SEHK:1088

Stock Analysis Report

China Shenhua Energy

Executive Summary

China Shenhua Energy Company Limited, together with its subsidiaries, engages in coal, power, railway, port, shipping, and coal chemical businesses in the People’s Republic of China and internationally.


Snowflake Analysis

Flawless balance sheet established dividend payer.


Similar Companies

Share Price & News

How has China Shenhua Energy's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 1088 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.3%

1088

-1.4%

HK Oil and Gas

-0.6%

HK Market


1 Year Return

-28.0%

1088

-31.2%

HK Oil and Gas

-7.4%

HK Market

Return vs Industry: 1088 exceeded the Hong Kong Oil and Gas industry which returned -31.2% over the past year.

Return vs Market: 1088 underperformed the Hong Kong Market which returned -7.4% over the past year.


Shareholder returns

1088IndustryMarket
7 Day-3.3%-1.4%-0.6%
30 Day-4.9%-9.1%-3.2%
90 Day-6.8%-5.1%3.1%
1 Year-23.5%-28.0%-27.1%-31.2%-4.1%-7.4%
3 Year17.8%-13.5%-16.8%-28.5%13.5%2.0%
5 Year1.8%-30.6%-32.9%-45.0%13.8%-5.1%

Price Volatility Vs. Market

How volatile is China Shenhua Energy's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is China Shenhua Energy 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: 1088 (HK$14.08) is trading below our estimate of fair value (HK$32.98)

Significantly Below Fair Value: 1088 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 1088 is good value based on its PE Ratio (5.9x) compared to the Oil and Gas industry average (6.3x).

PE vs Market: 1088 is good value based on its PE Ratio (5.9x) compared to the Hong Kong market (10.1x).


Price to Earnings Growth Ratio

PEG Ratio: 1088's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: 1088 is overvalued based on its PB Ratio (0.7x) compared to the HK Oil and Gas industry average (0.7x).


Next Steps

Future Growth

How is China Shenhua Energy forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

-5.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1088's earnings are forecast to decline over the next 3 years (-5% per year).

Earnings vs Market: 1088's earnings are forecast to decline over the next 3 years (-5% per year).

High Growth Earnings: 1088's earnings are forecast to decline over the next 3 years.

Revenue vs Market: 1088's revenue is expected to decline over the next 3 years (-2.8% per year).

High Growth Revenue: 1088's revenue is forecast to decline over the next 3 years (-2.8% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 1088's Return on Equity is forecast to be low in 3 years time (9.2%).


Next Steps

Past Performance

How has China Shenhua Energy performed over the past 5 years?

11.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1088 has high quality earnings.

Growing Profit Margin: 1088's current net profit margins (17.4%) are lower than last year (17.8%).


Past Earnings Growth Analysis

Earnings Trend: 1088's earnings have grown by 11.6% per year over the past 5 years.

Accelerating Growth: 1088's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 1088 had negative earnings growth (-6.9%) over the past year, making it difficult to compare to the Oil and Gas industry average (11.7%).


Return on Equity

High ROE: 1088's Return on Equity (12.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is China Shenhua Energy's financial position?


Financial Position Analysis

Short Term Liabilities: 1088's short term assets (CN¥176.2B) exceed its short term liabilities (CN¥96.1B).

Long Term Liabilities: 1088's short term assets (CN¥176.2B) exceed its long term liabilities (CN¥50.0B).


Debt to Equity History and Analysis

Debt Level: 1088's debt to equity ratio (12.1%) is considered satisfactory.

Reducing Debt: 1088's debt to equity ratio has reduced from 30.4% to 12.1% over the past 5 years.

Debt Coverage: 1088's debt is well covered by operating cash flow (151.9%).

Interest Coverage: 1088's interest payments on its debt are well covered by EBIT (36.9x coverage).


Balance Sheet

Inventory Level: 1088 has a high level of physical assets or inventory.

Debt Coverage by Assets: 1088's debt is covered by short term assets (assets are 3.5x debt).


Next Steps

Dividend

What is China Shenhua Energy's current dividend yield, its reliability and sustainability?

6.92%

Current Dividend Yield


Dividend Yield vs Market

company6.9%marketbottom25%2.3%markettop25%6.3%industryaverage6.8%forecastin3Years6.5%

Current dividend yield vs market & industry

Notable Dividend: 1088's dividend (6.92%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.29%).

High Dividend: 1088's dividend (6.92%) is in the top 25% of dividend payers in the Hong Kong market (6.35%)


Stability and Growth of Payments

Stable Dividend: 1088's dividend payments have been volatile in the past 10 years.

Growing Dividend: 1088's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (40.5%), 1088's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 1088's dividends in 3 years are forecast to be well covered by earnings (37.9% payout ratio).


Next Steps

Management

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

1.5yrs

Average management tenure


CEO

Jiping Yang (49yo)

0.5yrs

Tenure

0

Mr. Jiping Yang has been Chief Executive Officer of China Shenhua Energy Company Limited since August 23, 2019. Mr. Yang is a professor-level senior and a member of the Communist Party. Mr. Yang has extens ...


Leadership Team

NamePositionTenureCompensationOwnership
Shancheng Xu
Chief Financial Officer1.2yrsno datano data
Dong Li
Executive Director3.7yrsno datano data
Song Gao
Executive Director1.8yrsno datano data
Shuhua Mi
Executive Director1.8yrsno datano data
Qing Huang
Secretary to the Board15.3yrsCN¥1.15mno data
Xiangxi Wang
Executive Chairman0.7yrsno datano data
Jiping Yang
Chief Executive Officer0.5yrsno datano data
Yongfeng Zhao
Executive Vice President0.5yrsno datano data
Xingzhong Wang
Executive Vice President0.2yrsno datano data

1.5yrs

Average Tenure

55yo

Average Age

Experienced Management: 1088's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Dong Li
Executive Director3.7yrsno datano data
Song Gao
Executive Director1.8yrsno datano data
Shuhua Mi
Executive Director1.8yrsno datano data
Xiangxi Wang
Executive Chairman0.7yrsno datano data
Wai Chu Tam
Independent Non-Executive Director2.7yrsCN¥450.00kno data
Jibin Zhao
Non-Executive Director3.7yrsno datano data
Bo Jiang
Independent Non-Executive Director2.7yrsCN¥450.00kno data
Yingjie Zhong
Independent Non-Executive Director2.7yrsCN¥450.00kno data
Dayu Zhou
Shareholders Representative Supervisor3.7yrsno datano data
Suping Peng
Independent Non-Executive Director1.8yrsCN¥263.00kno data

2.7yrs

Average Tenure

58yo

Average Age

Experienced Board: 1088's board of directors are not considered experienced ( 2.7 years average tenure), which suggests a new board.


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

China Shenhua Energy Company Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: China Shenhua Energy Company Limited
  • Ticker: 1088
  • Exchange: SEHK
  • Founded: 2004
  • Industry: Coal and Consumable Fuels
  • Sector: Energy
  • Market Cap: HK$353.723b
  • Shares outstanding: 19.89b
  • Website: https://www.csec.com

Number of Employees


Location

  • China Shenhua Energy Company Limited
  • 22 Andingmen Xibinhe Road
  • Dongcheng District
  • Beijing
  • 100011
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1088SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares-Foreign ListedHKHKDJun 2005
IKFDB (Deutsche Boerse AG)YesForeign Shares-Foreign ListedDEEURJun 2005
CUAE.FOTCPK (Pink Sheets LLC)YesForeign Shares-Foreign ListedUSUSDJun 2005
1088SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDJun 2005
1088SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDJun 2005
601088SHSE (Shanghai Stock Exchange)Domestic SharesCNCNYOct 2007
601088XSSC (Shanghai Stock Exchange - Shanghai - Hong Kong Stock Connect)Domestic SharesCNCNYOct 2007
CSUA.YOTCPK (Pink Sheets LLC)ADRUSUSDOct 2008

Biography

China Shenhua Energy Company Limited, together with its subsidiaries, engages in coal, power, railway, port, shipping, and coal chemical businesses in the People’s Republic of China and internationally. The company’s Coal segment produces coal from surface and underground mines; and sells coal to power plants, metallurgical and coal chemical producers, and provincial/regional electric grid companies. As of December 31, 2018, this segment had the recoverable coal reserves of 14.95 billion tones. Its Power segment generates and sells electric power to power grid companies. This segment generates electric power through coal, thermal, wind, water, and gas. The company’s Railway segment provides railway transportation services. Its Port segment offers loading, transportation, and storage services. The company’s Shipping segment provides shipment transportation services. Its Coal Chemical segment produces and sells methanol; and polyethylene and polypropylene, as well as other by-products. The company was founded in 2004 and is based in Beijing, China. China Shenhua Energy Company Limited is a subsidiary of Shenhua Group Corporation Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/22 12:48
End of Day Share Price2020/02/21 00:00
Earnings2019/09/30
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.