growth is negative, it can't be compared to the HK Luxury industry average.


Return on Equity

Li & Fung has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

Li & Fung used its assets less efficiently than the HK Luxury industry average last year based on Return on Assets.


Return on Capital Employed

Li & Fung's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is Li & Fung's financial position?


Financial Position Analysis

Li & Fung is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

Li & Fung's cash and other short term assets cover its long term commitments.


Debt to Equity History and Analysis

Li & Fung's level of debt (54.9%) compared to net worth is high (greater than 40%).

The level of debt compared to net worth has increased over the past 5 years (27.1% vs 54.9% today).

Debt is not well covered by operating cash flow (13.3%, less than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 5.6x coverage).


Balance Sheet

Low level of unsold assets.

Debt is covered by short term assets, assets are 2.7x debt.


Next Steps

Dividend

What is Li & Fung's current dividend yield, its reliability and sustainability?

8.05%

Expected Dividend Yield


Dividend Yield and Payments Analysis

Li & Fung's pays a higher dividend yield than the bottom 25% of dividend payers in Hong Kong (2.27%).

Li & Fung's dividend is above the markets top 25% of dividend payers in Hong Kong (6.19%).

Dividends per share have been volatile in the past 10 years (annual drop of over 20%).

Dividends per share have fallen over the past 10 years.


Current Payout to Shareholders

Dividends paid are covered by earnings (1.7x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be covered by earnings (1.3x coverage).


Next Steps

Management

What is the CEO of Li & Fung's salary, the management and board of directors tenure and is there insider trading?

4.1yrs

Average management tenure


CEO

Spencer Theodore Fung (46yo)

5.1yrs

Tenure

US$2,134,000

Compensation

Mr. Spencer Theodore Fung has been the Group Chief Executive Officer of Li & Fung Limited since July 7, 2014 and its Executive Director of Li since July 1, 2008. Mr. Fung joined Li & Fung in 2001. He serv ...


CEO Compensation Analysis

Spencer Theodore's remuneration is higher than average for companies of similar size in Hong Kong.

Spencer Theodore's compensation has been consistent with company performance over the past year, both up more than 20%.


Management Age and Tenure

4.1yrs

Average Tenure

54.5yo

Average Age

The tenure for the Li & Fung management team is about average.


Board Age and Tenure

6.8yrs

Average Tenure

64.5yo

Average Age

The tenure for the Li & Fung board of directors is about average.


Insider Trading

No 3 month open market individual insider trading information.


Recent Insider Transactions

SellUS$86,938,96202 Jul 19
Capital Research and Management Company
EntityCompany
Shares63,362,000
Max PriceUS$1.37
BuyUS$8,920,02014 May 19
Silchester International Investors LLP
EntityCompany
Shares7,062,000
Max PriceUS$1.26
SellUS$5,011,98514 May 19
Capital Research and Management Company
EntityCompany
Shares3,968,000
Max PriceUS$1.26
SellUS$3,898,06830 Mar 19
Capital Research and Management Company
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Shares2,698,000
Max PriceUS$1.44
SellUS$10,735,32906 Mar 19
Colonial First State Asset Management (Australia) Limited
EntityCompany
Shares7,836,000
Max PriceUS$1.37
BuyUS$7,592,79806 Mar 19
Silchester International Investors LLP
EntityCompany
Shares5,418,000
Max PriceUS$1.40
BuyUS$119,223,78114 Jan 19
Colonial First State Asset Management (Australia) Limited
EntityCompany
Shares86,394,000
Max PriceUS$1.38
BuyUS$11,073,68228 Nov 18
Silchester International Investors LLP
EntityCompany
Shares6,758,000
Max PriceUS$1.64
BuyUS$12,615,00515 Oct 18
Silchester International Investors LLP
EntityCompany
Shares7,500,000
Max PriceUS$1.68
SellUS$440,673,00624 Sep 18
Colonial First State Asset Management (Australia) Limited
EntityCompany
Shares235,654,000
Max PriceUS$1.87
SellUS$16,731,02403 Sep 18
First State Investment Management (UK) Limited
EntityCompany
Shares7,150,000
Max PriceUS$2.34
BuyUS$1,038,11928 Aug 18
First State Investment Management (UK) Limited
EntityCompany
Shares422,000
Max PriceUS$2.46

Ownership Breakdown


Management Team

  • Jason Yeung (64yo)

    Group Chief Compliance & Risk Management Officer

    • Tenure: 4.1yrs
  • Joseph Phi (57yo)

    Group President

    • Tenure: 1.6yrs
  • Edward Lam (53yo)

    Chief Financial Officer

    • Tenure: 6.8yrs
  • Spencer Theodore Fung (46yo)

    CEO & Executive Director

    • Tenure: 5.1yrs
    • Compensation: US$2.13m
  • Wilson Zhu (66yo)

    Chief Operating Officer

    • Tenure: 0.0yrs
  • Roger Young (55yo)

    Chief Human Resources Officer

    • Tenure: 2.8yrs
  • Alison Law (51yo)

    Director of Investor Relations

    • Tenure: 0.0yrs
  • Darren Palfrey (42yo)

    Chief Digital Officer

    • Tenure: 0.0yrs
  • Sean Coxall (54yo)

    President of Supply Chain Solutions

    • Tenure: 0.0yrs
  • Deepika Rana (58yo)

    President of Supply Chain Solutions

    • Tenure: 0.0yrs

Board Members

  • John Rice (62yo)

    Independent Non-Executive Director

    • Tenure: 1.6yrs
    • Compensation: US$52.00k
  • Allan Wong (68yo)

    Independent Non-Executive Director

    • Tenure: 20.4yrs
    • Compensation: US$71.00k
  • Victor Fung (73yo)

    Honorary Chairman

    • Tenure: 7.3yrs
    • Compensation: US$58.00k
  • William Fung (70yo)

    Group Chairman

    • Tenure: 7.3yrs
    • Compensation: US$1.63m
  • Martin Tang (70yo)

    Independent Non Executive Director

    • Tenure: 10.5yrs
    • Compensation: US$71.00k
  • Joseph Phi (57yo)

    Group President

    • Tenure: 1.6yrs
  • Marc Compagnon (60yo)

    Non-Executive Director

    • Tenure: 5.1yrs
    • Compensation: US$2.41m
  • Spencer Theodore Fung (46yo)

    CEO & Executive Director

    • Tenure: 5.1yrs
    • Compensation: US$2.13m
  • Margaret Leung Ko (67yo)

    Independent Non Executive Director

    • Tenure: 6.3yrs
    • Compensation: US$71.00k
  • Chih Cheung (48yo)

    Independent Non-Executive Director

    • Tenure: 2.1yrs
    • Compensation: US$52.00k

Company Information

Li & Fung Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Li & Fung Limited
  • Ticker: 494
  • Exchange: SEHK
  • Founded: 1906
  • Industry: Apparel, Accessories and Luxury Goods
  • Sector: Consumer Durables
  • Market Cap: HK$8.251b
  • Shares outstanding: 8.51b
  • Website: https://www.lifung.com

Number of Employees


Location

  • Li & Fung Limited
  • LiFung Tower
  • 11th Floor
  • Kowloon
  • Kowloon
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LFUG.FOTCPK (Pink Sheets LLC)YesCommon StockUSUSDJul 1992
LIUBDB (Deutsche Boerse AG)YesCommon StockDEEURJul 1992
494SEHK (The Stock Exchange of Hong Kong Ltd.)YesCommon StockHKHKDJul 1992
494SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesCommon StockHKHKDJul 1992
494SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesCommon StockHKHKDJul 1992
LFUG.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDOct 2008

Biography

Li & Fung Limited, an investment holding company, engages in managing the supply chain for retailers and brands worldwide. The company operates through two segments, Services and Products. Its Services seg ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/08/20 12:37
End of Day Share Price2019/08/20 00:00
Earnings2018/12/31
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.