SEHK:551

Stock Analysis Report

Yue Yuen Industrial (Holdings)

Executive Summary

Yue Yuen Industrial (Holdings) Limited, an investment holding company, engages in manufacturing, marketing, and retailing athletic footwear, athletic style leisure footwear, and casual and outdoor footwear in the People’s Republic of China, the United States, Europe, and internationally.

Rewards

Trading at 53% below its fair value

Earnings are forecast to grow 8.83% per year

Earnings grew by 1.2% over the past year

Pays a high and reliable dividend of 12.62%

Risk Analysis

Has a high level of debt

Dividend of 12.62% is not well covered by earnings

Highly volatile share price over past 3 months



Snowflake Analysis

Undervalued established dividend payer.


Similar Companies

Share Price & News

How has Yue Yuen Industrial (Holdings)'s share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 551's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

17.4%

551

12.5%

HK Luxury

7.4%

HK Market


1 Year Return

-56.4%

551

-21.7%

HK Luxury

-22.7%

HK Market

Return vs Industry: 551 underperformed the Hong Kong Luxury industry which returned -19.4% over the past year.

Return vs Market: 551 underperformed the Hong Kong Market which returned -20.3% over the past year.


Shareholder returns

551IndustryMarket
7 Day17.4%12.5%7.4%
30 Day-37.5%-13.3%-11.2%
90 Day-49.0%-25.7%-17.3%
1 Year-53.3%-56.4%-19.5%-21.7%-19.9%-22.7%
3 Year-49.2%-61.8%10.1%-2.9%-5.3%-14.8%
5 Year-37.7%-57.0%10.9%-6.7%-8.7%-23.4%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Yue Yuen Industrial (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: 551 (HK$11.74) is trading below our estimate of fair value (HK$25)

Significantly Below Fair Value: 551 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 551 is poor value based on its PE Ratio (7.3x) compared to the Luxury industry average (7.3x).

PE vs Market: 551 is good value based on its PE Ratio (7.3x) compared to the Hong Kong market (9x).


Price to Earnings Growth Ratio

PEG Ratio: 551 is good value based on its PEG Ratio (0.8x)


Price to Book Ratio

PB vs Industry: 551 is good value based on its PB Ratio (0.6x) compared to the HK Luxury industry average (0.7x).


Next Steps

Future Growth

How is Yue Yuen Industrial (Holdings) forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

8.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 551's forecast earnings growth (8.8% per year) is above the savings rate (1.6%).

Earnings vs Market: 551's earnings (8.8% per year) are forecast to grow slower than the Hong Kong market (12.8% per year).

High Growth Earnings: 551's earnings are forecast to grow, but not significantly.

Revenue vs Market: 551's revenue (6.8% per year) is forecast to grow slower than the Hong Kong market (9.9% per year).

High Growth Revenue: 551's revenue (6.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 551's Return on Equity is forecast to be low in 3 years time (9.6%).


Next Steps

Past Performance

How has Yue Yuen Industrial (Holdings) performed over the past 5 years?

-1.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 551 has high quality earnings.

Growing Profit Margin: 551's current net profit margins (3.3%) are lower than last year (3.4%).


Past Earnings Growth Analysis

Earnings Trend: 551's earnings have declined by -1.1% per year over the past 5 years.

Accelerating Growth: 551's earnings growth over the past year (1.2%) exceeds its 5-year average (-1.1% per year).

Earnings vs Industry: 551 earnings growth over the past year (1.2%) exceeded the Luxury industry -0.2%.


Return on Equity

High ROE: 551's Return on Equity (8.5%) is considered low.


Next Steps

Financial Health

How is Yue Yuen Industrial (Holdings)'s financial position?


Financial Position Analysis

Short Term Liabilities: 551's short term assets ($4.1B) exceed its short term liabilities ($2.2B).

Long Term Liabilities: 551's short term assets ($4.1B) exceed its long term liabilities ($1.6B).


Debt to Equity History and Analysis

Debt Level: 551's debt to equity ratio (45.4%) is considered high.

Reducing Debt: 551's debt to equity ratio has increased from 18.9% to 45.4% over the past 5 years.

Debt Coverage: 551's debt is well covered by operating cash flow (28.6%).

Interest Coverage: 551's interest payments on its debt are well covered by EBIT (4.2x coverage).


Balance Sheet

Inventory Level: 551 has a high level of physical assets or inventory.

Debt Coverage by Assets: 551's debt is covered by short term assets (assets are 2x debt).


Next Steps

Dividend

What is Yue Yuen Industrial (Holdings)'s current dividend yield, its reliability and sustainability?

12.62%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 551's dividend (12.62%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.67%).

High Dividend: 551's dividend (12.62%) is in the top 25% of dividend payers in the Hong Kong market (7.29%)


Stability and Growth of Payments

Stable Dividend: 551's dividends per share have been stable in the past 10 years.

Growing Dividend: 551's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (92.9%), 551's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 551's dividends in 3 years are forecast to be covered by earnings (71% payout ratio).


Next Steps

Management

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

5.5yrs

Average board tenure


CEO

Patty Tsai (39yo)

6.75s

Tenure

US$347,000

Compensation

Ms. Pei-Chun Tsai, also known as Patty, serves as Chief Executive Officer of Pou Chen Group at Pou Chen Corporation. Ms. Tsai has been Managing Director of Yue Yuen Industrial (Holdings) Limited since June ...


CEO Compensation Analysis

Compensation vs Market: Patty's total compensation ($USD347.00K) is about average for companies of similar size in the Hong Kong market ($USD488.81K).

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


Board Members

NamePositionTenureCompensationOwnership
Chin-Chu Lu
Chairman6yrsUS$769.00k0.0028% $548.5k
Pei-Chun Tsai
MD & Executive Director6.75yrsUS$347.00kno data
Cheng-Tien Lin
Senior EVP & Executive Director5yrsUS$383.00k0.0028% $548.5k
Lu Chan
Executive Director19yrsUS$274.00kno data
Hong-Chih Liu
Executive Director6.75yrsUS$556.00k0.0073% $1.4m
Ming-Lun Tsai
Executive Director6.75yrsUS$291.00k0.0045% $890.6k
Chia-Ho Hu
Executive Director5yrsUS$142.00k0.0073% $1.4m
Dien Chien Hu
Executive Director3yrsUS$544.00k0.012% $2.3m
Hak Kun Wong
Independent Non-Executive Director1.75yrsUS$23.00kno data
Lai Ho
Independent Non-Executive Director0.83yrno datano data

5.5yrs

Average Tenure

54.5yo

Average Age

Experienced Board: 551's board of directors are considered experienced (5.5 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

Yue Yuen Industrial (Holdings) Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Yue Yuen Industrial (Holdings) Limited
  • Ticker: 551
  • Exchange: SEHK
  • Founded: 1969
  • Industry: Footwear
  • Sector: Consumer Durables
  • Market Cap: HK$19.660b
  • Shares outstanding: 1.61b
  • Website: https://www.yueyuen.com

Number of Employees


Location

  • Yue Yuen Industrial (Holdings) Limited
  • C-BONS International Center
  • 22nd Floor
  • Kwun Tong
  • Kowloon
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
YUEI.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJul 1992
551SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJul 1992
YUE1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJul 1992
551SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJul 1992
551SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJul 1992
YUEI.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDOct 2008

Biography

Yue Yuen Industrial (Holdings) Limited, an investment holding company, engages in manufacturing, marketing, and retailing athletic footwear, athletic style leisure footwear, and casual and outdoor footwear in the People’s Republic of China, the United States, Europe, and internationally. It operates as an original design manufacturer/original equipment manufacturer for various international brand names, such as Nike, Adidas, Reebok, ASICS, New Balance, Puma, Under Amour, Converse, Merrell, Salomon, and Timberland, as well as retails and distributes sportswear and apparel products. The company manufactures and sells of leather products, apparels, and sports sandals, as well as soles, components, and others; distribution of licensed products; and property leasing and management. The company was founded in 1969 and is headquartered in Kwun Tong, Hong Kong. Yue Yuen Industrial (Holdings) Limited is a subsidiary of Pou Chen Corporation. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/30 12:43
End of Day Share Price2020/03/30 00:00
Earnings2019/09/30
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.