SEHK:411

Stock Analysis Report

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Executive Summary

Lam Soon (Hong Kong) Limited, an investment holding company, engages in the manufacture, trading, and processing of edible oil, flour products, and home care products in Hong Kong, the People’s Republic of China, and Macau.


Snowflake Analysis

Flawless balance sheet second-rate dividend payer.

Share Price & News

How has Lam Soon (Hong Kong)'s share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 411 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.6%

411

2.9%

HK Food

1.4%

HK Market


1 Year Return

-20.5%

411

-2.4%

HK Food

-9.9%

HK Market

Return vs Industry: 411 underperformed the Hong Kong Food industry which returned -2.4% over the past year.

Return vs Market: 411 underperformed the Hong Kong Market which returned -9.9% over the past year.


Shareholder returns

411IndustryMarket
7 Day-2.6%2.9%1.4%
30 Day-0.3%-2.3%-3.7%
90 Day-7.0%0.4%-7.8%
1 Year-17.9%-20.5%-0.3%-2.4%-6.9%-9.9%
3 Year26.2%15.0%34.6%25.9%-4.8%-14.4%
5 Year134.3%98.7%1.3%-8.9%-15.2%-28.3%

Price Volatility Vs. Market

How volatile is Lam Soon (Hong Kong)'s share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Lam Soon (Hong Kong) undervalued compared to its fair value and its price relative to the market?

9.14x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 411 (HK$12.56) is trading above our estimate of fair value (HK$9.7)

Significantly Below Fair Value: 411 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 411 is good value based on its PE Ratio (9.1x) compared to the Food industry average (13.1x).

PE vs Market: 411 is good value based on its PE Ratio (9.1x) compared to the Hong Kong market (9.3x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 411's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 411 is overvalued based on its PB Ratio (1.2x) compared to the HK Food industry average (0.8x).


Next Steps

Future Growth

How is Lam Soon (Hong Kong) forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

12.4%

Forecasted Food, Beverage & Tobacco 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 Lam Soon (Hong Kong) 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 Lam Soon (Hong Kong) performed over the past 5 years?

20.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 411 has high quality earnings.

Growing Profit Margin: 411's current net profit margins (6.1%) are lower than last year (6.3%).


Past Earnings Growth Analysis

Earnings Trend: 411's earnings have grown significantly by 20.3% per year over the past 5 years.

Accelerating Growth: 411's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 411 had negative earnings growth (-4.6%) over the past year, making it difficult to compare to the Food industry average (17.2%).


Return on Equity

High ROE: 411's Return on Equity (13.5%) is considered low.


Next Steps

Financial Health

How is Lam Soon (Hong Kong)'s financial position?


Financial Position Analysis

Short Term Liabilities: 411's short term assets (HK$2.5B) exceed its short term liabilities (HK$782.8M).

Long Term Liabilities: 411's short term assets (HK$2.5B) exceed its long term liabilities (HK$21.9M).


Debt to Equity History and Analysis

Debt Level: 411 is debt free.

Reducing Debt: 411 has no debt compared to 5 years ago when its debt to equity ratio was 21.6%.

Debt Coverage: 411 has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: 411 has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

What is Lam Soon (Hong Kong)'s current dividend yield, its reliability and sustainability?

3.50%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 411's dividend (3.5%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.59%).

High Dividend: 411's dividend (3.5%) is low compared to the top 25% of dividend payers in the Hong Kong market (7.38%).


Stability and Growth of Payments

Stable Dividend: 411's dividend payments have been volatile in the past 10 years.

Growing Dividend: 411's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (32%), 411's dividend payments are 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?

9.8yrs

Average board tenure


CEO

Joseph Leung (58yo)

8.08yrs

Tenure

HK$6,102,000

Compensation

Mr. Joseph Leung has been the Group Managing Director and Executive Director of Lam Soon Hong Kong Limited since May 2, 2012. Mr. Leung has 25 years of experience in the areas of food and consumer products ...


CEO Compensation Analysis

Compensation vs Market: Joseph's total compensation ($USD787.14K) is above average for companies of similar size in the Hong Kong market ($USD422.19K).

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


Board Members

NamePositionTenureCompensationOwnership
Joseph Leung
Group MD & Executive Director8.08yrsHK$6.10m0.78% HK$23.9m
Leng Hai Kwek
Chairman13.67yrsno data0.97% HK$29.7m
Hong Cheong Tang
Non-Executive Director3.75yrsno data0.30% HK$9.0m
Sun Tze Whang
Non-Executive Director36.42yrsHK$230.00k11.67% HK$355.1m
Lim Heng Tan
Non-Executive Director23.42yrsHK$230.00k0.12% HK$3.5m
Kai Yiu Lo
Independent Non-Executive Director11.5yrsHK$340.00k0.085% HK$2.6m
Lester Garson Huang
Independent Non-Executive Director6.58yrsHK$320.00k0.064% HK$1.9m
Yuk Wai Joan Ho
Independent Non-Executive Director0.58yrno datano data

9.8yrs

Average Tenure

65yo

Average Age

Experienced Board: 411's board of directors are considered experienced (9.8 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

Lam Soon (Hong Kong) Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Lam Soon (Hong Kong) Limited
  • Ticker: 411
  • Exchange: SEHK
  • Founded: 1961
  • Industry: Packaged Foods and Meats
  • Sector: Food, Beverage & Tobacco
  • Market Cap: HK$3.044b
  • Shares outstanding: 235.95m
  • Website: https://www.lamsoon.com

Number of Employees


Location

  • Lam Soon (Hong Kong) Limited
  • Lam Soon Building
  • 21 Dai Fu Street
  • Tai Po
  • New Territories
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
411SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJan 1992

Biography

Lam Soon (Hong Kong) Limited, an investment holding company, engages in the manufacture, trading, and processing of edible oil, flour products, and home care products in Hong Kong, the People’s Republic of China, and Macau. The company operates through two segments, Food and Home Care. The Food segment manufactures and sells a range of food products comprising flour, edible oils, and vegetable fats for the catering industries and consumers. The Home Care segment manufactures and distributes household cleaning products, such as liquid dishwashing detergents, laundry powders, liquid laundry detergents, fabric softeners, floor cleaners, and industrial marble cleansers. It markets its products under the Knife, Red Lantern, Soon, AXE, Labour, Procleanic, Golden Statue, American Roses, and Crown, as well as Golden Double Peach brands. The company is also involved in the trading of flour, edible oils, cleaning, commodity derivatives, and agency products; provision of trucks rental, warehousing and logistics, information technology, and trustee services; and property and trademark holding businesses. In addition, it provides silo facilities. The company was founded in 1961 and is headquartered in Tai Po, Hong Kong. Lam Soon (Hong Kong) Limited is a subsidiary of Guoline International Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/06/01 12:36
End of Day Share Price2020/06/01 00:00
Earnings2019/12/31
Annual Earnings2019/06/30


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.