SEHK:1158

Stock Analysis Report

Zhejiang New Century Hotel Management

Executive Summary

Zhejiang New Century Hotel Management Co., Ltd.

Rewards

Trading at 73.1% below its fair value

Earnings are forecast to grow 19.5% per year

Earnings grew by 8.3% over the past year

Risk Analysis

Unstable dividend track record



Snowflake Analysis

Excellent balance sheet with proven track record.

Share Price & News

How has Zhejiang New Century Hotel Management's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 1158 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.1%

1158

-7.4%

HK Hospitality

-3.1%

HK Market


1 Year Return

n/a

1158

12.1%

HK Hospitality

2.3%

HK Market

Return vs Industry: Insufficient data to determine how 1158 performed against the Hong Kong Hospitality industry.

Return vs Market: Insufficient data to determine how 1158 performed against the Hong Kong Market.


Shareholder returns

1158IndustryMarket
7 Day-1.1%-7.4%-3.1%
30 Day-2.0%1.5%0.5%
90 Day-5.0%4.2%5.3%
1 Yearn/a15.6%12.1%6.1%2.3%
3 Yearn/a26.6%14.9%22.2%9.8%
5 Yearn/a10.7%-7.0%18.0%-1.7%

Price Volatility Vs. Market

How volatile is Zhejiang New Century Hotel Management's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Zhejiang New Century Hotel Management 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: 1158 (HK$15.08) is trading below our estimate of fair value (HK$55.95)

Significantly Below Fair Value: 1158 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 1158 is poor value based on its PE Ratio (16.4x) compared to the Hospitality industry average (11.5x).

PE vs Market: 1158 is poor value based on its PE Ratio (16.4x) compared to the Hong Kong market (10.5x).


Price to Earnings Growth Ratio

PEG Ratio: 1158 is good value based on its PEG Ratio (0.8x)


Price to Book Ratio

PB vs Industry: 1158 is overvalued based on its PB Ratio (2.6x) compared to the HK Hospitality industry average (0.9x).


Next Steps

Future Growth

How is Zhejiang New Century Hotel Management forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

19.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1158's forecast earnings growth (19.5% per year) is above the savings rate (1.6%).

Earnings vs Market: 1158's earnings (19.5% per year) are forecast to grow faster than the Hong Kong market (11.3% per year).

High Growth Earnings: 1158's earnings are forecast to grow, but not significantly.

Revenue vs Market: 1158's revenue (16% per year) is forecast to grow faster than the Hong Kong market (10.2% per year).

High Growth Revenue: 1158's revenue (16% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 1158's Return on Equity is forecast to be low in 3 years time (13.2%).


Next Steps

Past Performance

How has Zhejiang New Century Hotel Management performed over the past 5 years?

33.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1158 has high quality earnings.

Growing Profit Margin: 1158's current net profit margins (10.1%) are higher than last year (10.1%).


Past Earnings Growth Analysis

Earnings Trend: 1158's earnings have grown significantly by 33.5% per year over the past 5 years.

Accelerating Growth: 1158's earnings growth over the past year (8.3%) is below its 5-year average (33.5% per year).

Earnings vs Industry: 1158 earnings growth over the past year (8.3%) exceeded the Hospitality industry -2.1%.


Return on Equity

High ROE: 1158's Return on Equity (12.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Zhejiang New Century Hotel Management's financial position?


Financial Position Analysis

Short Term Liabilities: 1158's short term assets (CN¥1.4B) exceed its short term liabilities (CN¥978.1M).

Long Term Liabilities: 1158's short term assets (CN¥1.4B) do not cover its long term liabilities (CN¥2.0B).


Debt to Equity History and Analysis

Debt Level: 1158 is debt free.

Reducing Debt: 1158 had no debt 5 years ago.

Debt Coverage: 1158 has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: 1158 has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 1158 has a high level of physical assets or inventory.

Debt Coverage by Assets: 1158's debt is not covered by short term assets (assets are -3.1023050431188E+15x debt).


Next Steps

Dividend

What is Zhejiang New Century Hotel Management's current dividend yield, its reliability and sustainability?

2.72%

Current Dividend Yield


Dividend Yield vs Market

company2.7%marketbottom25%2.2%markettop25%6.2%industryaverage2.8%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: 1158's dividend (2.69%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.17%).

High Dividend: 1158's dividend (2.69%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.02%).


Stability and Growth of Payments

Stable Dividend: Too early to tell whether 1158's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if 1158's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (44%), 1158'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

What is the CEO of Zhejiang New Century Hotel Management's salary, the management and board of directors tenure and is there insider trading?

2.3yrs

Average management tenure


CEO

Miaoqiang Chen (56yo)

0yrs

Tenure

0

Mr. Miaoqiang Chen has been Director of Zhejiang New Century Hotel Investment & Management Group Ltd since December 17, 2008 and has been its President since January 2017, being responsible for the overall ...


Management Age and Tenure

2.3yrs

Average Tenure

47yo

Average Age

Experienced Management: 1158's management team is considered experienced (2.3 years average tenure).


Board Age and Tenure

3.2yrs

Average Tenure

53yo

Average Age

Experienced Board: 1158's board of directors are considered experienced (3.2 years average tenure).


Insider Trading

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


Recent Insider Transactions

SellHK$250,56010 Oct 19
Lik Yeung
EntityIndividual
Shares16,000
Max PriceHK$15.66
SellHK$1,770,57002 Oct 19
Lik Yeung
EntityIndividual
Shares114,600
Max PriceHK$15.45
BuyHK$1,428,55512 Apr 19
Rongtong Fund Management Co., Ltd.
EntityCompany
Shares90,400
Max PriceHK$15.80
BuyHK$1,775,10801 Apr 19
Rongtong Fund Management Co., Ltd.
EntityCompany
Shares110,600
Max PriceHK$16.05
BuyHK$102,795,01620 Mar 19
Lik Yeung
EntityIndividual
Shares6,230,000
Max PriceHK$16.50
BuyHK$1,497,19518 Mar 19
Rongtong Fund Management Co., Ltd.
EntityCompany
Shares98,000
Max PriceHK$15.28
BuyHK$115,365,39415 Mar 19
Rongtong Fund Management Co., Ltd.
EntityCompany
Shares6,990,000
Max PriceHK$16.54
BuyHK$8,176,55115 Mar 19
Rongtong Fund Management Co., Ltd.
EntityCompany
Shares500,000
Max PriceHK$16.35
BuyHK$78,375,01213 Mar 19
Huatai Asset Management Co., Ltd.
EntityCompany
Shares4,750,000
Max PriceHK$16.50

Ownership Breakdown

Dilution of Shares: 1158 only recently listed within the past 12 months, with total shares outstanding growing by 10.3% in the past year..


Management Team

  • Miaoqiang Chen (56yo)

    Executive Director & President

    • Suet Lam Chan

      Joint Company Secretary

      • Tenure: 1.5yrs
    • Donglin Li (44yo)

      VP & Secretary to the Board

      • Tenure: 2.6yrs
    • Huajuan Zhao (46yo)

      Chief Financial Officer

      • Tenure: 6yrs
    • Wenjie Jin (50yo)

      Executive Chairman

      • Frank Hou (56yo)

        Executive President

        • Tenure: 0.8yrs
      • Lv Ye (47yo)

        Vice President

        • Tenure: 2.6yrs
      • Jianping Dai (47yo)

        VP & GM of the Upscale Business Hotel Development & Management Business Division

        • Tenure: 2.3yrs
      • Wenfang Chen (41yo)

        Vice President

        • Tenure: 2.3yrs
      • Mingsheng Zhu (49yo)

        Vice President

        • Tenure: 0.8yrs

      Board Members

      • Yun Qiu (56yo)

        Independent Non Executive Director

        • Tenure: 2.6yrs
      • Miaoqiang Chen (56yo)

        Executive Director & President

        • Miaolin Chen (66yo)

          Non-Executive Director

          • Tenure: 11.1yrs
        • Canrong Chen (56yo)

          Non-Executive Director

          • Tenure: 11.1yrs
        • Eric Zhang (43yo)

          Non Executive Director

          • Tenure: 3.2yrs
        • Rungang Zhang (60yo)

          Independent Non Executive Director

          • Tenure: 2.6yrs
        • Tianyi Jiang (36yo)

          Non-Executive Director

          • William Khoo (39yo)

            Independent Non Executive Director

            • Tenure: 1.4yrs
          • Xianghong Zha (47yo)

            Supervisor

            • Tenure: 3.2yrs
          • Wenjie Jin (50yo)

            Executive Chairman

            Company Information

            Zhejiang New Century Hotel Management Co., Ltd.'s company bio, employee growth, exchange listings and data sources


            Key Information

            • Name: Zhejiang New Century Hotel Management Co., Ltd.
            • Ticker: 1158
            • Exchange: SEHK
            • Founded: 1988
            • Industry: Hotels, Resorts and Cruise Lines
            • Sector: Consumer Services
            • Market Cap: HK$4.200b
            • Shares outstanding: 280.00m
            • Website: https://www.kaiyuanhotels.com

            Number of Employees


            Location

            • Zhejiang New Century Hotel Management Co., Ltd.
            • No. 818 Shixinzhong Road
            • 18th Floor
            • Hangzhou
            • Zhejiang Province
            • China

            Listings

            TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
            1158SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares-Foreign ListedHKHKDMar 2019

            Biography

            Zhejiang New Century Hotel Management Co., Ltd. owns, operates, franchises, and manages hotels and resorts in the People’s Republic of China. The company operates upscale hotels under the Grand New Century Hotels, New Century Resorts, New Century Grand House, and New Century Wonderland brands; mid-scale hotels under the New Century Hotel and New Century Manju Hotel brands; upscale resort hotels under the New Century Senbo brand; other mid-scale full service hotels under the Maison New Century brand; and other mid-scale select service hotels under the Kaiyuan Life, Mayart Hotel, Wonderland RV Camp, and A.T.K Hotel brands. Its customers primarily comprise hotel owners, travel agencies, online travel agencies, and corporate clients. The company was founded in 1988 and is headquartered in Hangzhou, China. Zhejiang New Century Hotel Management Co., Ltd. is a subsidiary of New Century Tourism Group Co., Ltd. 


            Company Analysis and Financial Data Status

            All financial data provided by Standard & Poor's Capital IQ.
            DataLast Updated (UTC time)
            Company Analysis2020/01/22 13:03
            End of Day Share Price2020/01/22 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.