SEHK:1044

Stock Analysis Report

Hengan International Group

Executive Summary

Hengan International Group Company Limited, an investment holding company, manufactures, distributes, and sells personal hygiene products in the People’s Republic of China, Hong Kong, and internationally.

Snowflake

Fundamentals

Established dividend payer with mediocre balance sheet.


Similar Companies

Share Price & News

How has Hengan International Group's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

-0.1%

1044

1.1%

HK Personal Products

0.3%

HK Market


1 Year Return

-19.3%

1044

-12.0%

HK Personal Products

1.3%

HK Market

Return vs Industry: 1044 underperformed the Hong Kong Personal Products industry which returned -12% over the past year.

Return vs Market: 1044 underperformed the Hong Kong Market which returned 1.3% over the past year.


Shareholder returns

1044IndustryMarket
7 Day-0.1%1.1%0.3%
30 Day-1.6%-1.5%0.5%
90 Day-15.1%-12.0%-4.6%
1 Year-15.8%-19.3%-8.9%-12.0%4.9%1.3%
3 Year-7.2%-17.5%-10.6%-19.2%15.3%3.7%
5 Year-21.8%-35.0%-28.3%-38.3%20.0%-0.006%

Price Volatility Vs. Market

How volatile is Hengan International Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Hengan International Group undervalued compared to its fair value and its price relative to the market?

37.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 1044 (HK$51.3) is trading below our estimate of fair value (HK$82.53)

Significantly Below Fair Value: 1044 is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: 1044 is poor value based on its PE Ratio (14.9x) compared to the Personal Products industry average (12.9x).

PE vs Market: 1044 is poor value based on its PE Ratio (14.9x) compared to the Hong Kong market (10.3x).


Price to Earnings Growth Ratio

PEG Ratio: 1044 is poor value based on its PEG Ratio (1.8x)


Price to Book Ratio

PB vs Industry: 1044 is overvalued based on its PB Ratio (3.2x) compared to the HK Personal Products industry average (1.4x).


Next Steps

Future Growth

How is Hengan International Group forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?

8.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1044's forecast earnings growth (8.4% per year) is above the savings rate (2%).

Earnings vs Market: 1044's earnings (8.4% per year) are forecast to grow slower than the Hong Kong market (11.1% per year).

High Growth Earnings: 1044's earnings are forecast to grow, but not significantly.

Revenue vs Market: 1044's revenue (6.4% per year) is forecast to grow slower than the Hong Kong market (10% per year).

High Growth Revenue: 1044's revenue (6.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 1044's Return on Equity is forecast to be high in 3 years time (22.4%)


Next Steps

Past Performance

How has Hengan International Group performed over the past 5 years?

5.4%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: 1044's earnings have grown by 5.4% per year over the past 5 years.

Accelerating Growth: 1044's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 1044 had negative earnings growth (-4%) over the past year, making it difficult to compare to the Personal Products industry average (9.3%).


Return on Equity

High ROE: Whilst 1044's Return on Equity (21.64%) is high, this metric is skewed due to their high level of debt.


Return on Assets

ROA vs Industry: 1044 has a higher Return on Assets than the Personal Products industry average last year.


Return on Capital Employed

ROCE Improving: 1044's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Hengan International Group's financial position?


Financial Position Analysis

Short Term Liabilities: 1044's short term assets (CN¥30.3B) exceeds its short term liabilities (CN¥23.7B)

Long Term Liabilities: 1044's short term assets (30.3B) exceeds its long term liabilities (4.4B)


Debt to Equity History and Analysis

Debt Level: 1044's debt to equity ratio (139.5%) is considered high

Reducing Debt: 1044's debt to equity ratio has increased from 131.7% to 139.5% over the past 5 years.

Debt Coverage: 1044's debt is not well covered by operating cash flow (13.3%).

Interest Coverage: 1044 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 1044 has a high level of physical assets or inventory.

Debt Coverage by Assets: 1044's debt is covered by short term assets (assets are 1.257840x debt).


Next Steps

Dividend

What is Hengan International Group's current dividend yield, its reliability and sustainability?

4.75%

Current Dividend Yield


Dividend Yield vs Market

company4.8%marketbottom25%2.3%markettop25%6.2%industryaverage3.9%forecastin3Years5.2%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: 1044's dividend (4.75%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.26%).

High Dividend: 1044's dividend (4.75%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.18%).

Stable Dividend: 1044's dividends per share have been stable in the past 10 years.

Growing Dividend: 1044's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (70.6%), 1044's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 1044's dividends in 3 years are forecast to be covered by earnings (68.4% payout ratio).


Next Steps

Management

What is the CEO of Hengan International Group's salary, the management and board of directors tenure and is there insider trading?

2.8yrs

Average management tenure


CEO

Lin-Chit Hui (66yo)

0yrs

Tenure

CN¥1,165,000

Compensation

Mr. Lin Chit Hui serves as a Deputy Chairman and Chief Executive Officer of Hengan International Group Company Limited and has been its Executive Director since August 26, 1998. Mr. Hui is responsible for  ...


CEO Compensation Analysis

Compensation vs. Market: Lin-Chit's total compensation ($USD164.62K) is about average for companies of similar size in the Hong Kong market ($USD582.48K).

Compensation vs Earnings: Lin-Chit's compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.8yrs

Average Tenure

51yo

Average Age

Experienced Management: 1044's management team is considered experienced (2.8 years average tenure).


Board Age and Tenure

9.3yrs

Average Tenure

51yo

Average Age

Experienced Board: 1044's board of directors are considered experienced (9.3 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellCN¥310,952,60408 May 19
Da Xu
EntityIndividual
Role
Member of the Board of Directors
CFO & Executive Director
Shares4,582,942
Max PriceCN¥67.85
SellCN¥21,180,00027 Apr 19
Da Xu
EntityIndividual
Role
Member of the Board of Directors
CFO & Executive Director
Shares300,000
Max PriceCN¥70.60
BuyCN¥123,875,05816 Apr 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares1,768,431
Max PriceCN¥70.05
SellCN¥51,705,96915 Apr 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares732,122
Max PriceCN¥70.62
BuyCN¥34,182,40315 Apr 19
J.P. Morgan Asset Management, Inc.
EntityCompany
Shares484,000
Max PriceCN¥70.62
BuyCN¥99,774,61912 Apr 19
J.P. Morgan Asset Management, Inc.
EntityCompany
Shares1,411,385
Max PriceCN¥70.69
SellCN¥56,639,99712 Apr 19
Da Xu
EntityIndividual
Role
Member of the Board of Directors
CFO & Executive Director
Shares800,000
Max PriceCN¥70.80
BuyCN¥55,374,00014 Dec 18
Lin-Chit Hui
EntityIndividual
Role
Chief Executive Officer
Executive Deputy Chairman & CEO
Shares1,000,000
Max PriceCN¥55.37
BuyCN¥24,620,75013 Dec 18
Man Bok Sze
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares437,500
Max PriceCN¥56.28
BuyCN¥243,169,96813 Dec 18
Man Bok Sze
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares4,422,800
Max PriceCN¥54.98
BuyCN¥109,701,99913 Dec 18
Lin-Chit Hui
EntityIndividual
Role
Chief Executive Officer
Executive Deputy Chairman & CEO
Shares2,000,000
Max PriceCN¥54.85
BuyCN¥43,295,00110 Dec 18
Wong Sze
EntityIndividual
Role
Member of the Board of Directors
Executive Director
Shares700,000
Max PriceCN¥61.85

Ownership Breakdown


Management Team

  • Da Xu (52yo)

    CFO & Executive Director

    • Tenure: 21.2yrs
    • Compensation: CN¥710.00k
  • Man Bok Sze (69yo)

    Chairman of the Board

    • Tenure: 0yrs
    • Compensation: CN¥367.00k
  • Ching Hung (69yo)

    Head of Purchasing Tender Assignments & Executive Director

    • Tenure: 0yrs
    • Compensation: CN¥183.00k
  • Chun Xu (44yo)

    Executive Director

    • Tenure: 21.2yrs
  • Lin-Chit Hui (66yo)

    Executive Deputy Chairman & CEO

    • Tenure: 0yrs
    • Compensation: CN¥1.17m
  • Shui Xu (50yo)

    COO, CEO of Operation Service Centre

    • Tenure: 9.3yrs
    • Compensation: CN¥1.42m
  • Ching Chi Hui (34yo)

    Operation Management Dept. Director

    • Tenure: 9.3yrs
    • Compensation: CN¥566.00k
  • Wong Sze (43yo)

    Executive Director

    • Tenure: 9.3yrs
  • Fangsheng Zhou (70yo)

    Independent Non-Executive Director

    • Tenure: 6.8yrs
    • Compensation: CN¥102.00k
  • Wai Li (41yo)

    Deputy CFO

    • Tenure: 2.6yrs
    • Compensation: CN¥1.27m

Board Members

  • Da Xu (52yo)

    CFO & Executive Director

    • Tenure: 21.2yrs
    • Compensation: CN¥710.00k
  • Ada Wong (59yo)

    Independent Non-Executive Director

    • Tenure: 21yrs
    • Compensation: CN¥102.00k
  • Man Bok Sze (69yo)

    Chairman of the Board

    • Tenure: 0yrs
    • Compensation: CN¥367.00k
  • Chun Xu (44yo)

    Executive Director

    • Tenure: 21.2yrs
  • Lin-Chit Hui (66yo)

    Executive Deputy Chairman & CEO

    • Tenure: 0yrs
    • Compensation: CN¥1.17m
  • Shui Xu (50yo)

    COO, CEO of Operation Service Centre

    • Tenure: 9.3yrs
    • Compensation: CN¥1.42m
  • Ching Chi Hui (34yo)

    Operation Management Dept. Director

    • Tenure: 9.3yrs
    • Compensation: CN¥566.00k
  • Wong Sze (43yo)

    Executive Director

    • Tenure: 9.3yrs
  • Fangsheng Zhou (70yo)

    Independent Non-Executive Director

    • Tenure: 6.8yrs
    • Compensation: CN¥102.00k
  • Wai Li (41yo)

    Deputy CFO

    • Tenure: 2.6yrs
    • Compensation: CN¥1.27m

Company Information

Hengan International Group Company Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Hengan International Group Company Limited
  • Ticker: 1044
  • Exchange: SEHK
  • Founded: 1985
  • Industry: Personal Products
  • Sector: Household
  • Market Cap: HK$61.744b
  • Shares outstanding: 1.19b
  • Website: https://www.hengan.com

Number of Employees


Location

  • Hengan International Group Company Limited
  • Hengan Industrial City
  • Anhai Town
  • Jinjiang
  • Fujian Province
  • 362261
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HEGI.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDDec 1998
HGNCDB (Deutsche Boerse AG)YesOrdinary SharesDEEURDec 1998
1044SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDDec 1998
1044SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDDec 1998
1044SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDDec 1998
HEGI.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDNov 2008

Biography

Hengan International Group Company Limited, an investment holding company, manufactures, distributes, and sells personal hygiene products in the People’s Republic of China, Hong Kong, and internationally.  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/23 12:37
End of Day Share Price2019/10/23 00:00
Earnings2019/06/30
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.