SEHK:6066

Stock Analysis Report

Executive Summary

CSC Financial Co., Ltd., together with its subsidiaries, provides investment banking services in Mainland China and internationally.

Rewards

Trading at 16.2% below its fair value

Revenue is forecast to grow 11.51% per year

Earnings grew by 54.1% over the past year

Risk Analysis

Earnings are forecast to decline by an average of -5.6% per year for the next 3 years

High level of non-cash earnings

Unstable dividend track record

Shareholders have been diluted in the past year



Snowflake Analysis

Good value with acceptable track record.


Similar Companies

Share Price & News

How has CSC Financial's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 6066 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.1%

6066

-3.6%

HK Capital Markets

-3.7%

HK Market


1 Year Return

32.4%

6066

4.4%

HK Capital Markets

1.0%

HK Market

Return vs Industry: 6066 exceeded the Hong Kong Capital Markets industry which returned 9% over the past year.

Return vs Market: 6066 exceeded the Hong Kong Market which returned 6.4% over the past year.


Shareholder returns

6066IndustryMarket
7 Day-2.1%-3.6%-3.7%
30 Day6.8%4.0%-0.2%
90 Day24.1%9.9%4.1%
1 Year37.2%32.4%7.4%4.4%4.7%1.0%
3 Year17.3%5.1%-10.9%-18.8%20.1%7.9%
5 Yearn/a-9.3%-24.2%18.4%-1.3%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is CSC Financial undervalued compared to its fair value and its price relative to the market?

24.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 6066 (HK$7.07) is trading below our estimate of fair value (HK$8.44)

Significantly Below Fair Value: 6066 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 6066 is good value based on its PE Ratio (10.9x) compared to the Capital Markets industry average (13.9x).

PE vs Market: 6066 is good value based on its PE Ratio (9.1x) compared to the Hong Kong market (10.6x).


Price to Earnings Growth Ratio

PEG Ratio: 6066's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: 6066 is overvalued based on its PB Ratio (0.9x) compared to the HK Capital Markets industry average (0.5x).


Next Steps

Future Growth

How is CSC Financial forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

-5.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 6066's earnings are forecast to decline over the next 3 years (-5.6% per year).

Earnings vs Market: 6066's earnings are forecast to decline over the next 3 years (-5.6% per year).

High Growth Earnings: 6066's earnings are forecast to decline over the next 3 years.

Revenue vs Market: 6066's revenue (11.5% per year) is forecast to grow faster than the Hong Kong market (10.1% per year).

High Growth Revenue: 6066's revenue (9.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 6066's Return on Equity is forecast to be low in 3 years time (8.4%).


Next Steps

Past Performance

How has CSC Financial performed over the past 5 years?

-12.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 6066 has a high level of non-cash earnings.

Growing Profit Margin: 6066's current net profit margins (33.6%) are higher than last year (25.7%).


Past Earnings Growth Analysis

Earnings Trend: 6066's earnings have declined by -16.5% per year over the past 5 years.

Accelerating Growth: 6066's earnings growth over the past year (54.1%) exceeds its 5-year average (-16.5% per year).

Earnings vs Industry: 6066 earnings growth over the past year (54.1%) exceeded the Capital Markets industry -25.9%.


Return on Equity

High ROE: 6066's Return on Equity (8.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is CSC Financial'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: 6066 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 6066's debt is covered by short term assets (assets are 1.7x debt).


Financial Institutions Analysis

Asset Level: 6066's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if 6066 has a sufficient allowance for bad loans.

Low Risk Liabilities: 6066 reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if 6066 has an acceptable proportion of non-loan assets held.

Low Risk Deposits: 6066 has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if 6066 has an appropriate level of bad loans.


Next Steps

Dividend

What is CSC Financial's current dividend yield, its reliability and sustainability?

2.92%

Current Dividend Yield


Dividend Yield vs Market

company2.9%marketbottom25%2.2%markettop25%6.2%industryaverage2.8%forecastin3Years3.6%

Current dividend yield vs market & industry

Notable Dividend: 6066's dividend (2.87%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.17%).

High Dividend: 6066's dividend (2.87%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.02%).


Stability and Growth of Payments

Stable Dividend: 6066 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 6066 has only been paying a dividend for 3 years, and since then payments have not increased.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (31.4%), 6066's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 6066's dividends in 3 years are forecast to be well covered by earnings (32.8% payout ratio).


Next Steps

Management

What is the CEO of CSC Financial's salary, the management and board of directors tenure and is there insider trading?

7.1yrs

Average management tenure


CEO

Guangxue Wang (47yo)

6yrs

Tenure

CN¥5,851,200

Compensation

Mr. Guangxue Wang has been Chief Executive Officer and Secretary of the Board of Directors at CSC Financial Co., Ltd since January 2014. Mr. Wang was Administrative Head of Executive Office and Secretary a ...


Management Age and Tenure

7.1yrs

Average Tenure

48yo

Average Age

Experienced Management: 6066's management team is seasoned and experienced (7.1 years average tenure).


Board Age and Tenure

2.7yrs

Average Tenure

54yo

Average Age

Experienced Board: 6066's board of directors are not considered experienced ( 2.7 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5.9%.


Management Team

  • Changqing Wang (56yo)

    Chairman

    • Tenure: 1.8yrs
    • Compensation: CN¥7.94m
  • Ya Lu (53yo)

    Chief Risk Officer

    • Guangxue Wang (47yo)

      CEO & Secretary

      • Tenure: 6yrs
      • Compensation: CN¥5.85m
    • Xiaoyu Zhou (55yo)

      Administrative Head of Human Resources Department

      • Tenure: 8.2yrs
    • Naisheng Liu (48yo)

      Administrative Head of Investment Banking Department

      • Tenure: 8.8yrs
    • Ling Huang (43yo)

      Administrative Head of Debt Underwriting Department

      • Tenure: 11.7yrs
    • Geping Li (52yo)

      CFO, GM & Executive Director

      • Tenure: 1.8yrs
      • Compensation: CN¥1.84m
    • Yi Lin (47yo)

      Employee Representative Supervisor & Administrative Head of Internal Audit Department

      • Tenure: 1.8yrs
    • Ming Zhao (48yo)

      Administrative Head of Financial Planning Department & Employee Representative Supervisor

      • Tenure: 0.8yrs
    • Jianqiang Ding

      Chief Compliance Officer

      • Tenure: 0.8yrs

    Board Members

    • Genfu Feng (62yo)

      Independent Non-Executive Director

      • Tenure: 4.8yrs
      • Compensation: CN¥230.00k
    • Zhongfu Yu (49yo)

      Vice Chairman

      • Tenure: 3.4yrs
    • Jianjun Bai (64yo)

      Independent Non-Executive Director

      • Tenure: 3.4yrs
      • Compensation: CN¥230.00k
    • Changqing Wang (56yo)

      Chairman

      • Tenure: 1.8yrs
      • Compensation: CN¥7.94m
    • Deming Dai (57yo)

      Independent Non-Executive Director

      • Tenure: 3.4yrs
      • Compensation: CN¥230.00k
    • Shihua Li (60yo)

      Chairman of Supervisory Board

      • Tenure: 5.8yrs
    • Hao Wang (51yo)

      Non-Executive Director

      • Tenure: 2yrs
    • Geping Li (52yo)

      CFO, GM & Executive Director

      • Tenure: 1.8yrs
      • Compensation: CN¥1.84m
    • Yi Lin (47yo)

      Employee Representative Supervisor & Administrative Head of Internal Audit Department

      • Tenure: 1.8yrs
    • Ming Zhao (48yo)

      Administrative Head of Financial Planning Department & Employee Representative Supervisor

      • Tenure: 0.8yrs

    Company Information

    CSC Financial Co., Ltd.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: CSC Financial Co., Ltd.
    • Ticker: 6066
    • Exchange: SEHK
    • Founded: 2005
    • Industry: Investment Banking and Brokerage
    • Sector: Diversified Financials
    • Market Cap: HK$260.024b
    • Shares outstanding: 7.65b
    • Website: https://www.csc108.com

    Number of Employees


    Location

    • CSC Financial Co., Ltd.
    • No. 188 Chaonei Avenue
    • Dongcheng District
    • Beijing
    • 100010
    • China

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    6066SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares-Foreign ListedHKHKDDec 2016
    CS0DB (Deutsche Boerse AG)YesForeign Shares-Foreign ListedDEEURDec 2016
    6066SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDDec 2016
    6066SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDDec 2016
    601066SHSE (Shanghai Stock Exchange)Domestic SharesCNCNYJun 2018
    601066XSSC (Shanghai Stock Exchange - Shanghai - Hong Kong Stock Connect)Domestic SharesCNCNYJun 2018

    Biography

    CSC Financial Co., Ltd., together with its subsidiaries, provides investment banking services in Mainland China and internationally. The company operates through four segments: Investment Banking, Wealth Management, Trading and Institutional Client Services, and Investment Management. The Investment Banking segment offers a range of investment banking services, including financial advisory, sponsoring, and underwriting of equity and debt securities. The Wealth Management segment provides brokerage agency services for corporate and personal clients in the trading of equity stocks, funds, bonds, and futures, as well as margin financing and securities lending services. The Trading and Institutional Client Services segment trades in financial products; and offers brokerage agency services for financial institutions in the trading of equity stocks, funds, and bonds, as well as margin financing and securities lending services. This segment also provides services in relation to the sale of financial products to institutional clients, and specialized research and advisory services to assist their investment decision-making. The Investment Management segment develops asset management products, fund management products services, and private placement offerings; and provides related services. The company was formerly known as China Securities Finance Co., Ltd. and changed its name to CSC Financial Co., Ltd. in October 2016. CSC Financial Co., Ltd. was founded in 2005 and is based in Beijing, China. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/23 13:12
    End of Day Share Price2020/01/23 00:00
    Earnings2019/12/31
    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.