SEHK:1180

Stock Analysis Report

Executive Summary

Paradise Entertainment Limited, an investment holding company, primarily provides casino management services in Macau and internationally.

Rewards

Trading at 27.9% below its fair value

Earnings grew by 50.3% over the past year

Risk Analysis

High level of non-cash earnings

Unstable dividend track record



Snowflake Analysis

Excellent balance sheet with proven track record.

Share Price & News

How has Paradise Entertainment's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 1180 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

1180

2.8%

HK Hospitality

1.7%

HK Market


1 Year Return

-2.3%

1180

5.6%

HK Hospitality

-2.9%

HK Market

Return vs Industry: 1180 underperformed the Hong Kong Hospitality industry which returned 5.6% over the past year.

Return vs Market: 1180 matched the Hong Kong Market which returned -2.9% over the past year.


Shareholder returns

1180IndustryMarket
7 Day0%2.8%1.7%
30 Day-1.1%-10.0%-4.8%
90 Day-5.5%0.3%3.4%
1 Year-0.1%-2.3%8.8%5.6%0.7%-2.9%
3 Year-39.0%-40.3%23.6%12.5%15.3%3.6%
5 Year-65.5%-66.9%9.6%-7.7%15.9%-3.5%

Price Volatility Vs. Market

How volatile is Paradise Entertainment's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Paradise Entertainment undervalued compared to its fair value and its price relative to the market?

27.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 1180 (HK$0.86) is trading below our estimate of fair value (HK$1.19)

Significantly Below Fair Value: 1180 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 1180 is poor value based on its PE Ratio (17.3x) compared to the Hospitality industry average (12.1x).

PE vs Market: 1180 is poor value based on its PE Ratio (17.3x) compared to the Hong Kong market (10.1x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 1180's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 1180 is overvalued based on its PB Ratio (1.6x) compared to the HK Hospitality industry average (0.8x).


Next Steps

Future Growth

How is Paradise Entertainment forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

14.1%

Forecasted Consumer Services 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 Paradise Entertainment 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 Paradise Entertainment performed over the past 5 years?

12.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1180 has a high level of non-cash earnings.

Growing Profit Margin: 1180's current net profit margins (4.4%) are higher than last year (3.2%).


Past Earnings Growth Analysis

Earnings Trend: 1180 has become profitable over the past 5 years, growing earnings by 12.1% per year.

Accelerating Growth: 1180's earnings growth over the past year (50.3%) exceeds its 5-year average (12.1% per year).

Earnings vs Industry: 1180 earnings growth over the past year (50.3%) exceeded the Hospitality industry -2.1%.


Return on Equity

High ROE: 1180's Return on Equity (8.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Paradise Entertainment's financial position?


Financial Position Analysis

Short Term Liabilities: 1180's short term assets (HK$511.0M) exceed its short term liabilities (HK$137.9M).

Long Term Liabilities: 1180's short term assets (HK$511.0M) exceed its long term liabilities (HK$93.4M).


Debt to Equity History and Analysis

Debt Level: 1180's debt to equity ratio (14.2%) is considered satisfactory.

Reducing Debt: 1180's debt to equity ratio has increased from 5.2% to 14.2% over the past 5 years.


Balance Sheet

Inventory Level: 1180 has a high level of physical assets or inventory.

Debt Coverage by Assets: 1180's debt is covered by short term assets (assets are 5.8x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: 1180 is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: 1180 is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

What is Paradise Entertainment's current dividend yield, its reliability and sustainability?

2.91%

Current Dividend Yield


Dividend Yield vs Market

company2.9%marketbottom25%2.3%markettop25%6.3%industryaverage3.0%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: 1180's dividend (2.91%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.27%).

High Dividend: 1180's dividend (2.91%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.34%).


Stability and Growth of Payments

Stable Dividend: 1180 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 1180 has only been paying a dividend for 6 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (50.2%), 1180's dividend payments are 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?

10.8yrs

Average board tenure


CEO

Jay Chun (54yo)

21.1yrs

Tenure

HK$13,474,000

Compensation

Mr. Jay Chun has been the Managing Director of Paradise Entertainment Limited since January 1999 and has been its Chairman since July 2002. Mr. Chun has a solid background in information technology and mar ...


CEO Compensation Analysis

Compensation vs Market: Jay's total compensation ($USD1.73M) is above average for companies of similar size in the Hong Kong market ($USD225.53K).

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


Board Members

NamePositionTenureCompensationOwnership
Jay Chun
Chairman & MD21.1yrsHK$13.47m59.97% HK$542.6m
Shiyong Shan
Executive Director21.3yrsHK$12.02m2.48% HK$22.4m
Liming Hu
Executive Director9.3yrsHK$120.00kno data
Zongyang Li
Independent Non Executive Director12.4yrsHK$120.00kno data
Kai-Shing Tao
Independent Non-Executive Director5.8yrsHK$120.00kno data
Kiu Sam Tang
Independent Non-Executive Director5.8yrsHK$120.00kno data

10.8yrs

Average Tenure

54yo

Average Age

Experienced Board: 1180's board of directors are seasoned and experienced ( 10.8 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.


Ownership Breakdown

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


Top Shareholders

Company Information

Paradise Entertainment Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Paradise Entertainment Limited
  • Ticker: 1180
  • Exchange: SEHK
  • Founded: 1996
  • Industry: Casinos and Gaming
  • Sector: Consumer Services
  • Market Cap: HK$904.879m
  • Shares outstanding: 1.05b
  • Website: https://www.hk1180.com

Number of Employees


Location

  • Paradise Entertainment Limited
  • Entertainment Building
  • Unit C
  • Central
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1180SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJan 1997
LIL3DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1997
PDSS.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1997

Biography

Paradise Entertainment Limited, an investment holding company, primarily provides casino management services in Macau and internationally. The company operates through Casino Management Services and Gaming Systems segments. It operates Casino Kam Pek Paradise, which offers various games, such as baccarat, roulette, sic bo, etc. on live multi gaming terminals, traditional tables, and slot machines; and Casino Waldo, a boutique hotel accommodating 162 guest rooms and a casino to play games on traditional tables, slot machines, and live multi gaming machines. The company also engages in the development, sale, and leasing of electronic gaming equipment and systems. Its gaming products include the Live Multi Game Machine system, which broadcasts live dealers to multiple terminals and supports multiple tables betting on the same terminal; and the Paradise Jackpot System, a baccarat side-bet progressive jackpot. In addition, it provides management and consulting services; and properties holding, market development, and software development services. The company was formerly known as LifeTec Group Limited and changed its name to Paradise Entertainment Limited in May 2007. The company was incorporated in 1996 and is headquartered in Central, Hong Kong. Paradise Entertainment Limited is a subsidiary of August Profit Investments Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 12:35
End of Day Share Price2020/02/17 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.