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86

Sun Hung Kai SEHK:86 Stock Report

Last Price

HK$3.65

Market Cap

HK$7.1b

7D

1.1%

1Y

-13.5%

Updated

27 Jun, 2022

Data

Company Financials +
86 fundamental analysis
Snowflake Score
Valuation6/6
Future Growth1/6
Past Performance2/6
Financial Health3/6
Dividends2/6

86 Stock Overview

Sun Hung Kai & Co. Limited, an investment holding company, provides financial services in Hong Kong and the People’s Republic of China.

Sun Hung Kai Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Sun Hung Kai
Historical stock prices
Current Share PriceHK$3.65
52 Week HighHK$5.04
52 Week LowHK$3.57
Beta0.65
1 Month Change-3.18%
3 Month Change-7.12%
1 Year Change-13.51%
3 Year Change0%
5 Year Change-28.15%
Change since IPO86.40%

Recent News & Updates

May 18
Is Now The Time To Put Sun Hung Kai (HKG:86) On Your Watchlist?

Is Now The Time To Put Sun Hung Kai (HKG:86) On Your Watchlist?

It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks...

Shareholder Returns

86HK Consumer FinanceHK Market
7D1.1%4.3%2.1%
1Y-13.5%-14.8%-23.3%

Return vs Industry: 86 exceeded the Hong Kong Consumer Finance industry which returned -14.8% over the past year.

Return vs Market: 86 exceeded the Hong Kong Market which returned -23.3% over the past year.

Price Volatility

Is 86's price volatile compared to industry and market?
86 volatility
86 Average Weekly Movement3.0%
Consumer Finance Industry Average Movement8.2%
Market Average Movement7.0%
10% most volatile stocks in HK Market13.8%
10% least volatile stocks in HK Market3.3%

Stable Share Price: 86 is less volatile than 75% of Hong Kong stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: 86's weekly volatility (3%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
19691,738Seng Huang Leehttps://www.shkco.com

Sun Hung Kai & Co. Limited, an investment holding company, provides financial services in Hong Kong and the People’s Republic of China. The company operates through Consumer Finance, Private Credit, Mortgage Loans, Investment Management, and Group Management and Support segments. It offers unsecured loan to individuals and businesses through branches and online platforms; funding solutions to corporates, investment funds, and high net worth individuals; and first mortgage and second mortgage loans to property owners, as well as customized financing solutions to property investors.

Sun Hung Kai Fundamentals Summary

How do Sun Hung Kai's earnings and revenue compare to its market cap?
86 fundamental statistics
Market CapHK$7.12b
Earnings (TTM)HK$2.81b
Revenue (TTM)HK$3.00b

2.6x

P/E Ratio

2.4x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
86 income statement (TTM)
RevenueHK$3.00b
Cost of RevenueHK$243.90m
Gross ProfitHK$2.76b
Other Expenses-HK$54.90m
EarningsHK$2.81b

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)1.43
Gross Margin91.88%
Net Profit Margin93.71%
Debt/Equity Ratio65.0%

How did 86 perform over the long term?

See historical performance and comparison

Dividends

7.1%

Current Dividend Yield

18%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is 86 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 86?

Other financial metrics that can be useful for relative valuation.

86 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenuen/a
Enterprise Value/EBITDAn/a
PEG Ratio0.2x

Price to Earnings Ratio vs Peers

How does 86's PE Ratio compare to its peers?

86 PE Ratio vs Peers
The above table shows the PE ratio for 86 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average73.5x
373 Allied Group
1.3xn/aHK$8.7b
1543 Guangdong Join-Share Financing Guarantee Investment
29.2xn/aHK$3.0b
2858 Yixin Group
234.7xn/aHK$8.2b
6878 Differ Group Holding
28.7xn/aHK$14.8b
86 Sun Hung Kai
2.6x14.9%HK$7.1b

Price-To-Earnings vs Peers: 86 is good value based on its Price-To-Earnings Ratio (2.6x) compared to the peer average (73.5x).


Price to Earnings Ratio vs Industry

How does 86's PE Ratio compare vs other companies in the Asian Consumer Finance Industry?

Price-To-Earnings vs Industry: 86 is good value based on its Price-To-Earnings Ratio (2.6x) compared to the Hong Kong Consumer Finance industry average (7.7x)


Price to Earnings Ratio vs Fair Ratio

What is 86's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

86 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio2.6x
Fair PE Ratio5.9x

Price-To-Earnings vs Fair Ratio: 86 is good value based on its Price-To-Earnings Ratio (2.6x) compared to the estimated Fair Price-To-Earnings Ratio (5.9x).


Share Price vs Fair Value

What is the Fair Price of 86 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 86 (HK$3.65) is trading below our estimate of fair value (HK$15.89)

Significantly Below Fair Value: 86 is trading below fair value by more than 20%.


Price to Earnings Growth Ratio

PEG Ratio: 86 is good value based on its PEG Ratio (0.2x)


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Future Growth

How is Sun Hung Kai forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


14.9%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 86's forecast earnings growth (14.9% per year) is above the savings rate (1.5%).

Earnings vs Market: 86's earnings (14.9% per year) are forecast to grow slower than the Hong Kong market (16.9% per year).

High Growth Earnings: 86's earnings are forecast to grow, but not significantly.

Revenue vs Market: 86's revenue (8.7% per year) is forecast to grow slower than the Hong Kong market (10.3% per year).

High Growth Revenue: 86's revenue (8.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 86's Return on Equity is forecast to be low in 3 years time (12%).


Discover growth companies

Past Performance

How has Sun Hung Kai performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


20.3%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 86 has a large one-off gain of HK$2.6B impacting its December 31 2021 financial results.

Growing Profit Margin: 86's current net profit margins (93.7%) are lower than last year .


Past Earnings Growth Analysis

Earnings Trend: 86's earnings have grown significantly by 20.3% per year over the past 5 years.

Accelerating Growth: 86's earnings growth over the past year (10.4%) is below its 5-year average (20.3% per year).

Earnings vs Industry: 86 earnings growth over the past year (10.4%) exceeded the Consumer Finance industry 2.4%.


Return on Equity

High ROE: 86's Return on Equity (11.6%) is considered low.


Discover strong past performing companies

Financial Health

How is Sun Hung Kai's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: 86's short term assets (HK$29.9B) exceed its short term liabilities (HK$12.2B).

Long Term Liabilities: 86's short term assets (HK$29.9B) exceed its long term liabilities (HK$8.1B).


Debt to Equity History and Analysis

Debt Level: 86's net debt to equity ratio (20.4%) is considered satisfactory.

Reducing Debt: 86's debt to equity ratio has increased from 46.9% to 65% over the past 5 years.

Debt Coverage: 86's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: Insufficient data to determine if 86's interest payments on its debt are well covered by EBIT.


Balance Sheet


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Dividend

What is Sun Hung Kai current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Future Dividend Coverage


7.12%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 86's dividend (7.12%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.75%).

High Dividend: 86's dividend (7.12%) is low compared to the top 25% of dividend payers in the Hong Kong market (7.9%).


Stability and Growth of Payments

Stable Dividend: 86's dividend payments have been volatile in the past 10 years.

Growing Dividend: 86's dividend payments have fallen over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (18.2%), 86's dividend payments are well covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: 86 is paying a dividend but the company has no free cash flows.


Discover strong dividend paying companies

Management

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

6.6yrs

Average management tenure


CEO

Seng Huang Lee (47 yo)

15.42yrs

Tenure

HK$75,580,000

Compensation

Mr. Seng Huang Lee has been the Non-Independent Executive Chairman at Mulpha Australia Limited since December 2003. He serves as Strategic Advisor at ClearVue Partners. Mr. Lee has been the Group Executive...


CEO Compensation Analysis

Compensation vs Market: Seng Huang's total compensation ($USD9.63M) is above average for companies of similar size in the Hong Kong market ($USD552.08K).

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


Leadership Team

Experienced Management: 86's management team is seasoned and experienced (6.6 years average tenure).


Board Members

Experienced Board: 86's board of directors are considered experienced (7.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: 86 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

Sun Hung Kai & Co. Limited's employee growth, exchange listings and data sources


Key Information

  • Name: Sun Hung Kai & Co. Limited
  • Ticker: 86
  • Exchange: SEHK
  • Founded: 1969
  • Industry: Consumer Finance
  • Sector: Diversified Financials
  • Implied Market Cap: HK$7.118b
  • Shares outstanding: 1.97b
  • Website: https://www.shkco.com

Number of Employees


Location

  • Sun Hung Kai & Co. Limited
  • Lee Garden One
  • 42nd Floor
  • Causeway Bay
  • Hong Kong

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/06/27 00:00
End of Day Share Price2022/06/27 00:00
Earnings2021/12/31
Annual Earnings2021/12/31


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.