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

-4.5%

2233

-3.0%

HK Basic Materials

-2.7%

HK Market


1 Year Return

-7.4%

2233

-4.8%

HK Basic Materials

-9.4%

HK Market

2233 underperformed the Basic Materials industry which returned -4.8% over the past year.

2233 outperformed the Market in Hong Kong which returned -9.4% over the past year.


Share holder returns

2233IndustryMarket
7 Day-4.5%-3.0%-2.7%
30 Day-8.7%5.0%2.0%
90 Day15.6%-0.5%-5.8%
1 Year-3.0%-7.4%-0.5%-4.8%-6.1%-9.4%
3 Year78.8%65.8%108.5%91.5%14.3%2.7%
5 Year76.8%63.6%63.8%44.5%16.7%-2.8%

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 based on future cash flows and its price relative to the stock market?

>50%

Discount to future cash flow value


Intrinsic Value Based on Future Cash Flows

West China Cement's share price is below the future cash flow value, and at a moderate discount (> 20%).

West China Cement's share price is below the future cash flow value, and at a substantial discount (> 40%).


Price Based on Earnings

West China Cement is good value based on earnings compared to the HK Basic Materials industry average.

West China Cement is good value based on earnings compared to the Hong Kong market.


Price Based on Expected Growth

West China Cement is poor value based on expected growth next year.


Price Based on Value of Assets

West China Cement is good value based on assets compared to the HK Basic Materials industry average.


Next Steps

Future Growth

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

0.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

West China Cement's revenue is expected to grow by 0.2% yearly, however this is not considered high growth (20% yearly).

West China Cement's earnings are expected to grow by 0.3% yearly, however this is not considered high growth (20% yearly).

West China Cement's revenue growth is positive but not above the Hong Kong market average.

West China Cement's earnings growth is positive but not above the Hong Kong market average.

West China Cement's earnings growth is positive but not above the low risk savings rate of 2%.


Earnings per Share Growth Estimates


Future Return on Equity

West China Cement is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).


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

West China Cement has delivered over 20% year on year earnings growth in the past 5 years.

West China Cement's 1-year earnings growth is less than its 5-year average (14.6% vs 57.5%)

West China Cement's earnings growth has not exceeded the HK Basic Materials industry average in the past year (14.6% vs 45.5%).


Return on Equity

West China Cement has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).


Return on Assets

West China Cement used its assets more efficiently than the HK Basic Materials industry average last year based on Return on Assets.


Return on Capital Employed

West China Cement has significantly improved its use of capital last year versus 3 years ago (Return on Capital Employed).


Next Steps

Financial Health

How is West China Cement's financial position?


Financial Position Analysis

West China Cement's short term (1 year) commitments are greater than its holdings of cash and other short term assets.

West China Cement's cash and other short term assets cover its long term commitments.


Debt to Equity History and Analysis

West China Cement's level of debt (33.3%) compared to net worth is satisfactory (less than 40%).

The level of debt compared to net worth has been reduced over the past 5 years (79% vs 33.3% today).

Debt is well covered by operating cash flow (89.7%, greater than 20% of total debt).

Interest payments on debt are well covered by earnings (EBIT is 28.6x coverage).


Balance Sheet

High level of physical assets or inventory.

Debt is covered by short term assets, assets are 1.3x debt.


Next Steps

Dividend

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

5.50%

Expected Dividend Yield


Dividend Yield and Payments Analysis

West China Cement's pays a higher dividend yield than the bottom 25% of dividend payers in Hong Kong (2.21%).

West China Cement's dividend is below the markets top 25% of dividend payers in Hong Kong (6.17%).

West China Cement has been paying a dividend for less than 10 years and during this time payments have been volatile (annual drop of over 20%).

Dividend payments have increased, but West China Cement only paid a dividend in the past 8 years.


Current Payout to Shareholders

Dividends paid are well covered by earnings (4.8x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be well covered by earnings (4.4x coverage).


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?

8.2yrs

Average board tenure


CEO

Weiping Ma (57yo)

4.6yrs

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

Weiping's remuneration is about average for companies of similar size in Hong Kong.

Weiping's compensation has increased by more than 20% in the past year whilst earnings grew less than 20%.


Board Age and Tenure

8.2yrs

Average Tenure

57.5yo

Average Age

The tenure for the West China Cement board of directors is about average.


Insider Trading

No 3 month open market individual insider trading information.


Recent Insider Transactions

SellCN¥12,084,80823 Aug 19
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Max PriceCN¥1.40
BuyCN¥4,067,47129 May 19
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BuyCN¥2,684,78909 Apr 19
GIC Pte. Ltd.
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Max PriceCN¥1.12
SellCN¥572,54314 Jan 19
Morgan Stanley, Investment Banking and Brokerage Investments
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BuyCN¥2,484,51326 Dec 18
GIC Pte. Ltd.
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Shares2,498,000
Max PriceCN¥0.99

Ownership Breakdown


Management Team

  • Jimin Zhang (64yo)

    Founder & Chairman

    • Tenure: 9.2yrs
    • Compensation: CN¥2.69m
  • King Sau Chan (41yo)

    CFO & Company Secretary

    • Tenure: 8.3yrs
  • Weiping Ma (57yo)

    CEO & Executive Director

    • Tenure: 4.6yrs
    • Compensation: CN¥3.78m

Board Members

  • Conway Lee (65yo)

    Independent Non-Executive Director

    • Tenure: 9.2yrs
    • Compensation: CN¥381.00k
  • Kenny Tam (70yo)

    Independent Non-Executive Director

    • Tenure: 9.2yrs
    • Compensation: CN¥381.00k
  • Jimin Zhang (64yo)

    Founder & Chairman

    • Tenure: 9.2yrs
    • Compensation: CN¥2.69m
  • Zhaoyang Ma (50yo)

    Non-Executive Director

    • Tenure: 9.2yrs
    • Compensation: CN¥381.00k
  • Weiping Ma (57yo)

    CEO & Executive Director

    • Tenure: 4.6yrs
    • Compensation: CN¥3.78m
  • Yan Liu (53yo)

    Non-Executive Director

    • Tenure: 4.2yrs
    • Compensation: CN¥342.00k
  • Dong Zhu (58yo)

    Independent Non-Executive Director

    • Tenure: 0.2yrs
  • Chanhong Fan (54yo)

    Non-Executive Director

    • Tenure: 0.2yrs

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$7.011b
  • 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 Analysis2019/09/23 12:50
End of Day Share Price2019/09/23 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.