SEHK:2233

Stock Analysis Report

Executive Summary

West China Cement Limited, an investment holding company, manufactures and sells cement and cement products in the People’s Republic of China.

Snowflake

Fundamentals

Undervalued with excellent balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

0%

2233

-0.8%

HK Basic Materials

0.9%

HK Market


1 Year Return

4.0%

2233

8.3%

HK Basic Materials

0.6%

HK Market

Return vs Industry: 2233 underperformed the Hong Kong Basic Materials industry which returned 8.3% over the past year.

Return vs Market: 2233 exceeded the Hong Kong Market which returned 0.6% over the past year.


Shareholder returns

2233IndustryMarket
7 Day0%-0.8%0.9%
30 Day1.6%0.9%0.5%
90 Day-2.2%-1.2%-4.3%
1 Year8.8%4.0%13.2%8.3%4.2%0.6%
3 Year81.1%67.9%115.0%97.6%15.6%4.0%
5 Year91.3%77.0%71.4%51.2%20.0%-0.08%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is West China Cement 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: 2233 (HK$1.31) is trading below our estimate of fair value (HK$4.37)

Significantly Below Fair Value: 2233 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 2233 is good value based on its PE Ratio (4.9x) compared to the Basic Materials industry average (5.7x).

PE vs Market: 2233 is good value based on its PE Ratio (4.9x) compared to the Hong Kong market (10.3x).


Price to Earnings Growth Ratio

PEG Ratio: 2233 is poor value based on its PEG Ratio (4.1x)


Price to Book Ratio

PB vs Industry: 2233 is good value based on its PB Ratio (0.8x) compared to the HK Basic Materials industry average (1.1x).


Next Steps

Future Growth

How is West China Cement forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

1.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2233's forecast earnings growth (1.2% per year) is below the savings rate (2%).

Earnings vs Market: 2233's earnings (1.2% per year) are forecast to grow slower than the Hong Kong market (11.3% per year).

High Growth Earnings: 2233's earnings are forecast to grow, but not significantly.

Revenue vs Market: 2233's revenue (0.3% per year) is forecast to grow slower than the Hong Kong market (10.3% per year).

High Growth Revenue: 2233's revenue (0.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 2233's Return on Equity is forecast to be low in 3 years time (15.9%).


Next Steps

Past Performance

How has West China Cement performed over the past 5 years?

57.5%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: 2233's earnings have grown significantly by 57.5% per year over the past 5 years.

Accelerating Growth: 2233's earnings growth over the past year (14.6%) is below its 5-year average (57.5% per year).

Earnings vs Industry: 2233 earnings growth over the past year (14.6%) underperformed the Basic Materials industry 45.6%.


Return on Equity

High ROE: 2233's Return on Equity (15.9%) is considered low.


Return on Assets

ROA vs Industry: 2233 has a higher Return on Assets than the Basic Materials industry average last year.


Return on Capital Employed

ROCE Improving: 2233 has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is West China Cement's financial position?


Financial Position Analysis

Short Term Liabilities: 2233's short term assets (CN¥3.7B) do not cover its short term liabilities (CN¥4.3B)

Long Term Liabilities: 2233's short term assets (3.7B) exceeds its long term liabilities (827.9M)


Debt to Equity History and Analysis

Debt Level: 2233's debt to equity ratio (33.3%) is considered satisfactory

Reducing Debt: 2233's debt to equity ratio has reduced from 79% to 33.3% over the past 5 years.

Debt Coverage: 2233's debt is well covered by operating cash flow (107.1%).

Interest Coverage: 2233's interest payments on its debt are well covered by EBIT (28.6x coverage).


Balance Sheet

Inventory Level: 2233 has a high level of physical assets or inventory.

Debt Coverage by Assets: 2233's debt is covered by short term assets (assets are 1.316600x debt).


Next Steps

Dividend

What is West China Cement's current dividend yield, its reliability and sustainability?

3.04%

Current Dividend Yield


Dividend Yield vs Market

company3.0%marketbottom25%2.3%markettop25%6.3%industryaverage4.2%forecastin3Years5.5%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: 2233's dividend (3.04%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.27%).

High Dividend: 2233's dividend (3.04%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.25%).

Stable Dividend: 2233 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 2233's dividend payments have increased, but the company has only paid a dividend for 8 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (20.8%), 2233's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 2233's dividends in 3 years are forecast to be well covered by earnings (23.4% payout ratio).


Next Steps

Management

What is the CEO of West China Cement's salary, the management and board of directors tenure and is there insider trading?

8.3yrs

Average board tenure


CEO

Weiping Ma (57yo)

4.7yrs

Tenure

CN¥3,778,000

Compensation

Dr. Ma Weiping has been the Chief Executive Officer of West China Cement Limited since February 5, 2015. Dr. Ma served as Managing Director of Shaanxi Fuping Cement Co., Ltd. Dr. Ma has over 20 years of ma ...


CEO Compensation Analysis

Compensation vs. Market: Weiping's total compensation ($USD533.50K) is about average for companies of similar size in the Hong Kong market ($USD404.66K).

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


Board Age and Tenure

8.3yrs

Average Tenure

57.5yo

Average Age

Experienced Board: 2233's board of directors are considered experienced (8.3 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¥12,084,80823 Aug 19
FIL Limited
EntityCompany
Shares8,603,119
Max PriceCN¥1.40
BuyCN¥4,067,47129 May 19
FIL Limited
EntityCompany
Shares3,954,000
Max PriceCN¥1.03
BuyCN¥2,684,78909 Apr 19
GIC Pte. Ltd.
EntityCompany
Shares2,404,000
Max PriceCN¥1.12
SellCN¥572,54314 Jan 19
Morgan Stanley, Investment Banking and Brokerage Investments
EntityCompany
Shares571,970
Max PriceCN¥1.00
BuyCN¥2,484,51326 Dec 18
GIC Pte. Ltd.
EntityCompany
Shares2,498,000
Max PriceCN¥0.99

Ownership Breakdown


Management Team

  • Jimin Zhang (64yo)

    Founder & Chairman

    • Tenure: 9.3yrs
    • Compensation: CN¥2.69m
  • King Sau Chan (41yo)

    CFO & Company Secretary

    • Tenure: 8.4yrs
  • Weiping Ma (57yo)

    CEO & Executive Director

    • Tenure: 4.7yrs
    • Compensation: CN¥3.78m

Board Members

  • Conway Lee (65yo)

    Independent Non-Executive Director

    • Tenure: 9.3yrs
    • Compensation: CN¥381.00k
  • Kenny Tam (70yo)

    Independent Non-Executive Director

    • Tenure: 9.3yrs
    • Compensation: CN¥381.00k
  • Jimin Zhang (64yo)

    Founder & Chairman

    • Tenure: 9.3yrs
    • Compensation: CN¥2.69m
  • Zhaoyang Ma (50yo)

    Non-Executive Director

    • Tenure: 9.3yrs
    • Compensation: CN¥381.00k
  • Weiping Ma (57yo)

    CEO & Executive Director

    • Tenure: 4.7yrs
    • Compensation: CN¥3.78m
  • Yan Liu (53yo)

    Non-Executive Director

    • Tenure: 4.3yrs
    • Compensation: CN¥342.00k
  • Dong Zhu (58yo)

    Independent Non-Executive Director

    • Tenure: 0.3yrs
  • Chanhong Fan (54yo)

    Non-Executive Director

    • Tenure: 0.3yrs

Company Information

West China Cement Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: West China Cement Limited
  • Ticker: 2233
  • Exchange: SEHK
  • Founded: 1991
  • Industry: Construction Materials
  • Sector: Materials
  • Market Cap: HK$7.120b
  • Shares outstanding: 5.44b
  • Website: https://www.westchinacement.com

Number of Employees


Location

  • West China Cement Limited
  • Yaobai R&D Training Center
  • No. 336 4th Shenzhou Road
  • Xi'an
  • Shaanxi Province
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
WCHN.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDDec 2006
2233SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDDec 2006
WFG1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURDec 2006
2233SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDDec 2006
2233SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDDec 2006

Biography

West China Cement Limited, an investment holding company, manufactures and sells cement and cement products in the People’s Republic of China. The company sells its products under the Yao Bai and Yaobaishu ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/20 12:56
End of Day Share Price2019/10/18 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.