SEHK:746

Stock Analysis Report

Executive Summary

Lee & Man Chemical Company Limited, an investment holding company, manufactures and sells chemical products in the People’s Republic of China and Hong Kong.

Snowflake

Fundamentals

Excellent balance sheet, good value and pays a dividend.

Share Price & News

How has Lee & Man Chemical's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

0.3%

746

-0.4%

HK Chemicals

0.3%

HK Market


1 Year Return

-28.0%

746

-28.4%

HK Chemicals

1.3%

HK Market

Return vs Industry: 746 matched the Hong Kong Chemicals industry which returned -28.4% over the past year.

Return vs Market: 746 underperformed the Hong Kong Market which returned 1.3% over the past year.


Shareholder returns

746IndustryMarket
7 Day0.3%-0.4%0.3%
30 Day-0.8%-3.8%0.5%
90 Day-8.3%-14.7%-4.6%
1 Year-22.1%-28.0%-23.1%-28.4%4.9%1.3%
3 Year84.3%53.5%-15.4%-28.5%15.3%3.7%
5 Year1.0%-22.2%-7.0%-23.6%20.0%-0.006%

Price Volatility Vs. Market

How volatile is Lee & Man Chemical's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Lee & Man Chemical 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: 746 (HK$3.76) is trading below our estimate of fair value (HK$18.29)

Significantly Below Fair Value: 746 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 746 is good value based on its PE Ratio (4.3x) compared to the Chemicals industry average (6.9x).

PE vs Market: 746 is good value based on its PE Ratio (4.3x) compared to the Hong Kong market (10.3x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 746's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 746 is overvalued based on its PB Ratio (0.8x) compared to the HK Chemicals industry average (0.7x).


Next Steps

Future Growth

How is Lee & Man Chemical forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

-2.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 746's earnings are forecast to decline over the next 3 years (-2% per year).

Earnings vs Market: 746's earnings are forecast to decline over the next 3 years (-2% per year).

High Growth Earnings: 746's earnings are forecast to decline over the next 3 years.

Revenue vs Market: Insufficient data to determine if 746's revenue is forecast to grow faster than the Hong Kong market.

High Growth Revenue: Insufficient data to determine if 746's revenue is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if 746's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Lee & Man Chemical performed over the past 5 years?

28.6%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: 746's earnings have grown significantly by 28.6% per year over the past 5 years.

Accelerating Growth: 746's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 746 had negative earnings growth (-27.7%) over the past year, making it difficult to compare to the Chemicals industry average (12.4%).


Return on Equity

High ROE: 746's Return on Equity (19.4%) is considered low.


Return on Assets

ROA vs Industry: 746 has a higher Return on Assets than the Chemicals industry average last year.


Return on Capital Employed

ROCE Improving: 746 has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Lee & Man Chemical's financial position?


Financial Position Analysis

Short Term Liabilities: 746's short term assets (HK$1.7B) exceeds its short term liabilities (HK$1.6B)

Long Term Liabilities: 746's short term assets (1.7B) exceeds its long term liabilities (889.1M)


Debt to Equity History and Analysis

Debt Level: 746's debt to equity ratio (49.4%) is considered high

Reducing Debt: 746's debt to equity ratio has reduced from 84.1% to 49.4% over the past 5 years.

Debt Coverage: 746's debt is well covered by operating cash flow (77.1%).

Interest Coverage: 746's interest payments on its debt are well covered by EBIT (11.5x coverage).


Balance Sheet

Inventory Level: 746 has a high level of physical assets or inventory.

Debt Coverage by Assets: 746's debt is not covered by short term assets (assets are 0.9x debt).


Next Steps

Dividend

What is Lee & Man Chemical's current dividend yield, its reliability and sustainability?

10.11%

Current Dividend Yield


Dividend Yield vs Market

company10.1%marketbottom25%2.3%markettop25%6.2%industryaverage8.9%forecastin3Yearsn/a

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: 746's dividend (10.11%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.26%).

High Dividend: 746's dividend (10.11%) is in the top 25% of dividend payers in the Hong Kong market (6.18%)

Stable Dividend: 746's dividend payments have been volatile in the past 10 years.

Growing Dividend: 746's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (37.4%), 746's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

What is the CEO of Lee & Man Chemical's salary, the management and board of directors tenure and is there insider trading?

9.3yrs

Average board tenure


CEO

Man Yan Lee (41yo)

5.2yrs

Tenure

HK$35,047,000

Compensation

Mr. Man Yan Lee has been the Chief Executive Officer of Lee & Man Chemical Company Limited since August 1, 2014. Mr. Lee has been an Executive Director of Lee & Man Chemical Company Limited and Lee & Man H ...


CEO Compensation Analysis

Compensation vs. Market: Man Yan's total compensation ($USD4.47M) is about average for companies of similar size in the Hong Kong market ($USD307.53K).

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


Board Age and Tenure

9.3yrs

Average Tenure

68yo

Average Age

Experienced Board: 746's board of directors are considered experienced (9.3 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$4,908,11511 Apr 19
Value Partners Hong Kong Limited
EntityCompany
Shares940,000
Max PriceHK$5.22
SellHK$647,27711 Mar 19
Value Partners Hong Kong Limited
EntityCompany
Shares118,000
Max PriceHK$5.49

Ownership Breakdown


Management Team

  • Siu Kee Wai (74yo)

    Chairman of the Board

    • Tenure: 0yrs
    • Compensation: HK$10.88m
  • Kwok Keung Cheung (52yo)

    Company Secretary

    • Tenure: 3.2yrs
  • Man Yan Lee (41yo)

    Group CEO & Executive Director

    • Tenure: 5.2yrs
    • Compensation: HK$35.05m
  • Hiu Fung Lam (48yo)

    Group Financial Controller

    • Tenure: 0yrs
  • Dan Hui (64yo)

    Deputy General Manager of Jiangsu Lee & Man Chemical Limited

    • Tenure: 0yrs
  • Zuo Ning Yang (57yo)

    Executive Director of the Group and GM of Jiangxi Lee & Man Chemical Limited

    • Tenure: 8.3yrs
    • Compensation: HK$1.02m
  • Albert Chan (68yo)

    Chief Strategist & Executive Director

    • Tenure: 3.4yrs
    • Compensation: HK$5.03m

Board Members

  • Siu Kee Wai (74yo)

    Chairman of the Board

    • Tenure: 0yrs
    • Compensation: HK$10.88m
  • Aaron Wan (69yo)

    Independent Non-Executive Director

    • Tenure: 0yrs
    • Compensation: HK$169.00k
  • Tony Wong (76yo)

    Independent Non-Executive Director

    • Tenure: 15.2yrs
    • Compensation: HK$169.00k
  • Man Yan Lee (41yo)

    Group CEO & Executive Director

    • Tenure: 5.2yrs
    • Compensation: HK$35.05m
  • Victor Heng (42yo)

    Independent Non Executive Director

    • Tenure: 9.3yrs
    • Compensation: HK$169.00k
  • Zuo Ning Yang (57yo)

    Executive Director of the Group and GM of Jiangxi Lee & Man Chemical Limited

    • Tenure: 8.3yrs
    • Compensation: HK$1.02m
  • Albert Chan (68yo)

    Chief Strategist & Executive Director

    • Tenure: 3.4yrs
    • Compensation: HK$5.03m

Company Information

Lee & Man Chemical Company Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Lee & Man Chemical Company Limited
  • Ticker: 746
  • Exchange: SEHK
  • Founded: 1976
  • Industry: Commodity Chemicals
  • Sector: Materials
  • Market Cap: HK$3.061b
  • Shares outstanding: 825.00m
  • Website: https://www.leemanchemical.com

Number of Employees


Location

  • Lee & Man Chemical Company Limited
  • Liven House
  • 8th Floor
  • Kwun Tong
  • Kowloon
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
746SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJan 2002

Biography

Lee & Man Chemical Company Limited, an investment holding company, manufactures and sells chemical products in the People’s Republic of China and Hong Kong. It offers polymers, including polytetrafluoroeth ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/23 12:36
End of Day Share Price2019/10/23 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.