SEHK:3958

Stock Analysis Report

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Executive Summary

Orient Securities Company Limited operates as a securities company in China.


Snowflake Analysis

Unattractive dividend payer with concerning outlook.


Similar Companies

Share Price & News

How has Orient Securities's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 3958's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-3.9%

3958

0.2%

HK Capital Markets

-3.0%

HK Market


1 Year Return

-27.9%

3958

-6.6%

HK Capital Markets

-11.2%

HK Market

Return vs Industry: 3958 underperformed the Hong Kong Capital Markets industry which returned -7.7% over the past year.

Return vs Market: 3958 underperformed the Hong Kong Market which returned -11.5% over the past year.


Shareholder returns

3958IndustryMarket
7 Day-3.9%0.2%-3.0%
30 Day-4.1%4.9%-1.2%
90 Day-22.2%-8.9%-10.0%
1 Year-26.2%-27.9%-3.7%-6.6%-8.2%-11.2%
3 Year-44.0%-48.6%-22.3%-29.1%-5.5%-14.9%
5 Yearn/a-52.0%-59.0%-17.8%-30.5%

Price Volatility Vs. Market

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


Simply Wall St News

No news available

Valuation

Is Orient Securities undervalued compared to its fair value and its price relative to the market?

31.64x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 3958 (HK$3.74) is trading above our estimate of fair value (HK$1.34)

Significantly Below Fair Value: 3958 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 3958 is poor value based on its PE Ratio (31.6x) compared to the Capital Markets industry average (10.8x).

PE vs Market: 3958 is poor value based on its PE Ratio (31.6x) compared to the Hong Kong market (9.3x).


Price to Earnings Growth Ratio

PEG Ratio: 3958 is poor value based on its PEG Ratio (3.2x)


Price to Book Ratio

PB vs Industry: 3958 is overvalued based on its PB Ratio (1.2x) compared to the HK Capital Markets industry average (0.4x).


Next Steps

Future Growth

How is Orient Securities forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

9.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 3958's forecast earnings growth (9.9% per year) is above the savings rate (1.6%).

Earnings vs Market: 3958's earnings (9.9% per year) are forecast to grow slower than the Hong Kong market (16.4% per year).

High Growth Earnings: 3958's earnings are forecast to grow, but not significantly.

Revenue vs Market: 3958's revenue (5.9% per year) is forecast to grow slower than the Hong Kong market (10.3% per year).

High Growth Revenue: 3958's revenue (5.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 3958's Return on Equity is forecast to be low in 3 years time (5.4%).


Next Steps

Past Performance

How has Orient Securities performed over the past 5 years?

-27.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 3958 has a large one-off loss of CN¥892.3M impacting its March 31 2020 financial results.

Growing Profit Margin: 3958's current net profit margins (10.6%) are lower than last year (16.5%).


Past Earnings Growth Analysis

Earnings Trend: 3958's earnings have declined by -27.1% per year over the past 5 years.

Accelerating Growth: 3958's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 3958 had negative earnings growth (-4%) over the past year, making it difficult to compare to the Capital Markets industry average (-18.9%).


Return on Equity

High ROE: 3958's Return on Equity (3.7%) is considered low.


Next Steps

Financial Health

How is Orient Securities's financial position?


Financial Position Analysis

Short Term Liabilities: 3958's short term assets (CN¥113.1B) do not cover its short term liabilities (CN¥149.3B).

Long Term Liabilities: 3958's short term assets (CN¥113.1B) exceed its long term liabilities (CN¥74.0B).


Debt to Equity History and Analysis

Debt Level: 3958's debt to equity ratio (281.4%) is considered high.

Reducing Debt: 3958's debt to equity ratio has increased from 227.1% to 281.4% over the past 5 years.

Debt Coverage: 3958's debt is not well covered by operating cash flow (4.7%).

Interest Coverage: Insufficient data to determine if 3958's interest payments on its debt are well covered by EBIT.


Balance Sheet


Next Steps

Dividend

What is Orient Securities's current dividend yield, its reliability and sustainability?

1.65%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: 3958's dividend (1.65%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.59%).

High Dividend: 3958's dividend (1.65%) is low compared to the top 25% of dividend payers in the Hong Kong market (7.24%).


Stability and Growth of Payments

Stable Dividend: 3958 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 3958 has only been paying a dividend for 5 years, and since then payments have not increased.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (52.2%), 3958's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 3958's dividends in 3 years are forecast to be well covered by earnings (39.3% payout ratio).


Next Steps

Management

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

4.5yrs

Average management tenure


CEO

Wenzhong Jin (55yo)

10.17yrs

Tenure

CN¥4,928,000

Compensation

Mr. Jin Wenzhong has been the President and Executive Director of Orient Securities Company Limited since March 29,2018 and September 2010 respectively. Mr. Jin serves as the Chairman and Legal Representat ...


CEO Compensation Analysis

Compensation vs Market: Wenzhong's total compensation ($USD691.26K) is about average for companies of similar size in the Hong Kong market ($USD586.30K).

Compensation vs Earnings: Wenzhong's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Xinjun Pan
Executive Chairman of the Board10.33yrsCN¥4.93mno data
Wenzhong Jin
President & Executive Director10.17yrsCN¥4.93mno data
Jianhui Zhang
VP, CFO6yrsCN¥4.47mno data
Bin Yang
Chief Risk Officer & Chief Compliance Director4.83yrsCN¥4.73mno data
Rufu Wang
Joint Company Secretary3.5yrsCN¥2.54mno data
Yuan Yao
GM of the Compliance5.58yrsno datano data
Wing Han Leung
Joint Company Secretary4.17yrsno datano data

4.5yrs

Average Tenure

49yo

Average Age

Experienced Management: 3958's management team is considered experienced (4.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Xinjun Pan
Executive Chairman of the Board10.33yrsCN¥4.93mno data
Wenzhong Jin
President & Executive Director10.17yrsCN¥4.93mno data
Yuan Yao
GM of the Compliance5.58yrsno datano data
Anning Wei
Independent Non-Executive Director5.58yrsCN¥190.00kno data
Guo Xiang Xu
Independent Non-Executive Director5.58yrsCN¥160.00kno data
Junhao Wu
Non-Executive Director9.17yrsno datano data
Qinglu Jin
Independent Non-Executive Director2.58yrsCN¥190.00kno data
Qian Zhang
Chairman of Supervisory Committee2.17yrsno datano data
Xiang Li
Non-Executive Director5.58yrsno datano data
Xiuming Tao
Independent Non-Executive Director5.58yrsCN¥160.00kno data

5.6yrs

Average Tenure

54.5yo

Average Age

Experienced Board: 3958's board of directors are considered experienced (5.6 years average tenure).


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 not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Orient Securities Company Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Orient Securities Company Limited
  • Ticker: 3958
  • Exchange: SEHK
  • Founded: 1997
  • Industry: Investment Banking and Brokerage
  • Sector: Diversified Financials
  • Market Cap: CN¥57.748b
  • Listing Market Cap: CN¥62.828b
  • Shares outstanding: 6.99b
  • Website: https://www.dfzq.com.cn

Number of Employees


Location

  • Orient Securities Company Limited
  • Building 2
  • 22, 23 and 25-29 Floors
  • Shanghai
  • 200010
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
600958SHSE (Shanghai Stock Exchange)YesDomestic SharesCNCNYMar 2015
600958XSSC (Shanghai Stock Exchange - Shanghai - Hong Kong Stock Connect)YesDomestic SharesCNCNYMar 2015
3958SEHK (The Stock Exchange of Hong Kong Ltd.)Foreign Shares-Foreign ListedHKHKDJul 2016
OS9DB (Deutsche Boerse AG)Foreign Shares-Foreign ListedDEEURJul 2016
3958SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)Foreign Shares-Foreign ListedHKHKDJul 2016

Biography

Orient Securities Company Limited operates as a securities company in China. It operates through Securities Sales and Trading, Investment Management, Brokerage and Securities Financing, and Investment Banking segments. The company engages in securities and futures brokerage, margin financing and securities lending, securities investment advisory, securities proprietary trading, asset management, agency sale of financial products, securities underwriting and sponsorship, and other business activities. It also provides cross-border financial, fund management, fixed income, margin trading and short selling, stock pledging, over-the-counter-market, agency sale, stock options, equity innovation, and asset securitization services, as well as research, PB, and qualified foreign institutional investor services. In addition, the company offers futures investment advisory, equity and securities investment, investment management, bond and industrial investment, management consultancy, project investment, equity trading, and credit operation services. Orient Securities Company Limited was founded in 1997 and is based in Shanghai, China. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/05/25 13:31
End of Day Share Price2020/05/25 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


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.