SEHK:1565

Stock Analysis Report

Executive Summary

Virscend Education Company Limited, an investment holding company, provides K-12 private education services in the People’s Republic of China.

Rewards

Trading at 0.2% below its fair value

Earnings are forecast to grow 34.18% per year

Earnings have grown 29.9% per year over the past 5 years

Risk Analysis

Has a high level of debt

Unstable dividend track record

Highly volatile share price over past 3 months



Snowflake Analysis

Exceptional growth potential and good value.


Similar Companies

Share Price & News

How has Virscend Education's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 1565's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-2.6%

1565

-2.3%

HK Consumer Services

1.7%

HK Market


1 Year Return

-52.1%

1565

-0.3%

HK Consumer Services

-2.9%

HK Market

Return vs Industry: 1565 underperformed the Hong Kong Consumer Services industry which returned -0.3% over the past year.

Return vs Market: 1565 underperformed the Hong Kong Market which returned -2.9% over the past year.


Shareholder returns

1565IndustryMarket
7 Day-2.6%-2.3%1.7%
30 Day-7.0%-3.0%-4.8%
90 Day-18.1%9.2%3.4%
1 Year-50.6%-52.1%1.7%-0.3%0.7%-2.9%
3 Year-60.6%-62.9%-4.3%-9.2%15.3%3.6%
5 Yearn/a28.3%17.7%15.9%-3.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Virscend Education undervalued compared to its fair value and its price relative to the market?

0.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 1565 (HK$1.85) is trading below our estimate of fair value (HK$1.85)

Significantly Below Fair Value: 1565 is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: 1565 is good value based on its PE Ratio (13.5x) compared to the Consumer Services industry average (15.8x).

PE vs Market: 1565 is poor value based on its PE Ratio (13.5x) compared to the Hong Kong market (10.1x).


Price to Earnings Growth Ratio

PEG Ratio: 1565 is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: 1565 is good value based on its PB Ratio (1.9x) compared to the HK Consumer Services industry average (2x).


Next Steps

Future Growth

How is Virscend Education forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

34.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1565's forecast earnings growth (34.2% per year) is above the savings rate (1.6%).

Earnings vs Market: 1565's earnings (34.2% per year) are forecast to grow faster than the Hong Kong market (11.7% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 1565's revenue (23.3% per year) is forecast to grow faster than the Hong Kong market (10.5% per year).

High Growth Revenue: 1565's revenue (23.3% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 1565's Return on Equity is forecast to be high in 3 years time (21.2%)


Next Steps

Past Performance

How has Virscend Education performed over the past 5 years?

29.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1565 has high quality earnings.

Growing Profit Margin: 1565's current net profit margins (28.5%) are lower than last year (32.2%).


Past Earnings Growth Analysis

Earnings Trend: 1565's earnings have grown significantly by 29.9% per year over the past 5 years.

Accelerating Growth: 1565's earnings growth over the past year (11%) is below its 5-year average (29.9% per year).

Earnings vs Industry: 1565 earnings growth over the past year (11%) underperformed the Consumer Services industry 15.4%.


Return on Equity

High ROE: 1565's Return on Equity (14.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Virscend Education's financial position?


Financial Position Analysis

Short Term Liabilities: 1565's short term assets (CN¥1.1B) do not cover its short term liabilities (CN¥1.5B).

Long Term Liabilities: 1565's short term assets (CN¥1.1B) exceed its long term liabilities (CN¥1.1B).


Debt to Equity History and Analysis

Debt Level: 1565's debt to equity ratio (45.3%) is considered high.

Reducing Debt: 1565's debt to equity ratio has reduced from 217% to 45.3% over the past 5 years.

Debt Coverage: 1565's debt is well covered by operating cash flow (39.6%).

Interest Coverage: 1565's interest payments on its debt are well covered by EBIT (8.5x coverage).


Balance Sheet

Inventory Level: 1565 has a high level of physical assets or inventory.

Debt Coverage by Assets: 1565's debt is not covered by short term assets (assets are 0.9x debt).


Next Steps

Dividend

What is Virscend Education's current dividend yield, its reliability and sustainability?

4.25%

Current Dividend Yield


Dividend Yield vs Market

company4.2%marketbottom25%2.3%markettop25%6.3%industryaverage2.1%forecastin3Years5.1%

Current dividend yield vs market & industry

Notable Dividend: 1565's dividend (4.25%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.27%).

High Dividend: 1565's dividend (4.25%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.34%).


Stability and Growth of Payments

Stable Dividend: 1565 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 1565's dividend payments have increased, but the company has only paid a dividend for 3 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (58.3%), 1565'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?

4.4yrs

Average management tenure


CEO

Yude Yan (57yo)

1.3yrs

Tenure

CN¥865,000

Compensation

Mr. Yude Yan has been Executive Director at Virscend Education Company Limited since August 31, 2015 and also it's Chief Executive Officer since November 15, 2018. He served as its Director since March 13, ...


CEO Compensation Analysis

Compensation vs Market: Yude's total compensation ($USD123.81K) is below average for companies of similar size in the Hong Kong market ($USD495.88K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Xiaoying Wang
Chairwoman4.5yrsCN¥865.00k2.19% CN¥124.2m
Yude Yan
CEO & Executive Director1.3yrsCN¥865.00k48.15% CN¥2.7b
Bangkai Deng
COO & Executive Director1.3yrsCN¥226.00k0.0065% CN¥368.3k
Jiayu Ye
Executive Director4.5yrsCN¥865.00kno data
Juan Zhang
Chief Financial Officer4.5yrsno datano data
Chaoran Zheng
Director of Investor Relations0yrsno datano data
Dajia Yin
President of the University15.8yrsno datano data
Sau Mei Ng
Company Secretary4.3yrsno datano data
Zhifa Gong
Acting Principal of Chengdu Foreign Languages School4.4yrsno datano data
Minghua Xiao
Principal of Chengdu Experimental Foreign Languages School (Western Campus)12.4yrsno datano data

4.4yrs

Average Tenure

57yo

Average Age

Experienced Management: 1565's management team is considered experienced (4.4 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Xiaoying Wang
Chairwoman4.5yrsCN¥865.00k2.19% CN¥124.2m
Yude Yan
CEO & Executive Director1.3yrsCN¥865.00k48.15% CN¥2.7b
Bangkai Deng
COO & Executive Director1.3yrsCN¥226.00k0.0065% CN¥368.3k
Jiayu Ye
Executive Director4.5yrsCN¥865.00kno data
Kim Sun Chan
Independent Non Executive Director4.2yrsCN¥104.00kno data
Chiu Wing Sit
Independent Non-Executive Director4.2yrsCN¥104.00kno data
Ruizheng Wen
Independent Non-Executive Director1.3yrsCN¥11.00kno data

4.2yrs

Average Tenure

57yo

Average Age

Experienced Board: 1565's board of directors are considered experienced (4.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: 1565 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

Virscend Education Company Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Virscend Education Company Limited
  • Ticker: 1565
  • Exchange: SEHK
  • Founded: 2000
  • Industry: Education Services
  • Sector: Consumer Services
  • Market Cap: HK$5.683b
  • Shares outstanding: 3.09b
  • Website: https://www.virscendeducation.com

Number of Employees


Location

  • Virscend Education Company Limited
  • No. 23 He Xin Lu
  • Pi County
  • Chengdu
  • Sichuan Province
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1565SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJan 2016

Biography

Virscend Education Company Limited, an investment holding company, provides K-12 private education services in the People’s Republic of China. It operates schools for grades K-12, which include Chengdu Foreign Languages School, Chengdu Experimental Foreign Languages School, Chengdu Experimental Foreign Languages School (Western Campus), the Primary School Attached to Chengdu Foreign Languages School, and Kindergarten of the Primary School attached to Chengdu Jinniu District Foreign Languages School. The company also operates Chengdu Institute Sichuan International Studies University; and offers elementary school education services. As of December 31, 2018, it had an enrollment of approximately 45,802 students, which included 29,415 students in K-12 schools and 16,387 students in the university. Virscend Education Company Limited was founded in 2000 and is headquartered in Chengdu, the People’s Republic of China. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/17 13:11
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.