SEHK:1765

Stock Analysis Report

Executive Summary

Hope Education Group Co., Ltd. provides private higher education services in the People’s Republic of China.

Rewards

Trading at 23.8% below its fair value

Earnings are forecast to grow 37.56% per year

Earnings grew by 32.8% over the past year

Risk Analysis

Has a high level of debt

Highly volatile share price over past 3 months

Shareholders have been diluted in the past year



Snowflake Analysis

Solid track record with high growth potential.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 1765's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-2.2%

1765

-0.5%

HK Consumer Services

0.6%

HK Market


1 Year Return

43.4%

1765

-1.0%

HK Consumer Services

-4.5%

HK Market

Return vs Industry: 1765 exceeded the Hong Kong Consumer Services industry which returned -1% over the past year.

Return vs Market: 1765 exceeded the Hong Kong Market which returned -4.5% over the past year.


Shareholder returns

1765IndustryMarket
7 Day-2.2%-0.5%0.6%
30 Day2.3%-2.8%-5.2%
90 Day29.6%8.4%2.3%
1 Year45.9%43.4%1.1%-1.0%-1.0%-4.5%
3 Yearn/a-4.3%-9.3%14.4%2.9%
5 Yearn/a30.6%19.8%15.5%-3.8%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

23.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 1765 (HK$1.75) is trading below our estimate of fair value (HK$2.3)

Significantly Below Fair Value: 1765 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 1765 is poor value based on its PE Ratio (37x) compared to the Consumer Services industry average (15.8x).

PE vs Market: 1765 is poor value based on its PE Ratio (37x) compared to the Hong Kong market (10.1x).


Price to Earnings Growth Ratio

PEG Ratio: 1765 is good value based on its PEG Ratio (1x)


Price to Book Ratio

PB vs Industry: 1765 is overvalued based on its PB Ratio (2.4x) compared to the HK Consumer Services industry average (2x).


Next Steps

Future Growth

How is Hope Education Group forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

37.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1765's forecast earnings growth (37.6% per year) is above the savings rate (1.6%).

Earnings vs Market: 1765's earnings (37.6% per year) are forecast to grow faster than the Hong Kong market (11.8% per year).

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

Revenue vs Market: 1765's revenue (25.4% per year) is forecast to grow faster than the Hong Kong market (10.5% per year).

High Growth Revenue: 1765's revenue (25.4% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 1765's Return on Equity is forecast to be low in 3 years time (13.4%).


Next Steps

Past Performance

How has Hope Education Group performed over the past 5 years?

24.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1765 has high quality earnings.

Growing Profit Margin: 1765's current net profit margins (25.3%) are higher than last year (23.3%).


Past Earnings Growth Analysis

Earnings Trend: 1765's earnings have grown significantly by 24.4% per year over the past 5 years.

Accelerating Growth: 1765's earnings growth over the past year (32.8%) exceeds its 5-year average (24.4% per year).

Earnings vs Industry: 1765 earnings growth over the past year (32.8%) exceeded the Consumer Services industry 15.4%.


Return on Equity

High ROE: 1765's Return on Equity (6.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Hope Education Group's financial position?


Financial Position Analysis

Short Term Liabilities: 1765's short term assets (CN¥3.2B) exceed its short term liabilities (CN¥1.4B).

Long Term Liabilities: 1765's short term assets (CN¥3.2B) exceed its long term liabilities (CN¥2.4B).


Debt to Equity History and Analysis

Debt Level: 1765's debt to equity ratio (51.2%) is considered high.

Reducing Debt: Insufficient data to determine if 1765's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: 1765's debt is well covered by operating cash flow (32.9%).

Interest Coverage: 1765's interest payments on its debt are well covered by EBIT (4.1x coverage).


Balance Sheet

Inventory Level: 1765 has a high level of physical assets or inventory.

Debt Coverage by Assets: 1765's debt is covered by short term assets (assets are 1.5x debt).


Next Steps

Dividend

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

0.95%

Current Dividend Yield


Dividend Yield vs Market

company1.0%marketbottom25%2.3%markettop25%6.4%industryaverage2.1%forecastin3Years2.1%

Current dividend yield vs market & industry

Notable Dividend: 1765's dividend (0.95%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.28%).

High Dividend: 1765's dividend (0.95%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.38%).


Stability and Growth of Payments

Stable Dividend: 1765 is not paying a notable dividend for the Hong Kong market, therefore no need to check if payments are stable.

Growing Dividend: 1765 is not paying a notable dividend for the Hong Kong market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: 1765 is not paying a notable dividend for the Hong Kong market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 1765's dividend in 3 years as they are not forecast to pay a notable one for the Hong Kong market.


Next Steps

Management

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

2.0yrs

Average management tenure


CEO

Huiwu Wang (46yo)

2yrs

Tenure

0

Mr. Huiwu Wang serves as co-owner at Hope Education Investment Limited. 


Leadership Team

NamePositionTenureCompensationOwnership
Changjun Xu
Chairman2yrsno datano data
Huiwu Wang
CEO, President & Executive Director2yrsno datano data
Xuan He
Chief Financial Officer2yrsno datano data
Lin Jiang
COO & Executive VP2yrsno datano data
Tao Li
Chief Strategy Officer & Executive Director2.9yrsno datano data
Houyi Chen
Senior VP & Education Management Committee Director2yrsno datano data
Qunwei Lou
Senior Vice President2yrsno datano data
Xiao Li
Senior Vice President2yrsno datano data
Zhongcai Huang
VP & Joint Company Secretary1.3yrsno datano data
Wing Han Leung
Joint Company Secretary2yrsno datano data

2.0yrs

Average Tenure

49yo

Average Age

Experienced Management: 1765's management team is considered experienced (2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Changjun Xu
Chairman2yrsno datano data
Huiwu Wang
CEO, President & Executive Director2yrsno datano data
Tao Li
Chief Strategy Officer & Executive Director2.9yrsno datano data
Zhichao Lu
Non-Executive Director2.9yrsno datano data
Hao Gao
Independent Non-Executive Director1.6yrsno datano data
Jianyuan Tang
Non-Executive Director2.9yrsno datano data
Degen Wang
Non-Executive Director2.9yrsno datano data
Jin Zhang
Independent Non-Executive Director1.6yrsno datano data
Yunhua Chen
Independent Non-Executive Director1.6yrsno datano data

2.9yrs

Average Tenure

49yo

Average Age

Experienced Board: 1765's board of directors are not considered experienced ( 2.9 years average tenure), which suggests a new board.


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 been diluted in the past year, with total shares outstanding growing by 31.4%.


Top Shareholders

Company Information

Hope Education Group Co., Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Hope Education Group Co., Ltd.
  • Ticker: 1765
  • Exchange: SEHK
  • Founded: 2007
  • Industry: Education Services
  • Sector: Consumer Services
  • Market Cap: HK$11.467b
  • Shares outstanding: 6.67b
  • Website: https://www.hopeedu.com

Number of Employees


Location

  • Hope Education Group Co., Ltd.
  • Administrative Building
  • 5th Floor
  • Chengdu
  • Sichuan Province
  • 610091
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1765SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDAug 2018
HE1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURAug 2018
1765SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDAug 2018

Biography

Hope Education Group Co., Ltd. provides private higher education services in the People’s Republic of China. The company provides self-study examination, adult education, and technical management and consultancy services, as well as sells textbooks and dormitory beddings. As of December 31, 2018, it owned and operated nine schools, including three independent colleges, five higher vocational colleges, and one technical college. The company was founded in 2007 and is headquartered in Chengdu, the People’s Republic of China. Hope Education Group Co., Ltd. is a subsidiary of Hope Education Investment Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/19 13:27
End of Day Share Price2020/02/19 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.