SEHK:581

Stock Analysis Report

China Oriental Group

Executive Summary

China Oriental Group Company Limited, an investment holding company, manufactures and sells iron and steel products for downstream steel manufacturers in the People’s Republic of China.

Snowflake

Fundamentals

Flawless balance sheet, undervalued and pays a dividend.

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

3.7%

581

1.2%

HK Metals and Mining

2.2%

HK Market


1 Year Return

-53.7%

581

-13.1%

HK Metals and Mining

-1.3%

HK Market

Return vs Industry: 581 underperformed the Hong Kong Metals and Mining industry which returned -13.1% over the past year.

Return vs Market: 581 underperformed the Hong Kong Market which returned -1.3% over the past year.


Share holder returns

581IndustryMarket
7 Day3.7%1.2%2.2%
30 Day-15.8%-6.9%-2.9%
90 Day-33.8%-7.5%-5.8%
1 Year-49.4%-53.7%-10.1%-13.1%2.3%-1.3%
3 Yearn/a-0.1%-6.9%15.6%3.9%
5 Yearn/a-2.5%-13.5%20.1%0.06%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is China Oriental 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: 581 (HK$2.78) is trading below our estimate of fair value (HK$21.34)

Significantly Undervalued: 581 is trading below fair value by more than 20%.


Price Based on Earnings

PE vs Industry: 581 is good value based on its PE Ratio (2.7x) compared to the Metals and Mining industry average (10.7x).

PE vs Market: 581 is good value based on its PE Ratio (2.7x) compared to the Hong Kong market (10.3x).


Price Based on Expected Growth

Low PEG Ratio: 581 is poor value based on its PEG Ratio (4.6x)


Price Based on Value of Assets

PB vs Industry: 581 is good value based on its PB Ratio (0.5x) compared to the HK Metals and Mining industry average (0.7x).


Next Steps

Future Growth

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

0.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: 581's forecast earnings growth (0.6% per year) is below the savings rate (2%).

Earnings vs Market: 581's earnings (0.6% per year) are forecast to grow slower than the Hong Kong market (11.2% per year).

High Growth Earnings: 581's earnings are forecast to grow, but not significantly.

Revenue vs Market: 581's revenue is expected to decline over the next 3 years (-1% per year).

High Growth Revenue: 581's revenue is forecast to decline over the next 3 years (-1%).


Earnings per Share Growth Estimates


Future Return on Equity

High Future ROE: 581's Return on Equity is forecast to be low in 3 years time (13.1%).


Next Steps

Past Performance

How has China Oriental Group performed over the past 5 years?

61.6%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: 581's earnings have grown significantly by 61.6% per year over the past 5 years.

Accelerating Growth: 581's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 581 had negative earnings growth (-41.1%) over the past year, making it difficult to compare to the Metals and Mining industry average (-24.5%).


Return on Equity

High ROE: 581's Return on Equity (18.8%) is considered low.


Return on Assets

ROA vs Industry: 581 has a higher Return on Assets than the Metals and Mining industry average last year.


Return on Capital Employed

ROCE Improving: 581 has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is China Oriental Group's financial position?


Financial Position Analysis

Short Term Liabilities: 581's short term assets (HK$20.1B) exceeds its short term liabilities (HK$12.6B)

Long Term Liabilities: 581's short term assets (HK$20.1B) exceeds its long term liabilities (HK$1.0B)


Debt to Equity History and Analysis

Debt Level: 581's debt to equity ratio (21.2%) is considered satisfactory

Reducing Debt: 581's debt to equity ratio has reduced from 91.2% to 21.2% over the past 5 years.

Debt Coverage: 581's debt is well covered by operating cash flow (147.7%).

Interest Coverage: 581 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 581 has a high level of physical assets or inventory.

Debt Coverage by Assets: 581's debt is covered by short term assets (assets are 5.037770x debt).


Next Steps

Dividend

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

8.46%

Expected Dividend Yield


Dividend Yield vs Market

company9.0%marketbottom25%2.3%markettop25%6.3%industryaverage3.8%forecastin3Years8.5%

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

Notable Dividend: 581's dividend (8.99%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.25%).

High Dividend: 581's dividend (8.99%) is in the top 25% of dividend payers in the Hong Kong market (6.35%)

Stable Dividend: 581's dividend payments have been volatile in the past 10 years.

Growing Dividend: 581's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (20.2%), 581's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 581's dividends in 3 years are forecast to be well covered by earnings (29.6% payout ratio).


Next Steps

Management

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

11.9yrs

Average management tenure


CEO

Jingyuan Han (62yo)

15.9yrs

Tenure

CN¥24,259,000

Compensation

Mr. Jingyuan Han has been the Chairman and Chief Executive Officer of China Oriental Group Co. Ltd. since November 13, 2003. Mr. Han serves as the Chairman of Hebei Jinxi Iron and Steel Company Limited. He ...


CEO Compensation Analysis

Compensation vs. Market: Insufficient data to establish whether Jingyuan's total compensation is reasonable compared to companies of similar size in the Hong Kong market.

Compensation vs Earnings: Jingyuan's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

11.9yrs

Average Tenure

51yo

Average Age

Experienced Management: 581's management team is seasoned and experienced (11.9 years average tenure).


Board Age and Tenure

9.8yrs

Average Tenure

54yo

Average Age

Experienced Board: 581's board of directors are considered experienced (9.8 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

BuyCN¥355,349,99321 May 19
Wellbeing Holdings Limited
EntityCompany
Shares69,000,000
Max PriceCN¥5.15
BuyCN¥9,574,44820 May 19
Wellbeing Holdings Limited
EntityCompany
Shares2,034,000
Max PriceCN¥4.71
BuyCN¥8,715,52820 May 19
Wellbeing Holdings Limited
EntityCompany
Shares1,816,000
Max PriceCN¥4.80
BuyCN¥5,241,01117 May 19
Wellbeing Holdings Limited
EntityCompany
Shares1,150,000
Max PriceCN¥4.56

Ownership Breakdown


Management Team

  • Jun Zhu (55yo)

    COO, Executive Deputy GM & Executive Director

    • Tenure: 15.8yrs
    • Compensation: CN¥8.07m
  • Hao Zhu (52yo)

    Executive Director

    • Tenure: 11.9yrs
    • Compensation: CN¥1.56m
  • Xiaoling Shen (58yo)

    Executive Director

    • Tenure: 14.3yrs
    • Compensation: CN¥4.64m
  • Jingyuan Han (62yo)

    Chairman & CEO

    • Tenure: 15.9yrs
    • Compensation: CN¥24.26m
  • Jianshui Yu (51yo)

    GM of Hebei Jinxi Iron & Steel Group Special Steel Company Limited

    • Tenure: 0yrs
    • Compensation: CN¥488.00k
  • Sanjay Sharma (47yo)

    Executive Director

    • Tenure: 0.08yrs
  • Li Han (32yo)

    CFO, Deputy GM & Executive Director

    • Tenure: 7.7yrs
    • Compensation: CN¥5.51m
  • Lifeng Yu (42yo)

    Deputy Chairman of Legal Representative & GM of Jinxi Limited

    • Tenure: 0yrs
  • Pak Kan Lam (39yo)

    Financial Controller & Company Secretary

    • Tenure: 0yrs

Board Members

  • Francis Wong (54yo)

    Independent Non-Executive Director

    • Tenure: 15.2yrs
    • Compensation: CN¥685.00k
  • Jun Zhu (55yo)

    COO, Executive Deputy GM & Executive Director

    • Tenure: 15.8yrs
    • Compensation: CN¥8.07m
  • Hao Zhu (52yo)

    Executive Director

    • Tenure: 11.9yrs
    • Compensation: CN¥1.56m
  • Xiaoling Shen (58yo)

    Executive Director

    • Tenure: 14.3yrs
    • Compensation: CN¥4.64m
  • Jingyuan Han (62yo)

    Chairman & CEO

    • Tenure: 15.9yrs
    • Compensation: CN¥24.26m
  • Ondra Otradovec (50yo)

    Non-Executive Director

    • Tenure: 4.8yrs
    • Compensation: CN¥342.00k
  • Tianyi Wang (72yo)

    Independent Non-Executive Director

    • Tenure: 7.7yrs
    • Compensation: CN¥342.00k
  • Sanjay Sharma (47yo)

    Executive Director

    • Tenure: 0.08yrs
  • Li Han (32yo)

    CFO, Deputy GM & Executive Director

    • Tenure: 7.7yrs
    • Compensation: CN¥5.51m
  • Bing Wang (54yo)

    Independent Non-Executive Director

    • Tenure: 3.3yrs
    • Compensation: CN¥342.00k

Company Information

China Oriental Group Company Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: China Oriental Group Company Limited
  • Ticker: 581
  • Exchange: SEHK
  • Founded: 2003
  • Industry: Steel
  • Sector: Materials
  • Market Cap: HK$10.349b
  • Shares outstanding: 3.72b
  • Website: https://www.chinaorientalgroup.com

Number of Employees


Location

  • China Oriental Group Company Limited
  • Great Eagle Centre
  • 9th Floor
  • Wanchai
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CUGC.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMar 2004
581SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDMar 2004
ORGDB (Deutsche Boerse AG)YesOrdinary SharesDEEURMar 2004
581SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDMar 2004
581SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDMar 2004
CUGC.YOTCPK (Pink Sheets LLC)ADRUSUSDNov 2008

Biography

China Oriental Group Company Limited, an investment holding company, manufactures and sells iron and steel products for downstream steel manufacturers in the People’s Republic of China. The company operate ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/13 12:39
End of Day Share Price2019/10/11 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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