SEHK:573

Stock Analysis Report

Executive Summary

Tao Heung Holdings Limited, an investment holding company, operates restaurants and bakeries in Hong Kong and Mainland China.

Rewards

Trading at 82.6% below its fair value

Earnings grew by 37.7% over the past year

Risk Analysis

Earnings have declined by -16.68% per year over past 5 years

Unstable dividend track record



Snowflake Analysis

Undervalued with excellent balance sheet.

Share Price & News

How has Tao Heung Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 573 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.8%

573

-10.4%

HK Hospitality

-4.3%

HK Market


1 Year Return

-3.8%

573

6.3%

HK Hospitality

-0.7%

HK Market

Return vs Industry: 573 underperformed the Hong Kong Hospitality industry which returned 23.6% over the past year.

Return vs Market: 573 underperformed the Hong Kong Market which returned 6.4% over the past year.


Shareholder returns

573IndustryMarket
7 Day-0.8%-10.4%-4.3%
30 Day0%-2.2%-0.2%
90 Day-1.5%-0.9%4.1%
1 Year4.6%-3.8%9.6%6.3%3.0%-0.7%
3 Year-20.4%-37.9%22.3%11.1%20.2%8.0%
5 Year-47.5%-62.8%13.1%-5.0%18.7%-1.1%

Price Volatility Vs. Market

How volatile is Tao Heung Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Tao Heung 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: 573 (HK$1.3) is trading below our estimate of fair value (HK$7.48)

Significantly Below Fair Value: 573 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 573 is good value based on its PE Ratio (9.6x) compared to the Hospitality industry average (11.5x).

PE vs Market: 573 is good value based on its PE Ratio (9.6x) compared to the Hong Kong market (10.5x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 573's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 573 is good value based on its PB Ratio (0.8x) compared to the HK Hospitality industry average (0.9x).


Next Steps

Future Growth

How is Tao Heung Holdings forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

15.8%

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 Tao Heung Holdings 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 Tao Heung Holdings performed over the past 5 years?

-16.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 573 has high quality earnings.

Growing Profit Margin: 573's current net profit margins (3.4%) are higher than last year (2.4%).


Past Earnings Growth Analysis

Earnings Trend: 573's earnings have declined by -16.7% per year over the past 5 years.

Accelerating Growth: 573's earnings growth over the past year (37.7%) exceeds its 5-year average (-16.7% per year).

Earnings vs Industry: 573 earnings growth over the past year (37.7%) exceeded the Hospitality industry -2.1%.


Return on Equity

High ROE: 573's Return on Equity (8.3%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Tao Heung Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 573's short term assets (HK$936.1M) exceed its short term liabilities (HK$819.3M).

Long Term Liabilities: 573's short term assets (HK$936.1M) exceed its long term liabilities (HK$716.7M).


Debt to Equity History and Analysis

Debt Level: 573's debt to equity ratio (7.8%) is considered satisfactory.

Reducing Debt: 573's debt to equity ratio has increased from 7.4% to 7.8% over the past 5 years.

Debt Coverage: 573's debt is well covered by operating cash flow (385.5%).

Interest Coverage: 573's interest payments on its debt are well covered by EBIT (14.2x coverage).


Balance Sheet

Inventory Level: 573 has a high level of physical assets or inventory.

Debt Coverage by Assets: 573's debt is covered by short term assets (assets are 7.3x debt).


Next Steps

Dividend

What is Tao Heung Holdings's current dividend yield, its reliability and sustainability?

9.38%

Current Dividend Yield


Dividend Yield vs Market

company9.4%marketbottom25%2.2%markettop25%6.2%industryaverage2.9%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: 573's dividend (9.23%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.17%).

High Dividend: 573's dividend (9.23%) is in the top 25% of dividend payers in the Hong Kong market (6.02%)


Stability and Growth of Payments

Stable Dividend: 573's dividend payments have been volatile in the past 10 years.

Growing Dividend: 573's dividend payments have not increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (89%), 573's 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

What is the CEO of Tao Heung Holdings's salary, the management and board of directors tenure and is there insider trading?

12.8yrs

Average board tenure


CEO

Wai Chung (59yo)

0.2yrs

Tenure

HK$259,000

Compensation

Mr. Wai Ping Chung is a Founder of Tao Heung Holdings Limited and serves as its Chairman. Mr. Chung serves as Chief Executive Officer of Tao Heung Holdings Limited since November 19, 2019. Mr. Chung is pri ...


CEO Compensation Analysis

Compensation vs Market: Wai's total compensation ($USD33.31K) is below average for companies of similar size in the Hong Kong market ($USD296.12K).

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


Board Age and Tenure

12.8yrs

Average Tenure

61yo

Average Age

Experienced Board: 573's board of directors are seasoned and experienced ( 12.8 years average tenure).


Insider Trading

Insider Buying: 573 insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyHK$647,84915 Jan 20
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares500,000
Max PriceHK$1.30
BuyHK$6,42114 Jan 20
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares5,000
Max PriceHK$1.28
BuyHK$257,16008 Jan 20
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares200,000
Max PriceHK$1.29
BuyHK$193,99813 Dec 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares152,000
Max PriceHK$1.28
BuyHK$256,82010 Dec 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares200,000
Max PriceHK$1.28
BuyHK$128,59002 Dec 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares100,000
Max PriceHK$1.29
BuyHK$258,68027 Nov 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares200,000
Max PriceHK$1.29
BuyHK$257,48022 Nov 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares200,000
Max PriceHK$1.29
BuyHK$345,76220 Nov 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares270,000
Max PriceHK$1.28
BuyHK$625,20118 Nov 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares500,000
Max PriceHK$1.25
BuyHK$66,19814 Nov 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares51,000
Max PriceHK$1.30
BuyHK$260,88011 Nov 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares200,000
Max PriceHK$1.30
BuyHK$263,78004 Nov 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares200,000
Max PriceHK$1.32
BuyHK$258,42029 Oct 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares200,000
Max PriceHK$1.29
BuyHK$261,99925 Oct 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares200,000
Max PriceHK$1.31
BuyHK$259,70123 Oct 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares200,000
Max PriceHK$1.30
BuyHK$214,02122 Oct 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares165,000
Max PriceHK$1.30
BuyHK$250,90018 Oct 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares193,000
Max PriceHK$1.30
BuyHK$247,59017 Oct 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares189,000
Max PriceHK$1.31
BuyHK$130,00016 Oct 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares100,000
Max PriceHK$1.30
BuyHK$393,00002 Oct 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares300,000
Max PriceHK$1.31
BuyHK$137,00027 Sep 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares100,000
Max PriceHK$1.37
BuyHK$268,00029 Aug 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares200,000
Max PriceHK$1.34
BuyHK$800,31528 Aug 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares593,000
Max PriceHK$1.35
BuyHK$72,80027 Aug 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares52,000
Max PriceHK$1.40
BuyHK$54,74223 Jul 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares36,000
Max PriceHK$1.52
BuyHK$153,39922 Jul 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares101,000
Max PriceHK$1.52
BuyHK$190,94119 Jul 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares126,000
Max PriceHK$1.52
BuyHK$300,00117 Jul 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares200,000
Max PriceHK$1.50
BuyHK$143,04011 Jul 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares96,000
Max PriceHK$1.49
BuyHK$744,99909 Jul 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares500,000
Max PriceHK$1.49
BuyHK$131,72008 Jul 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares89,000
Max PriceHK$1.48
BuyHK$298,00004 Jul 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares200,000
Max PriceHK$1.49
BuyHK$290,00027 Jun 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares200,000
Max PriceHK$1.45
BuyHK$290,00125 Jun 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares200,000
Max PriceHK$1.45
BuyHK$144,00018 Jun 19
Wai Chung
EntityIndividual
Role
Chief Executive Officer
Founder
Shares100,000
Max PriceHK$1.44

Ownership Breakdown

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


Management Team

  • Rosa Lau (64yo)

    Chief Operations Officer- Hong Kong

    • Wing Tsang (44yo)

      CFO & Company Secretary

      • Ka Wong (61yo)

        Founder & Executive Director

        • Tenure: 12.8yrs
        • Compensation: HK$843.00k
      • Hiu Li (50yo)

        Director of Human Resources

        • Yuen Ho (57yo)

          Chief Officer of Operation- China Division & Executive Director

          • Tenure: 12.8yrs
          • Compensation: HK$1.45m
        • Wai Chung (59yo)

          Founder

          • Tenure: 0.2yrs
          • Compensation: HK$259.00k
        • Ming Chung (64yo)

          Founder and Director of Logistic Management - Hong Kong & Mainland China

          • Compensation: HK$271.00k
        • Sai Ying Chan

          Consultant

          • Chun Chung (33yo)

            Acting Director of Marketing & Business Development and Executive Director

            • Tenure: 0.2yrs

          Board Members

          • Michael Chan (67yo)

            Non-Executive Director

            • Tenure: 12.8yrs
            • Compensation: HK$204.00k
          • Yat Ng (63yo)

            Independent Non-Executive Director

            • Tenure: 12.8yrs
            • Compensation: HK$204.00k
          • Thomas Mak (56yo)

            Independent Non-Executive Director

            • Tenure: 12.8yrs
            • Compensation: HK$204.00k
          • Andrew Chan (65yo)

            Independent Non-Executive Director

            • Tenure: 12.8yrs
            • Compensation: HK$204.00k
          • Ka Wong (61yo)

            Founder & Executive Director

            • Tenure: 12.8yrs
            • Compensation: HK$843.00k
          • Yuen Ho (57yo)

            Chief Officer of Operation- China Division & Executive Director

            • Tenure: 12.8yrs
            • Compensation: HK$1.45m
          • Wai Chung (59yo)

            Founder

            • Tenure: 0.2yrs
            • Compensation: HK$259.00k
          • Siu Fong (61yo)

            Non-Executive Director

            • Tenure: 12.8yrs
            • Compensation: HK$204.00k
          • Chun Chung (33yo)

            Acting Director of Marketing & Business Development and Executive Director

            • Tenure: 0.2yrs

          Company Information

          Tao Heung Holdings Limited's company bio, employee growth, exchange listings and data sources


          Key Information

          • Name: Tao Heung Holdings Limited
          • Ticker: 573
          • Exchange: SEHK
          • Founded: 1991
          • Industry: Restaurants
          • Sector: Consumer Services
          • Market Cap: HK$1.301b
          • Shares outstanding: 1.02b
          • Website: https://www.taoheung.com.hk

          Number of Employees


          Location

          • Tao Heung Holdings Limited
          • No. 18 Dai Fat Street
          • Tai Po Industrial Estate
          • Tai Po
          • New Territories
          • Hong Kong

          Listings

          TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
          573SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJun 2007
          BVIDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJun 2007

          Biography

          Tao Heung Holdings Limited, an investment holding company, operates restaurants and bakeries in Hong Kong and Mainland China. The company engages in the provision of food catering services; and production, sale, and distribution of food products and other items related to restaurant operations; and provision of poultry farm operations. It also produces, slaughters, processes, and sells livestock; produces and retails bakery products; and provides management and promotion, treasury, and human resources support services, as well as trades in food and other operating items to restaurant operations. In addition, the company engages in the property investment activities. It operates restaurants under Tao Heung, Tao Square, Cheers Restaurant, Hak Ka Hut, Pier 88, Chao Inn, Chung’s Cuisine/Chung’s Kitchen, HITEA, Tai Cheong Bakery, JOYOUS One CHAO ZHOU CUISINE, Cheers Palace, RingerHut, and Tao’s Kitchen brands. The company was founded in 1991 and is based in Tai Po, Hong Kong. 


          Company Analysis and Financial Data Status

          All financial data provided by Standard & Poor's Capital IQ.
          DataLast Updated (UTC time)
          Company Analysis2020/01/24 12:47
          End of Day Share Price2020/01/23 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.