SEHK:1461

Stock Analysis Report

Executive Summary

LUZHENG FUTURES Company Limited, a futures company, provides brokerage services for commodity and financial futures in the People’s Republic of China.

Rewards

Trading at 54.5% below its fair value

Risk Analysis

Unstable dividend track record

Profit margins (12.3%) are lower than last year (25.6%)



Snowflake Analysis

Good value second-rate dividend payer.

Share Price & News

How has LUZHENG FUTURES's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 1461 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

1461

5.6%

HK Capital Markets

3.5%

HK Market


1 Year Return

-38.1%

1461

0.7%

HK Capital Markets

2.3%

HK Market

Return vs Industry: 1461 underperformed the Hong Kong Capital Markets industry which returned 0.7% over the past year.

Return vs Market: 1461 underperformed the Hong Kong Market which returned 2.3% over the past year.


Shareholder returns

1461IndustryMarket
7 Day0%5.6%3.5%
30 Day-1.3%4.7%3.1%
90 Day-14.3%-2.3%1.1%
1 Year-34.3%-38.1%3.6%0.7%6.0%2.3%
3 Year-45.1%-53.3%-15.8%-23.2%25.4%12.7%
5 Yearn/a-15.6%-29.4%23.0%2.4%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is LUZHENG FUTURES 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: 1461 (HK$0.78) is trading below our estimate of fair value (HK$1.71)

Significantly Below Fair Value: 1461 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 1461 is good value based on its PE Ratio (10.8x) compared to the Capital Markets industry average (12.1x).

PE vs Market: 1461 is poor value based on its PE Ratio (10.8x) compared to the Hong Kong market (10.3x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 1461's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 1461 is good value based on its PB Ratio (0.3x) compared to the HK Capital Markets industry average (0.5x).


Next Steps

Future Growth

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

12.3%

Forecasted Diversified Financials 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 LUZHENG FUTURES 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 LUZHENG FUTURES performed over the past 5 years?

7.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1461 has high quality earnings.

Growing Profit Margin: 1461's current net profit margins (12.3%) are lower than last year (25.6%).


Past Earnings Growth Analysis

Earnings Trend: 1461's earnings have grown by 7.4% per year over the past 5 years.

Accelerating Growth: 1461's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 1461 had negative earnings growth (-60.6%) over the past year, making it difficult to compare to the Capital Markets industry average (-29.6%).


Return on Equity

High ROE: 1461's Return on Equity (2.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is LUZHENG FUTURES's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: 1461 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 1461's debt is covered by short term assets (assets are 37.7x debt).


Financial Institutions Analysis

Asset Level: 1461's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if 1461 has a sufficient allowance for bad loans.

Low Risk Liabilities: 1461 reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if 1461 has an acceptable proportion of non-loan assets held.

Low Risk Deposits: 1461 has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if 1461 has an appropriate level of bad loans.


Next Steps

Dividend

What is LUZHENG FUTURES's current dividend yield, its reliability and sustainability?

7.88%

Current Dividend Yield


Dividend Yield vs Market

company7.9%marketbottom25%2.2%markettop25%6.2%industryaverage3.0%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: 1461's dividend (7.88%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.21%).

High Dividend: 1461's dividend (7.88%) is in the top 25% of dividend payers in the Hong Kong market (6.15%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, 1461 has been paying a dividend for less than 10 years.

Growing Dividend: 1461's dividend payments have increased, but the company has only paid a dividend for 4 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (85.2%), 1461'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 LUZHENG FUTURES's salary, the management and board of directors tenure and is there insider trading?

6.2yrs

Average board tenure


CEO

Qingbin Liu (50yo)

3.3yrs

Tenure

CN¥1,224,000

Compensation

Mr. Qingbin Liu has been General Manager at Luzheng Futures Co., Ltd. since August 15, 2016 and has been its Chief Executive Officer. Mr. Liu joined Luzheng Futures in May 2014. He serves as Director of Zh ...


CEO Compensation Analysis

Compensation vs Market: Qingbin's total compensation ($USD175.38K) is about average for companies of similar size in the Hong Kong market ($USD226.94K).

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


Board Age and Tenure

6.2yrs

Average Tenure

55yo

Average Age

Experienced Board: 1461's board of directors are considered experienced (6.2 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$474,96029 Mar 19
CITIC Capital Asset Management Limited
EntityCompany
Shares400,000
Max PriceHK$1.19
SellHK$22,056,89121 Feb 19
CITIC Capital Asset Management Limited
EntityCompany
Shares16,527,000
Max PriceHK$1.33

Ownership Breakdown

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


Management Team

  • Wing Shan Ng

    Joint Company Secretary

    • Tenure: 0yrs
  • Zhongwei Liang (45yo)

    Executive Director

    • Tenure: 7.5yrs
    • Compensation: CN¥494.00k
  • Yunzhi Liu (49yo)

    Deputy GM

    • Tenure: 11yrs
  • Jianmin Liu (49yo)

    Chief Risk Officer

    • Tenure: 0yrs
  • Qingbin Liu (50yo)

    GM & CEO

    • Tenure: 3.3yrs
    • Compensation: CN¥1.22m
  • Jinlong Zhong

    Executive Chairman

    • Tenure: 0yrs

Board Members

  • Chuanshun Wang (54yo)

    Independent Non Executive Director

    • Tenure: 7.9yrs
    • Compensation: CN¥119.00k
  • Zhongwei Liang (45yo)

    Executive Director

    • Tenure: 7.5yrs
    • Compensation: CN¥494.00k
  • Feng Liu (46yo)

    Non Executive Director

    • Tenure: 4.8yrs
  • Zhu Gao (56yo)

    Independent Non Executive Director

    • Tenure: 7.9yrs
    • Compensation: CN¥119.00k
  • Xuekui Li (56yo)

    Chairman of Supervisory Committee

    • Tenure: 3.3yrs
  • Dapeng Li (63yo)

    Independent Non-Executive Director

    • Tenure: 3.5yrs
    • Compensation: CN¥119.00k
  • Hongsong Liu

    Non-Executive Director

    • Tenure: 0yrs
  • Kainan Hu

    Non-Executive Director

    • Tenure: 0yrs
  • Jianping Zheng

    Independent Non-Executive Director

    • Tenure: 0yrs
  • Jinlong Zhong

    Executive Chairman

    • Tenure: 0yrs

Company Information

LUZHENG FUTURES Company Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: LUZHENG FUTURES Company Limited
  • Ticker: 1461
  • Exchange: SEHK
  • Founded: 1995
  • Industry: Investment Banking and Brokerage
  • Sector: Diversified Financials
  • Market Cap: HK$781.482m
  • Shares outstanding: 1.00b
  • Website: https://www.luzhengqh.com

Number of Employees


Location

  • LUZHENG FUTURES Company Limited
  • Securities Tower
  • 15-16 Floor
  • Jinan
  • Shandong Province
  • 250001
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1461SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares Foreign ListedHKHKDJul 2015

Biography

LUZHENG FUTURES Company Limited, a futures company, provides brokerage services for commodity and financial futures in the People’s Republic of China. The company’s Futures Brokerage segment offers futures ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/14 12:54
End of Day Share Price2019/12/13 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.