SHSC:86

Stock Analysis Report

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Executive Summary

Sun Hung Kai & Co. Limited, an investment holding company, provides financial services in Hong Kong and Mainland China. More Details


Snowflake Analysis

Very undervalued with proven track record and pays a dividend.


Similar Companies

Share Price & News

How has Sun Hung Kai's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 86 is less volatile than 75% of Hong Kong stocks over the past 3 months, typically moving +/- 2% a week.

Volatility Over Time: 86's weekly volatility (2%) has been stable over the past year.


Market Performance


7 Day Return

1.8%

86

0.5%

HK Consumer Finance

-3.5%

HK Market


1 Year Return

-5.3%

86

21.8%

HK Consumer Finance

19.4%

HK Market

Return vs Industry: 86 underperformed the Hong Kong Consumer Finance industry which returned 21.8% over the past year.

Return vs Market: 86 underperformed the Hong Kong Market which returned 19.4% over the past year.


Shareholder returns

86IndustryMarket
7 Day1.8%0.5%-3.5%
30 Day5.0%7.3%-0.7%
90 Day-2.6%15.1%10.8%
1 Year2.9%-5.3%25.5%21.8%24.0%19.4%
3 Year-17.8%-33.5%-25.2%-29.9%5.5%-5.4%
5 Year2.2%-25.8%-16.6%-29.4%64.0%36.2%

Long-Term Price Volatility Vs. Market

How volatile is Sun Hung Kai's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Sun Hung Kai undervalued compared to its fair value and its price relative to the market?

41.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 86 (HK$3.39) is trading below our estimate of fair value (HK$5.84)

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


Price To Earnings Ratio

PE vs Industry: 86 is good value based on its PE Ratio (3.9x) compared to the HK Consumer Finance industry average (7.1x).

PE vs Market: 86 is good value based on its PE Ratio (3.9x) compared to the Hong Kong market (12x).


Price to Earnings Growth Ratio

PEG Ratio: 86 is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: 86 is good value based on its PB Ratio (0.3x) compared to the HK Consumer Finance industry average (0.6x).


Next Steps

Future Growth

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

8.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 86's forecast earnings growth (8.6% per year) is above the savings rate (1.5%).

Earnings vs Market: 86's earnings (8.6% per year) are forecast to grow slower than the Hong Kong market (21.2% per year).

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

Revenue vs Market: 86's revenue (13.3% per year) is forecast to grow slower than the Hong Kong market (13.5% per year).

High Growth Revenue: 86's revenue (13.3% 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 (9.1%).


Next Steps

Past Performance

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

17.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 86 has a large one-off gain of HK$1.2B impacting its June 30 2020 financial results.

Growing Profit Margin: 86's current net profit margins (74.9%) are higher than last year (45.4%).


Past Earnings Growth Analysis

Earnings Trend: 86's earnings have grown by 17.4% per year over the past 5 years.

Accelerating Growth: 86's earnings growth over the past year (51%) exceeds its 5-year average (17.4% per year).

Earnings vs Industry: 86 earnings growth over the past year (51%) exceeded the Consumer Finance industry -23.2%.


Return on Equity

High ROE: 86's Return on Equity (9%) is considered low.


Next Steps

Financial Health

How is Sun Hung Kai's financial position?


Financial Position Analysis

Short Term Liabilities: 86's short term assets (HK$27.3B) exceed its short term liabilities (HK$10.5B).

Long Term Liabilities: 86's short term assets (HK$27.3B) exceed its long term liabilities (HK$8.8B).


Debt to Equity History and Analysis

Debt Level: 86's debt to equity ratio (75.7%) is considered high.

Reducing Debt: 86's debt to equity ratio has increased from 44.7% to 75.7% over the past 5 years.

Debt Coverage: 86's debt is not well covered by operating cash flow (16.2%).

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


Balance Sheet


Next Steps

Dividend

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

7.67%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 86's dividend (7.67%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.02%).

High Dividend: 86's dividend (7.67%) is in the top 25% of dividend payers in the Hong Kong market (6.26%)


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.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (29.6%), 86's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 86's dividends in 3 years are forecast to be well covered by earnings (21.7% payout ratio).


Next Steps

Management

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

4.5yrs

Average management tenure


CEO

Seng Huang Lee (46 yo)

14.17yrs

Tenure

HK$58,890,000

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 ($USD7.59M) is above average for companies of similar size in the Hong Kong market ($USD402.46K).

Compensation vs Earnings: Seng Huang's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Seng Huang Lee
Group Executive Chairman & CEO14.17yrsHK$58.89mno data
Wing Charn Chow
Group Deputy CEO & Executive Director5.75yrsHK$8.69m0.027%
HK$ 1.8m
Robert James Quinlivan
Group Chief Financial Officer2.5yrsno datano data
Sai Kit Leung
Head of Operationsno datano datano data
Sebastiaan Cornelis Van Den Berg
Chief Investment Officer & Head of Principal Investments4.5yrsno datano data
Chee Chung Kwok
Chief Accountantno datano datano data
Kar Kui Chan
CTO & Head of Information Technology Departmentno datano datano data
Wong Wei Mei
Head of Administration Departmentno datano datano data
Joseph Fuqua
Head of Investor Relationsno datano datano data
Mei Chun Yeung
Head of Internal Audit & Compliance17.25yrsno datano data
Sabrina Y.T. Maguire
Head of Legal2.17yrsno datano data
Chun Li
Group Treasurer & Head of Corporate Development3.83yrsno datano data

4.5yrs

Average Tenure

53yo

Average Age

Experienced Management: 86's management team is considered experienced (4.5 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Seng Huang Lee
Group Executive Chairman & CEO14.17yrsHK$58.89mno data
Wing Charn Chow
Group Deputy CEO & Executive Director5.75yrsHK$8.69m0.027%
HK$ 1.8m
Wilhelm Soeharsono Budihardjo
MD of Futuresno datano datano data
Jonathan Andrew Cimino
Non-Executive Director5.17yrsHK$20.00kno data
David Craig Bartlett
Independent Non-Executive Director21.33yrsHK$250.00kno data
Peter Anthony Curry
Non-Executive Director10.17yrsHK$250.00k0.063%
HK$ 4.2m
Alan Stephen Jones
Independent Non-Executive Director15.17yrsHK$310.00kno data
Chi Chun Au Yang
Independent Non Executive Director3yrsHK$250.00kno data
Alee Leung
Independent Non-Executive Director6.33yrsHK$250.00kno data

8.3yrs

Average Tenure

60yo

Average Age

Experienced Board: 86's board of directors are considered experienced (8.3 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

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


Key Information

  • Name: Sun Hung Kai & Co. Limited
  • Ticker: 86
  • Exchange: SHSC
  • Founded: 1969
  • Industry: Consumer Finance
  • Sector: Diversified Financials
  • Market Cap: HK$6.720b
  • Shares outstanding: 1.98b
  • Website: https://www.shkco.com

Number of Employees


Location

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

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
86SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJan 1992
SHKBST (Boerse-Stuttgart)YesOrdinary SharesDEEURJan 1992
86SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJan 1992
86SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJan 1992

Biography

Sun Hung Kai & Co. Limited, an investment holding company, provides financial services in Hong Kong and Mainland China. It operates through Consumer Finance, Mortgage Loans, Specialty Finance, Investment M...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/03/05 10:31
End of Day Share Price2021/03/04 00:00
Earnings2020/06/30
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.