SEHK:546

Stock Analysis Report

Executive Summary

Fufeng Group Limited, an investment holding company, engages in the manufacture and sale of fermentation-based food additive, and biochemical and starch-based products in the People’s Republic of China and internationally.

Snowflake

Fundamentals

Flawless balance sheet, undervalued and pays a dividend.


Similar Companies

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

6.6%

546

3.0%

HK Chemicals

2.2%

HK Market


1 Year Return

13.0%

546

-28.3%

HK Chemicals

-1.3%

HK Market

Return vs Industry: 546 exceeded the Hong Kong Chemicals industry which returned -28.3% over the past year.

Return vs Market: 546 exceeded the Hong Kong Market which returned -1.3% over the past year.


Share holder returns

546IndustryMarket
7 Day6.6%3.0%2.2%
30 Day-7.0%-5.2%-2.9%
90 Day-10.1%-13.8%-5.8%
1 Year23.0%13.0%-23.0%-28.3%2.3%-1.3%
3 Year20.0%3.0%-13.6%-26.8%15.6%3.9%
5 Year24.3%2.8%-12.1%-27.8%20.1%0.06%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Fufeng Group 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

Undervalued: 546 (HK$3.73) is trading below our estimate of fair value (HK$13.59)

Significantly Undervalued: 546 is trading below fair value by more than 20%.


Price Based on Earnings

PE vs Industry: 546 is good value based on its PE Ratio (4x) compared to the Chemicals industry average (6.9x).

PE vs Market: 546 is good value based on its PE Ratio (4x) compared to the Hong Kong market (10.3x).


Price Based on Expected Growth

Low PEG Ratio: 546's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price Based on Value of Assets

PB vs Industry: 546 is good value based on its PB Ratio (0.8x) compared to the HK Chemicals industry average (0.8x).


Next Steps

Future Growth

How is Fufeng Group expected to perform in the next 1 to 3 years based on estimates from 2 analysts?

-11.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: 546's earnings are forecast to decline over the next 3 years (-11.5% per year).

Earnings vs Market: 546's earnings are forecast to decline over the next 3 years (-11.5% per year).

High Growth Earnings: 546's earnings are forecast to decline over the next 3 years.

Revenue vs Market: 546's revenue (9.5% per year) is forecast to grow slower than the Hong Kong market (10.1% per year).

High Growth Revenue: 546's revenue (9.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Estimates


Future Return on Equity

High Future ROE: 546's Return on Equity is forecast to be low in 3 years time (11.2%).


Next Steps

Past Performance

How has Fufeng Group performed over the past 5 years?

27.6%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: 546's earnings have grown significantly by 27.6% per year over the past 5 years.

Accelerating Growth: 546's earnings growth over the past year (103.1%) exceeds its 5-year average (27.6% per year).

Earnings vs Industry: 546 earnings growth over the past year (103.1%) exceeded the Chemicals industry 17.6%.


Return on Equity

High ROE: 546's Return on Equity (19.3%) is considered low.


Return on Assets

ROA vs Industry: 546 has a higher Return on Assets than the Chemicals industry average last year.


Return on Capital Employed

ROCE Improving: 546's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Fufeng Group's financial position?


Financial Position Analysis

Short Term Liabilities: 546's short term assets (CN¥8.4B) exceeds its short term liabilities (CN¥5.4B)

Long Term Liabilities: 546's short term assets (8.4B) exceeds its long term liabilities (3.4B)


Debt to Equity History and Analysis

Debt Level: 546's debt to equity ratio (37.2%) is considered satisfactory

Reducing Debt: 546's debt to equity ratio has reduced from 96.9% to 37.2% over the past 5 years.

Debt Coverage: 546's debt is well covered by operating cash flow (44.1%).

Interest Coverage: 546's interest payments on its debt are well covered by EBIT (8.2x coverage).


Balance Sheet

Inventory Level: 546 has a high level of physical assets or inventory.

Debt Coverage by Assets: 546's debt is covered by short term assets (assets are 2.031290x debt).


Next Steps

Dividend

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

4.67%

Expected Dividend Yield


Dividend Yield vs Market

company8.5%marketbottom25%2.3%markettop25%6.3%industryaverage4.1%forecastin3Years4.7%

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

Notable Dividend: 546's dividend (8.46%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.25%).

High Dividend: 546's dividend (8.46%) is in the top 25% of dividend payers in the Hong Kong market (6.35%)

Stable Dividend: 546's dividend payments have been volatile in the past 10 years.

Growing Dividend: 546's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (33.9%), 546's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 546's dividends in 3 years are forecast to be well covered by earnings (30% payout ratio).


Next Steps

Management

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

2.9yrs

Average management tenure


CEO

Qiang Zhao (51yo)

2.9yrs

Tenure

CN¥6,117,000

Compensation

Mr. Zhao Qiang has been the Chief Executive Officer at Fufeng Group Limited since November 9, 2016 and its Executive Director since June 5, 2017. Mr. Zhao served as the Chief Operation Officer and the Chie ...


CEO Compensation Analysis

Compensation vs. Market: Qiang's total compensation ($USD863.00K) is about average for companies of similar size in the Hong Kong market ($USD492.11K).

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


Management Age and Tenure

2.9yrs

Average Tenure

50yo

Average Age

Experienced Management: 546's management team is considered experienced (2.9 years average tenure).


Board Age and Tenure

2.3yrs

Average Tenure

50yo

Average Age

Experienced Board: 546's board of directors are not considered experienced ( 2.3 years average tenure), which suggests a new board.


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

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Ownership Breakdown


Management Team

  • Wai Lee (49yo)

    Company Secretary

    • Tenure: 11.2yrs
  • Xuechun Li (68yo)

    Principal Founder & Chairman

    • Tenure: 0yrs
    • Compensation: CN¥2.79m
  • Lingguo Xu (45yo)

    Logistic Operations Officer

    • Tenure: 0yrs
  • Fengtang Lai (51yo)

    General Manager of Shandong Fufeng

    • Tenure: 0yrs
  • Deheng Li (51yo)

    Deputy Executive GM & Executive Director

    • Tenure: 12.8yrs
    • Compensation: CN¥1.15m
  • Guangyu Li (41yo)

    Vice GM & Executive Director

    • Tenure: 9.5yrs
    • Compensation: CN¥840.00k
  • Yuan Chen (50yo)

    Chief Financial Officer

    • Tenure: 2.3yrs
    • Compensation: CN¥3.95m
  • Yao Yu (49yo)

    Executive Director

    • Tenure: 0.6yrs
  • Qiang Zhao (51yo)

    CEO & Executive Director

    • Tenure: 2.9yrs
    • Compensation: CN¥6.12m

Board Members

  • Xuechun Li (68yo)

    Principal Founder & Chairman

    • Tenure: 0yrs
    • Compensation: CN¥2.79m
  • Deheng Li (51yo)

    Deputy Executive GM & Executive Director

    • Tenure: 12.8yrs
    • Compensation: CN¥1.15m
  • Vivian Yu (51yo)

    Independent Non Executive Director

    • Tenure: 6.8yrs
    • Compensation: CN¥297.00k
  • Guangyu Li (41yo)

    Vice GM & Executive Director

    • Tenure: 9.5yrs
    • Compensation: CN¥840.00k
  • Yao Yu (49yo)

    Executive Director

    • Tenure: 0.6yrs
  • Zheng Hong Xu (48yo)

    Independent Non-Executive Director

    • Tenure: 0.8yrs
  • Qiang Zhao (51yo)

    CEO & Executive Director

    • Tenure: 2.9yrs
    • Compensation: CN¥6.12m
  • Chung Wai Lau (37yo)

    Independent Non-Executive Director

    • Tenure: 0.3yrs

Company Information

Fufeng Group Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Fufeng Group Limited
  • Ticker: 546
  • Exchange: SEHK
  • Founded: 1999
  • Industry: Diversified Chemicals
  • Sector: Materials
  • Market Cap: HK$9.501b
  • Shares outstanding: 2.53b
  • Website: https://www.fufeng-group.com

Number of Employees


Location

  • Fufeng Group Limited
  • Western Section of Huaihai Road
  • Junan
  • Linyi
  • Shandong Province
  • 276600
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
546SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDFeb 2007
FFO1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURFeb 2007
FFO1MUN (Boerse Muenchen)YesOrdinary SharesDEEURFeb 2007
546SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDFeb 2007
546SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDFeb 2007

Biography

Fufeng Group Limited, an investment holding company, engages in the manufacture and sale of fermentation-based food additive, and biochemical and starch-based products in the People’s Republic of China and ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/14 12:39
End of Day Share Price2019/10/14 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.

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