China Leon Inspection Holding (SEHK:1586) - Share price, News & Analysis

Q: What is the Fair Price of 1586 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

1586 (HK$1.44) is trading below our estimate of [[fair value]] (HK$2.65)

1586 fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	0/6
Past Performance	3/6
Financial Health	5/6
Dividends	2/6

1586 Stock Overview

Rewards

Trading at 45.6% below our estimate of its fair value

Risk Analysis

Does not have a meaningful market cap (HK$703M)

China Leon Inspection Holding Competitors

Jutal Offshore Oil Services

SEHK:3303

HK$908.1m

TBK & Sons Holdings

SEHK:1960

HK$440.0m

CMIC Ocean En-Tech Holding

SEHK:206

HK$794.6m

SPT Energy Group

SEHK:1251

HK$482.0m

Price History & Performance

Summary of all time highs, changes and price drops for China Leon Inspection Holding
Historical stock prices
Current Share Price	HK$1.44
52 Week High	HK$1.98
52 Week Low	HK$1.18
Beta	-0.081
1 Month Change	2.86%
3 Month Change	13.14%
1 Year Change	-20.00%
3 Year Change	26.26%
5 Year Change	28.12%
Change since IPO	76.00%

Recent News & Updates

May 12

China Leon Inspection Holding (HKG:1586) Will Pay A Smaller Dividend Than Last Year

China Leon Inspection Holding Limited's ( HKG:1586 ) dividend is being reduced to HK$0.018 on the 15th of July. The...

Shareholder Returns

	1586	HK Energy Services	HK Market
7D	0%	1.3%	1.5%
1Y	-20.0%	4.1%	-22.7%

Return vs Industry: 1586 underperformed the Hong Kong Energy Services industry which returned 6.8% over the past year.

Return vs Market: 1586 exceeded the Hong Kong Market which returned -21.9% over the past year.

Price Volatility

Is 1586's price volatile compared to industry and market?
1586 volatility
1586 Average Weekly Movement	3.6%
Energy Services Industry Average Movement	5.9%
Market Average Movement	6.6%
10% most volatile stocks in HK Market	12.8%
10% least volatile stocks in HK Market	3.2%

Stable Share Price: 1586 is less volatile than 75% of Hong Kong stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: 1586's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
2009	2,112	Xiangli Li	https://www.leontest.com

China Leon Inspection Holding Limited, an investment holding company, provides services on inspection, testing, and certification businesses for the energy and commodity segments in Greater China, Singapore, and internationally. The company offers coal inspection and data, mineral inspection, petrochemical product inspection, climate change and sustainable development, power and energy, and leak detection and repair services, as well as integrated services in the field of ecological environment. It also provides standard and quality control technical services; inspection, testing, appraisal, and inspection technology development services; professional technical services; scientific research, technique, and business services; and environmental testing.

China Leon Inspection Holding Fundamentals Summary

How do China Leon Inspection Holding's earnings and revenue compare to its market cap?
1586 fundamental statistics
Market Cap	HK$702.52m
Earnings (TTM)	HK$49.84m
Revenue (TTM)	HK$818.83m

14.1x

P/E Ratio

0.9x

P/S Ratio

Is 1586 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
1586 income statement (TTM)
Revenue	HK$818.83m
Cost of Revenue	HK$472.44m
Gross Profit	HK$346.39m
Other Expenses	HK$296.56m
Earnings	HK$49.84m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.10
Gross Margin	42.30%
Net Profit Margin	6.09%
Debt/Equity Ratio	19.0%

How did 1586 perform over the long term?

See historical performance and comparison

Dividends

2.3%

Current Dividend Yield

35%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 1586 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 1586?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 1586. This is calculated by dividing 1586's market cap by their current preferred multiple.
What is 1586's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	HK$702.52m

1586 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/Revenue	0.9x
Enterprise Value/EBITDA	5.4x
PEG Ratio	n/a

Price to Earnings Ratio vs Peers

How does 1586's PE Ratio compare to its peers?

1586 PE Ratio vs Peers

The above table shows the PE ratio for 1586 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	57.9x
3303 Jutal Offshore Oil Services	70.9x	n/a	HK$908.1m
1960 TBK & Sons Holdings	102.7x	n/a	HK$440.0m
206 CMIC Ocean En-Tech Holding	11x	n/a	HK$794.6m
1251 SPT Energy Group	47.2x	53.8%	HK$482.0m
1586 China Leon Inspection Holding	14.1x	n/a	HK$702.5m

Price-To-Earnings vs Peers: 1586 is good value based on its Price-To-Earnings Ratio (14.1x) compared to the peer average (57.9x).

Price to Earnings Ratio vs Industry

How does 1586's PE Ratio compare vs other companies in the Asian Energy Services Industry?

Price-To-Earnings vs Industry: 1586 is good value based on its Price-To-Earnings Ratio (14.1x) compared to the Hong Kong Energy Services industry average (43.4x)

Price to Earnings Ratio vs Fair Ratio

What is 1586'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.

1586 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	14.1x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate 1586's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of 1586 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 1586 (HK$1.44) is trading below our estimate of fair value (HK$2.65)

Significantly Below Fair Value: 1586 is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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Future Growth

How is China Leon Inspection Holding forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

38.4%

Forecasted Energy 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 China Leon Inspection Holding 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.

Discover growth companies

Examine whether China Leon Inspection Holding is trading at an attractive price based on how much it is expected to earn in the future, and relative to its industry peers and the wider market.
China Leon Inspection Holding competitive advantages and company strategy can generally be found in its financial reports archived here.

Past Performance

How has China Leon Inspection Holding performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

8.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 1586 has high quality earnings.

Growing Profit Margin: 1586's current net profit margins (6.1%) are lower than last year (8.1%).

Past Earnings Growth Analysis

Earnings Trend: 1586's earnings have grown by 8.2% per year over the past 5 years.

Accelerating Growth: 1586's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 1586 had negative earnings growth (-5%) over the past year, making it difficult to compare to the Energy Services industry average (-75%).

Return on Equity

High ROE: 1586's Return on Equity (21%) is considered high.

Discover strong past performing companies

Financial Health

How is China Leon Inspection Holding's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 1586's short term assets (HK$330.7M) exceed its short term liabilities (HK$197.8M).

Long Term Liabilities: 1586's short term assets (HK$330.7M) exceed its long term liabilities (HK$41.7M).

Debt to Equity History and Analysis

Debt Level: 1586 has more cash than its total debt.

Reducing Debt: 1586's debt to equity ratio has increased from 5.9% to 19% over the past 5 years.

Debt Coverage: 1586's debt is well covered by operating cash flow (166.6%).

Interest Coverage: 1586's interest payments on its debt are well covered by EBIT (32.2x coverage).

Balance Sheet

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Dividend

What is China Leon Inspection Holding current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

2.27%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 1586's dividend (2.27%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.84%).

High Dividend: 1586's dividend (2.27%) is low compared to the top 25% of dividend payers in the Hong Kong market (8.38%).

Stability and Growth of Payments

Stable Dividend: 1586 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 1586's dividend payments have increased, but the company has only paid a dividend for 5 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (35.4%), 1586's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (17.8%), 1586's dividend payments are well covered by cash flows.

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Management

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

6.2yrs

Average board tenure

CEO

Xiangli Li (59 yo)

no data

Tenure

HK$4,481,553

Compensation

Mr. Xiangli Li serves as an Executive Chairman and Chief Executive Officer of China Leon Inspection Holding Limited and has been its Executive Director since January 2016. Mr. Li serves as a Legal Represen...

CEO Compensation Analysis

Compensation vs Market: Xiangli's total compensation ($USD570.90K) is above average for companies of similar size in the Hong Kong market ($USD244.27K).

Compensation vs Earnings: Xiangli's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.

Board Members

Experienced Board: 1586's board of directors are considered experienced (6.2 years average tenure).

Ownership

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

Insider Trading Volume

Insider Buying: 1586 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.

Data	Last Updated (UTC time)
Company Analysis	2022/08/09 00:00
End of Day Share Price	2022/08/09 00:00
Earnings	2021/12/31
Annual Earnings	2021/12/31