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.

Risks

  • China Oriental Group has significant price volatility in the past 3 months.

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

-4.2%

SEHK:581

0.5%

HK Metals and Mining

2.2%

HK Market


1 Year Return

-50.7%

SEHK:581

-19.8%

HK Metals and Mining

-11.1%

HK Market

581 underperformed the Metals and Mining industry which returned -19.8% over the past year.

581 underperformed the Market in Hong Kong which returned -11.1% over the past year.


Share holder returns

581IndustryMarket
7 Day-4.2%0.5%2.2%
30 Day-28.7%-8.9%-7.3%
90 Day-35.1%-4.9%-4.8%
1 Year-46.8%-50.7%-17.0%-19.8%-7.9%-11.1%
3 Yearn/a-0.8%-3.5%15.5%4.1%
5 Yearn/a-5.0%-15.3%10.0%-8.2%

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

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

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


Price Based on Earnings

China Oriental Group is good value based on earnings compared to the HK Metals and Mining industry average.

China Oriental Group is good value based on earnings compared to the Hong Kong market.


Price Based on Expected Growth

China Oriental Group earnings are not expected to grow next year, we can't assess if its growth is good value.


Price Based on Value of Assets

China Oriental Group is good value based on assets compared to the HK Metals and Mining industry average.


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?

-14.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

China Oriental Group's revenue is expected to decrease over the next 1-3 years, this is not considered high growth.

China Oriental Group's earnings are expected to decrease over the next 1-3 years, this is not considered high growth.

China Oriental Group's revenues are expected to decrease over the next 1-3 years, this is below the Hong Kong market average.

China Oriental Group's earnings are expected to decrease over the next 1-3 years, this is below the Hong Kong market average.

China Oriental Group's earnings are expected to decrease over the next 1-3 years, this is below the low risk savings rate of 2%.


Earnings per Share Growth Estimates


Future Return on Equity

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


Next Steps

Past Performance

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

71.5%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

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

China Oriental Group's 1-year earnings growth is negative, it can't be compared to the 5-year average.

China Oriental Group's 1-year earnings growth is negative, it can't be compared to the HK Metals and Mining industry average.


Return on Equity

China Oriental Group has efficiently used shareholders’ funds last year (Return on Equity greater than 20%).


Return on Assets

China Oriental Group used its assets more efficiently than the HK Metals and Mining industry average last year based on Return on Assets.


Return on Capital Employed

China Oriental Group has become profitable over the past 3 years. This is considered to be a significant improvement in its use of capital (Return on Capital Employed).


Next Steps

Financial Health

How is China Oriental Group's financial position?


Financial Position Analysis

China Oriental Group is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.

China Oriental Group's cash and other short term assets cover its long term commitments.


Debt to Equity History and Analysis

China Oriental Group's level of debt (14.7%) 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 (81.3% vs 14.7% today).

Debt is well covered by operating cash flow (312.6%, greater than 20% of total debt).

China Oriental Group earns more interest than it pays, coverage of interest payments is not a concern.


Balance Sheet

High level of physical assets or inventory.

Debt is covered by short term assets, assets are 7.3x debt.


Next Steps

Dividend

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

7.83%

Expected Dividend Yield


Dividend Yield and Payments Analysis

China Oriental Group's pays a higher dividend yield than the bottom 25% of dividend payers in Hong Kong (2.27%).

China Oriental Group's dividend is above the markets top 25% of dividend payers in Hong Kong (6.18%).

China Oriental Group 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 China Oriental Group only paid a dividend in the past 9 years.


Current Payout to Shareholders

Dividends paid are well covered by earnings (5x coverage).


Future Payout to Shareholders

Dividends after 3 years are expected to be well covered by earnings (3.5x coverage).


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?

12.9yrs

Average management tenure


CEO

Jingyuan Han (62yo)

15.8yrs

Tenure

CN¥71,749,000

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

Jingyuan's remuneration is higher than average for companies of similar size in Hong Kong.

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


Management Age and Tenure

12.9yrs

Average Tenure

51.5yo

Average Age

The average tenure for the China Oriental Group management team is over 5 years, this suggests they are a seasoned and experienced team.


Board Age and Tenure

11.8yrs

Average Tenure

54yo

Average Age

The average tenure for the China Oriental Group board of directors is over 10 years, this suggests they are a seasoned and experienced board.


Insider Trading

No 3 month open market individual insider trading information.


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Ownership Breakdown


Management Team

  • Jun Zhu (55yo)

    COO, Executive Deputy GM & Executive Director

    • Tenure: 15.7yrs
    • Compensation: CN¥23.51m
  • Hao Zhu (52yo)

    Executive Director

    • Tenure: 11.8yrs
    • Compensation: CN¥3.30m
  • Xiaoling Shen (58yo)

    Executive Director

    • Tenure: 14.1yrs
    • Compensation: CN¥13.23m
  • Jingyuan Han (62yo)

    Chairman & CEO

    • Tenure: 15.8yrs
    • Compensation: CN¥71.75m
  • Jianshui Yu (51yo)

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

    • Tenure: 0.0yrs
    • Compensation: CN¥488.00k
  • Li Han (32yo)

    CFO, Deputy GM & Executive Director

    • Tenure: 7.5yrs
    • Compensation: CN¥15.84m
  • Lifeng Yu (42yo)

    Deputy Chairman of Legal Representative & GM of Jinxi Limited

    • Tenure: 0.0yrs
  • Pak Kan Lam (39yo)

    Financial Controller & Company Secretary

    • Tenure: 0.0yrs

Board Members

  • Francis Wong (54yo)

    Independent Non-Executive Director

    • Tenure: 15.0yrs
    • Compensation: CN¥685.00k
  • Jun Zhu (55yo)

    COO, Executive Deputy GM & Executive Director

    • Tenure: 15.7yrs
    • Compensation: CN¥23.51m
  • Hao Zhu (52yo)

    Executive Director

    • Tenure: 11.8yrs
    • Compensation: CN¥3.30m
  • Xiaoling Shen (58yo)

    Executive Director

    • Tenure: 14.1yrs
    • Compensation: CN¥13.23m
  • Jingyuan Han (62yo)

    Chairman & CEO

    • Tenure: 15.8yrs
    • Compensation: CN¥71.75m
  • Ondra Otradovec (50yo)

    Non-Executive Director

    • Tenure: 4.6yrs
    • Compensation: CN¥342.00k
  • Tianyi Wang (72yo)

    Independent Non-Executive Director

    • Tenure: 7.5yrs
    • Compensation: CN¥342.00k
  • Li Han (32yo)

    CFO, Deputy GM & Executive Director

    • Tenure: 7.5yrs
    • Compensation: CN¥15.84m
  • Bing Wang (54yo)

    Independent Non-Executive Director

    • Tenure: 3.1yrs
    • 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$11.242b
  • 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 Analysis2019/08/23 12:39
End of Day Share Price2019/08/23 00:00
Earnings2018/12/31
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.