SEHK:3323

Stock Analysis Report

China National Building Material

Executive Summary

China National Building Material Company Limited, an investment holding company, engages in the cement, lightweight building material, glass fiber, composite material, and engineering service businesses.

Rewards

Trading at 71.6% below its fair value

Earnings grew by 37.6% over the past year

Risk Analysis

Earnings are forecast to decline by an average of -4.3% per year for the next 3 years

Has a high level of debt

Unstable dividend track record



Snowflake Analysis

Solid track record, good value and pays a dividend.


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Share Price & News

How has China National Building Material's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 3323 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-9.1%

3323

-3.6%

HK Basic Materials

-3.7%

HK Market


1 Year Return

44.5%

3323

33.3%

HK Basic Materials

1.0%

HK Market

Return vs Industry: 3323 exceeded the Hong Kong Basic Materials industry which returned 41.3% over the past year.

Return vs Market: 3323 exceeded the Hong Kong Market which returned 6.4% over the past year.


Shareholder returns

3323IndustryMarket
7 Day-9.1%-3.6%-3.7%
30 Day9.3%2.3%-0.2%
90 Day26.0%14.5%4.1%
1 Year49.6%44.5%39.0%33.3%4.7%1.0%
3 Year99.2%87.9%108.3%91.1%20.1%7.9%
5 Year25.8%14.4%79.1%58.8%18.4%-1.3%

Price Volatility Vs. Market

How volatile is China National Building Material's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is China National Building Material 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: 3323 (HK$9.07) is trading below our estimate of fair value (HK$31.94)

Significantly Below Fair Value: 3323 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 3323 is poor value based on its PE Ratio (6.8x) compared to the Basic Materials industry average (5.9x).

PE vs Market: 3323 is good value based on its PE Ratio (6.8x) compared to the Hong Kong market (10.5x).


Price to Earnings Growth Ratio

PEG Ratio: 3323's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: 3323 is good value based on its PB Ratio (0.7x) compared to the HK Basic Materials industry average (1.2x).


Next Steps

Future Growth

How is China National Building Material forecast to perform in the next 1 to 3 years based on estimates from 20 analysts?

-3.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 3323's earnings are forecast to decline over the next 3 years (-4.3% per year).

Earnings vs Market: 3323's earnings are forecast to decline over the next 3 years (-4.3% per year).

High Growth Earnings: 3323's earnings are forecast to decline over the next 3 years.

Revenue vs Market: 3323's revenue (0.04% per year) is forecast to grow slower than the Hong Kong market (10.1% per year).

High Growth Revenue: 3323's revenue (0.04% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 3323's Return on Equity is forecast to be low in 3 years time (11%).


Next Steps

Past Performance

How has China National Building Material performed over the past 5 years?

18.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 3323 has high quality earnings.

Growing Profit Margin: 3323's current net profit margins (4.2%) are higher than last year (3.6%).


Past Earnings Growth Analysis

Earnings Trend: 3323's earnings have grown by 18% per year over the past 5 years.

Accelerating Growth: 3323's earnings growth over the past year (37.6%) exceeds its 5-year average (18% per year).

Earnings vs Industry: 3323 earnings growth over the past year (37.6%) exceeded the Basic Materials industry 30.8%.


Return on Equity

High ROE: 3323's Return on Equity (11.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is China National Building Material's financial position?


Financial Position Analysis

Short Term Liabilities: 3323's short term assets (CN¥166.3B) do not cover its short term liabilities (CN¥211.9B).

Long Term Liabilities: 3323's short term assets (CN¥166.3B) exceed its long term liabilities (CN¥94.1B).


Debt to Equity History and Analysis

Debt Level: 3323's debt to equity ratio (137.1%) is considered high.

Reducing Debt: 3323's debt to equity ratio has reduced from 328.4% to 137.1% over the past 5 years.

Debt Coverage: 3323's debt is well covered by operating cash flow (25.5%).

Interest Coverage: 3323's interest payments on its debt are well covered by EBIT (5.1x coverage).


Balance Sheet

Inventory Level: 3323 has a high level of physical assets or inventory.

Debt Coverage by Assets: 3323's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

What is China National Building Material's current dividend yield, its reliability and sustainability?

2.35%

Current Dividend Yield


Dividend Yield vs Market

company2.4%marketbottom25%2.2%markettop25%6.2%industryaverage3.7%forecastin3Years3.7%

Current dividend yield vs market & industry

Notable Dividend: 3323's dividend (2.19%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.16%).

High Dividend: 3323's dividend (2.24%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.02%).


Stability and Growth of Payments

Stable Dividend: 3323's dividend payments have been volatile in the past 10 years.

Growing Dividend: 3323's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (15.1%), 3323's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 3323's dividends in 3 years are forecast to be well covered by earnings (21.6% payout ratio).


Next Steps

Management

What is the CEO of China National Building Material's salary, the management and board of directors tenure and is there insider trading?

11.9yrs

Average management tenure


CEO

Shou Peng (59yo)

1.6yrs

Tenure

CN¥1,848,000

Compensation

Mr. Peng Shou has been President of China National Building Material Company Limited since June 13, 2018 and also served as its Vice President since March 2005 until June 13, 2018. Mr. Peng has over 30 yea ...


CEO Compensation Analysis

Compensation vs Market: Shou's total compensation ($USD268.23K) is below average for companies of similar size in the Hong Kong market ($USD1.00M).

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


Management Age and Tenure

11.9yrs

Average Tenure

52yo

Average Age

Experienced Management: 3323's management team is seasoned and experienced (11.9 years average tenure).


Board Age and Tenure

5.3yrs

Average Tenure

54yo

Average Age

Experienced Board: 3323's board of directors are considered experienced (5.3 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

SellHK$14,750,22003 Dec 19
BlackRock, Inc.
EntityCompany
Shares1,886,000
Max PriceHK$7.82
SellHK$10,772,95805 Aug 19
Citigroup Inc.,Banking and Securities Investments
EntityCompany
Shares1,532,295
Max PriceHK$7.03
SellHK$93,411,37209 Jul 19
JPMorgan Chase & Co, Brokerage and Securities Investments
EntityCompany
Shares12,882,733
Max PriceHK$7.25
BuyHK$376,609,83105 Jul 19
JPMorgan Chase & Co, Brokerage and Securities Investments
EntityCompany
Shares53,778,386
Max PriceHK$7.00
SellHK$19,743,66311 Jun 19
BlackRock, Inc.
EntityCompany
Shares3,354,000
Max PriceHK$5.89
SellHK$205,038,26925 Mar 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares33,943,367
Max PriceHK$6.04
BuyHK$164,944,07121 Mar 19
JPMorgan Chase & Co, Private Banking and Investment Banking Investments
EntityCompany
Shares27,385,238
Max PriceHK$6.02

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Shou Peng (59yo)

    President & Executive Director

    • Tenure: 1.6yrs
    • Compensation: CN¥1.85m
  • Jianglin Cao (53yo)

    Chairman

    • Tenure: 1.6yrs
  • Hong Pei (46yo)

    Chief Accountant

    • Xingtai Cui (58yo)

      VP & Executive Director

      • Tenure: 10.4yrs
      • Compensation: CN¥1.77m
    • Zhangli Chang (49yo)

      Non-Executive Director

      • Tenure: 8.2yrs
      • Compensation: CN¥821.00k
    • Shuhong Cui (51yo)

      GM - the Administration & HR Dept and Staff Representative Supervisor

      • Tenure: 14.7yrs
      • Compensation: CN¥309.00k
    • Mei Yi Lee (51yo)

      Joint Company Secretary

      • Yanjun Yang (51yo)

        Deputy General Manager

        • Xue’an Chen (55yo)

          CFO & VP

          • Tenure: 14.8yrs
        • Kaijun Yu (56yo)

          Vice President & Secretary of the Board

          • Tenure: 1.6yrs

        Board Members

        • Shou Peng (59yo)

          President & Executive Director

          • Tenure: 1.6yrs
          • Compensation: CN¥1.85m
        • Jianglin Cao (53yo)

          Chairman

          • Tenure: 1.6yrs
        • Xingtai Cui (58yo)

          VP & Executive Director

          • Tenure: 10.4yrs
          • Compensation: CN¥1.77m
        • Zhangli Chang (49yo)

          Non-Executive Director

          • Tenure: 8.2yrs
          • Compensation: CN¥821.00k
        • Shuhong Cui (51yo)

          GM - the Administration & HR Dept and Staff Representative Supervisor

          • Tenure: 14.7yrs
          • Compensation: CN¥309.00k
        • Steve Sun (49yo)

          Independent Non-Executive Director

          • Tenure: 5.3yrs
          • Compensation: CN¥300.00k
        • Zheng Tao (44yo)

          Non-Executive Director

          • Tenure: 5.3yrs
        • Fangsheng Zhou (70yo)

          Independent Non-Executive Director

          • Tenure: 3.7yrs
          • Compensation: CN¥300.00k
        • Fengsheng Qian (55yo)

          Independent Non-Executive Director

          • Tenure: 3.7yrs
          • Compensation: CN¥300.00k
        • Xinhua Li (55yo)

          Chairman of the Supervisory Committee

          • Tenure: 1.6yrs

        Company Information

        China National Building Material Company Limited's company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: China National Building Material Company Limited
        • Ticker: 3323
        • Exchange: SEHK
        • Founded: 2005
        • Industry: Construction Materials
        • Sector: Materials
        • Market Cap: HK$72.286b
        • Shares outstanding: 8.43b
        • Website: https://www.cnbmltd.com

        Number of Employees


        Location

        • China National Building Material Company Limited
        • Guohai Plaza, Tower 2
        • 21st Floor
        • Beijing
        • 100036
        • China

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        3323SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares-Foreign ListedHKHKDMar 2006
        D1YDB (Deutsche Boerse AG)YesForeign Shares-Foreign ListedDEEURMar 2006
        3323SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDMar 2006
        3323SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDMar 2006
        CBUM.YOTCPK (Pink Sheets LLC)ADRUSUSDOct 2008

        Biography

        China National Building Material Company Limited, an investment holding company, engages in the cement, lightweight building material, glass fiber, composite material, and engineering service businesses. The company operates through five segments: Cement, Concrete, New materials, Engineering services, and Others. It produces and sells cement, concrete, glass fiber, and composite and lightweight building materials. The company also provides engineering services to glass and cement manufacturers and equipment procurement. In addition, it is involved in the merchandise trading and other businesses. It operates in the People’s Republic of China, Europe, the Middle East, Southeast Asia, Oceania, Africa, the Americas, and internationally. The company was founded in 2005 and is based in Beijing, the People’s Republic of China. China National Building Material Company Limited is a subsidiary of China National Building Material Group Co., Ltd. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/24 12:49
        End of Day Share Price2020/01/23 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.