SEHK:373

Stock Analysis Report

Executive Summary

Allied Group Limited, an investment holding company, engages in the property investment and development, and financial service businesses in Hong Kong, Mainland China, and internationally.

Rewards

Trading at 68.4% below its fair value

Risk Analysis

Unstable dividend track record

Large one-off items impacting financial results

Profit margins (31.3%) are lower than last year (60.8%)



Snowflake Analysis

Undervalued average dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 373 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0.5%

373

-1.4%

HK Consumer Finance

-1.4%

HK Market


1 Year Return

-17.1%

373

-23.7%

HK Consumer Finance

3.5%

HK Market

Return vs Industry: 373 exceeded the Hong Kong Consumer Finance industry which returned -20.3% over the past year.

Return vs Market: 373 underperformed the Hong Kong Market which returned 6.4% over the past year.


Shareholder returns

373IndustryMarket
7 Day0.5%-1.4%-1.4%
30 Day3.6%-1.7%1.8%
90 Day-2.2%-3.9%6.0%
1 Year-12.6%-17.1%-21.9%-23.7%7.3%3.5%
3 Year14.3%-0.7%-21.9%-29.9%23.3%10.8%
5 Year52.1%21.5%-28.5%-39.3%19.2%-0.7%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Allied Group 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: 373 (HK$39.9) is trading below our estimate of fair value (HK$126.3)

Significantly Below Fair Value: 373 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 373 is good value based on its PE Ratio (4.6x) compared to the Consumer Finance industry average (6.8x).

PE vs Market: 373 is good value based on its PE Ratio (4.6x) compared to the Hong Kong market (10.5x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 373's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 373 is good value based on its PB Ratio (0.3x) compared to the HK Consumer Finance industry average (0.5x).


Next Steps

Future Growth

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

18.8%

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 Allied Group 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 Allied Group performed over the past 5 years?

9.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 373 has a large one-off gain of HK$707.1M impacting its June 30 2019 financial results.

Growing Profit Margin: 373's current net profit margins (31.3%) are lower than last year (60.8%).


Past Earnings Growth Analysis

Earnings Trend: 373's earnings have grown by 9.5% per year over the past 5 years.

Accelerating Growth: 373's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 373 had negative earnings growth (-44.9%) over the past year, making it difficult to compare to the Consumer Finance industry average (-11.1%).


Return on Equity

High ROE: 373's Return on Equity (6.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Allied Group'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: 373 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 373's debt is covered by short term assets (assets are 1.4x debt).


Financial Institutions Analysis

Asset Level: 373's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if 373 has a sufficient allowance for bad loans.

Low Risk Liabilities: 373 reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if 373 has an acceptable proportion of non-loan assets held.

Low Risk Deposits: 373 has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if 373 has an appropriate level of bad loans.


Next Steps

Dividend

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

6.23%

Current Dividend Yield


Dividend Yield vs Market

company6.2%marketbottom25%2.2%markettop25%6.1%industryaverage6.3%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: 373's dividend (6.27%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.17%).

High Dividend: 373's dividend (6.27%) is in the top 25% of dividend payers in the Hong Kong market (6.02%)


Stability and Growth of Payments

Stable Dividend: 373's dividend payments have been volatile in the past 10 years.

Growing Dividend: 373's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (29%), 373's dividend payments are well 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 Allied Group's salary, the management and board of directors tenure and is there insider trading?

3.8yrs

Average management tenure


CEO

Seng-Hui Lee (50yo)

22yrs

Tenure

HK$71,860,000

Compensation

Mr. Seng Hui Lee, LLB (Hons), has been the Chief Executive Officer of Allied Group Limited since January 1998. Mr. Lee has been the Chief Executive of Allied Properties (H.K.) Limited since June 18, 2010.  ...


CEO Compensation Analysis

Compensation vs Market: Seng-Hui's total compensation ($USD9.24M) is above average for companies of similar size in the Hong Kong market ($USD470.54K).

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


Management Age and Tenure

3.8yrs

Average Tenure

56yo

Average Age

Experienced Management: 373's management team is considered experienced (3.8 years average tenure).


Board Age and Tenure

16.8yrs

Average Tenure

58yo

Average Age

Experienced Board: 373's board of directors are seasoned and experienced ( 16.8 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

BuyHK$288,749,99417 Oct 19
Sok Un Chong
EntityIndividual
Shares7,500,000
Max PriceHK$38.50
SellHK$385,998,60516 Oct 19
Dalton Investments LLC
EntityCompany
Shares10,025,938
Max PriceHK$38.50
SellHK$1,323,59907 Mar 19
Dalton Investments LLC
EntityCompany
Shares28,000
Max PriceHK$47.27

Ownership Breakdown

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


Management Team

  • Kenneth Li (65yo)

    General Consultant

    • Tenure: 1.5yrs
  • Edwin Lo (58yo)

    Executive Director

    • Tenure: 19.7yrs
    • Compensation: HK$8.85m
  • Mark Wong (54yo)

    Director of Investment

    • Tenure: 12.3yrs
  • Seng-Hui Lee (50yo)

    CEO & Executive Director

    • Tenure: 22yrs
    • Compensation: HK$71.86m
  • Patrick Lee (67yo)

    Chief Executive of Allied Properties and Director of Allied Properties

    • Pak Mak (72yo)

      Executive Director

      • Tenure: 14yrs
      • Compensation: HK$4.13m
    • Kelvin Lam (52yo)

      Group Financial Controller

      • Tenure: 1.5yrs
    • Tung Ni Lau (37yo)

      Company Secretary

      • Tenure: 3.8yrs

    Board Members

    • Edwin Lo (58yo)

      Executive Director

      • Tenure: 19.7yrs
      • Compensation: HK$8.85m
    • Su Hwei Lee (48yo)

      Non-Executive Director

      • Tenure: 19.7yrs
      • Compensation: HK$4.57m
    • Arthur George Dew (77yo)

      Chairman of the Board

      • Tenure: 13yrs
      • Compensation: HK$4.57m
    • Seng-Hui Lee (50yo)

      CEO & Executive Director

      • Tenure: 22yrs
      • Compensation: HK$71.86m
    • David Bartlett (53yo)

      Independent Non-Executive Director

      • Tenure: 20.1yrs
      • Compensation: HK$400.00k
    • Patrick Lee (67yo)

      Chief Executive of Allied Properties and Director of Allied Properties

      • Pak Mak (72yo)

        Executive Director

        • Tenure: 14yrs
        • Compensation: HK$4.13m
      • Lisa Yang (52yo)

        Independent Non-Executive Director

        • Tenure: 6.2yrs
        • Compensation: HK$110.00k
      • Alan Jones (76yo)

        Independent Non-Executive Director

        • Tenure: 14yrs
        • Compensation: HK$800.00k

      Company Information

      Allied Group Limited's company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: Allied Group Limited
      • Ticker: 373
      • Exchange: SEHK
      • Founded:
      • Industry: Consumer Finance
      • Sector: Diversified Financials
      • Market Cap: HK$7.048b
      • Shares outstanding: 175.75m
      • Website: https://www.alliedgroup.com.hk

      Number of Employees


      Location

      • Allied Group Limited
      • Allied Kajima Building
      • 22nd Floor
      • Wanchai
      • Hong Kong

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      373SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJan 1992
      ALED.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDJan 2011

      Biography

      Allied Group Limited, an investment holding company, engages in the property investment and development, and financial service businesses in Hong Kong, Mainland China, and internationally. The company operates through Investment and Finance, Consumer Finance, Property Development and Investment, and Corporate and Other Operations segments. The Investment and Finance segment is involved in the investment activities; and provision of mortgage loan and term loan financing services. The Consumer Finance segment offers consumer loan finance products. The Property Development and Investment segment engages in the development and sale of properties; and property rental and property management activities, as well as hotel operations managed by third parties. The Corporate and Other Operations segment provides elderly care services. The company also offers property holding, securities trading, money lending, consultancy, real estate agency, investment portfolio, management, corporate, security and guarding, building management and maintenance, cleaning, secretarial, investment consultancy and advisory, investment fund, corporate marketing, financial consultancy, asset management, and loan guarantee services. In addition, it is involved in the medical equipment supplies distribution and asset holding activities. The company is based in Wanchai, Hong Kong. Allied Group Limited is a subsidiary of Lee and Lee Trust. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/22 12:32
      End of Day Share Price2020/01/21 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.