SEHK:6866

Stock Analysis Report

Zuoli Kechuang Micro-finance

Executive Summary

Zuoli Kechuang Micro-finance Company Limited operates as a microfinance company in the People’s Republic of China.


Snowflake Analysis

Undervalued with questionable track record.

Share Price & News

How has Zuoli Kechuang Micro-finance's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 6866 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.1%

6866

-1.0%

HK Consumer Finance

-2.1%

HK Market


1 Year Return

15.2%

6866

-32.5%

HK Consumer Finance

-9.8%

HK Market

Return vs Industry: 6866 exceeded the Hong Kong Consumer Finance industry which returned -30.4% over the past year.

Return vs Market: 6866 exceeded the Hong Kong Market which returned -10.2% over the past year.


Shareholder returns

6866IndustryMarket
7 Day-1.1%-1.0%-2.1%
30 Day-3.2%-2.8%-3.2%
90 Day1.1%-8.0%0.09%
1 Year50.2%15.2%-31.0%-32.5%-6.5%-9.8%
3 Year-45.6%-58.3%-27.1%-34.6%11.6%0.3%
5 Year-53.7%-68.6%-30.9%-41.6%11.7%-6.8%

Price Volatility Vs. Market

How volatile is Zuoli Kechuang Micro-finance's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Zuoli Kechuang Micro-finance 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: 6866 (HK$0.46) is trading below our estimate of fair value (HK$1.51)

Significantly Below Fair Value: 6866 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 6866 is good value based on its PE Ratio (3.6x) compared to the Consumer Finance industry average (6.5x).

PE vs Market: 6866 is good value based on its PE Ratio (3.6x) compared to the Hong Kong market (9.9x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 6866's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 6866 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 Zuoli Kechuang Micro-finance forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

17.1%

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 Zuoli Kechuang Micro-finance 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 Zuoli Kechuang Micro-finance performed over the past 5 years?

8.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 6866 has high quality earnings.

Growing Profit Margin: 6866's current net profit margins (56.9%) are lower than last year (58.1%).


Past Earnings Growth Analysis

Earnings Trend: 6866's earnings have grown by 8.3% per year over the past 5 years.

Accelerating Growth: 6866's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 6866 had negative earnings growth (-14.9%) over the past year, making it difficult to compare to the Consumer Finance industry average (-11.1%).


Return on Equity

High ROE: 6866's Return on Equity (8.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Zuoli Kechuang Micro-finance'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: 6866 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 6866's debt is covered by short term assets (assets are 4x debt).


Financial Institutions Analysis

Asset Level: 6866's level of assets compared to its equity is low.

Allowance for Bad Loans: Insufficient data to determine if 6866 has a sufficient allowance for bad loans.

Low Risk Liabilities: 6866 reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if 6866 has an acceptable proportion of non-loan assets held.

Low Risk Deposits: 6866 has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if 6866 has an appropriate level of bad loans.


Next Steps

Dividend

What is Zuoli Kechuang Micro-finance's current dividend yield, its reliability and sustainability?

30.51%

Current Dividend Yield


Dividend Yield vs Market

company30.5%marketbottom25%2.3%markettop25%6.4%industryaverage6.5%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: 6866's dividend (30.47%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.3%).

High Dividend: 6866's dividend (30.47%) is in the top 25% of dividend payers in the Hong Kong market (6.4%)


Stability and Growth of Payments

Stable Dividend: 6866 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 6866 has only been paying a dividend for 4 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (109.9%), 6866's dividend payments are not 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

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

3.9yrs

Average management tenure


CEO

Sheng Yang (44yo)

1.4yrs

Tenure

CN¥390,000

Compensation

Mr. Sheng Yang has been General Manager of Zuoli Kechuang Micro-Finance Company Limited since September 3, 2018, mainly responsible for its business management. Mr. Yang has been Executive Director & Vice  ...


CEO Compensation Analysis

Compensation vs Market: Sheng's total compensation ($USD55.48K) is below average for companies of similar size in the Hong Kong market ($USD226.90K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Yin Yu
Chairman of the Board0yrsCN¥510.00k7.46% CN¥40.0m
Sheng Yang
GM & Vice Chairman1.4yrsCN¥390.00kno data
Xuegen Zheng
Vice Chairman0yrsCN¥391.00k0.25% CN¥1.4m
Fangfang Hu
Chief Financial Controller & Executive Director0.7yrsno datano data
Wing Yan Ho
Company Secretary3.9yrsno datano data

3.9yrs

Average Tenure

38yo

Average Age

Experienced Management: 6866's management team is considered experienced (3.9 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Yin Yu
Chairman of the Board0yrsCN¥510.00k7.46% CN¥40.0m
Sheng Yang
GM & Vice Chairman1.4yrsCN¥390.00kno data
Xuegen Zheng
Vice Chairman0yrsCN¥391.00k0.25% CN¥1.4m
Fangfang Hu
Chief Financial Controller & Executive Director0.7yrsno datano data
Yuk Ming Ho
Independent Non-Executive Director5.8yrsCN¥100.00kno data
Xuejun Jin
Independent Non-Executive Director5.8yrsCN¥100.00kno data
Zhongmin Pan
Non-Executive Director5.5yrsCN¥6.00k1.0% CN¥5.4m
Lianxi Huang
Independent Non-Executive Director5.8yrsCN¥100.00kno data
Shengqing Dai
Chairman of the Board of Supervisor1.8yrsno datano data
Peijun Wang
Supervisor5.5yrsno datano data

5.5yrs

Average Tenure

46yo

Average Age

Experienced Board: 6866's board of directors are considered experienced (5.5 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.


Ownership Breakdown

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


Top Shareholders

Company Information

Zuoli Kechuang Micro-finance Company Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Zuoli Kechuang Micro-finance Company Limited
  • Ticker: 6866
  • Exchange: SEHK
  • Founded: 2011
  • Industry: Consumer Finance
  • Sector: Diversified Financials
  • Market Cap: HK$536.900m
  • Shares outstanding: 1.18b
  • Website: https://www.zlkcxd.cn

Number of Employees


Location

  • Zuoli Kechuang Micro-finance Company Limited
  • No. 399 Deqing Avenue
  • Wukang Road
  • Huzhou
  • Zhejiang Province
  • 313200
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
6866SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares-Foreign ListedHKHKDJan 2015

Biography

Zuoli Kechuang Micro-finance Company Limited operates as a microfinance company in the People’s Republic of China. The company offers unsecured, guaranteed, collateralized, and pledged loans; enterprise loans, including agriculture loans and technology enterprises credit loans, as well as loans for other small and medium-sized enterprises (SMEs), and microenterprises; individual loans, such as individual business, consumption, start-up, and other loans; and fast and zhang shang tong loans. It serves customers engaged in agricultural businesses and rural development activities; customers residing in rural areas; and SMEs and microenterprises, as well as online retailers for lifestyle products, agricultural products, cultural supplies and industrial products. The company was formerly known as Deqing Zuoli Kechuang Micro-finance Company Limited and changed its name to Zuoli Kechuang Micro-Finance Company Limited in April 2014. Zuoli Kechuang Micro-finance Company Limited was founded in 2011 and is headquartered in Huzhou, the People’s Republic of China. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/26 13:16
End of Day Share Price2020/02/26 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.