SEHK:797

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Executive Summary

7Road Holdings Limited, an investment holding company, develops and distributes web games and mobile games in the People’s Republic of China and internationally. More Details


Snowflake Analysis

Excellent balance sheet with poor track record.

Share Price & News

How has 7Road Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 797 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.1%

797

-3.0%

HK Entertainment

1.2%

HK Market


1 Year Return

1.1%

797

0.4%

HK Entertainment

2.3%

HK Market

Return vs Industry: 797 matched the Hong Kong Entertainment industry which returned 0.4% over the past year.

Return vs Market: 797 underperformed the Hong Kong Market which returned 2.3% over the past year.


Shareholder returns

797IndustryMarket
7 Day-1.1%-3.0%1.2%
30 Day3.4%-1.9%7.0%
90 Day4.1%-0.2%3.6%
1 Year1.1%1.1%1.5%0.4%6.6%2.3%
3 Yearn/a-33.2%-35.8%-4.7%-15.1%
5 Yearn/a-52.4%-54.0%19.1%-1.1%

Price Volatility Vs. Market

How volatile is 7Road Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is 7Road Holdings undervalued compared to its fair value and its price relative to the market?

84.83x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 797 (HK$2.77) is trading above our estimate of fair value (HK$0.29)

Significantly Below Fair Value: 797 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 797 is poor value based on its PE Ratio (84.8x) compared to the HK Entertainment industry average (11.2x).

PE vs Market: 797 is poor value based on its PE Ratio (84.8x) compared to the Hong Kong market (11.1x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 797's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 797 is overvalued based on its PB Ratio (5.5x) compared to the HK Entertainment industry average (1.3x).


Next Steps

Future Growth

How is 7Road Holdings forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

45.9%

Forecasted Media industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as 7Road Holdings has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has 7Road Holdings performed over the past 5 years?

-40.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 797 has a large one-off loss of CN¥125.3M impacting its June 30 2020 financial results.

Growing Profit Margin: 797 became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: 797's earnings have declined by 40.4% per year over the past 5 years.

Accelerating Growth: 797 has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: 797 has become profitable in the last year, making it difficult to compare its past year earnings growth to the Entertainment industry (6%).


Return on Equity

High ROE: 797's Return on Equity (6.3%) is considered low.


Next Steps

Financial Health

How is 7Road Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 797's short term assets (CN¥559.6M) exceed its short term liabilities (CN¥463.4M).

Long Term Liabilities: 797's short term assets (CN¥559.6M) exceed its long term liabilities (CN¥169.1M).


Debt to Equity History and Analysis

Debt Level: 797's debt to equity ratio (4.8%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if 797's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: 797's debt is well covered by operating cash flow (119.4%).

Interest Coverage: 797 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

What is 7Road Holdings's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate 797's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate 797's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if 797's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if 797's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: 797 is not paying a notable dividend for the Hong Kong market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 797's dividend in 3 years as they are not forecast to pay a notable one for the Hong Kong market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.6yrs

Average management tenure


CEO

Cheng Peng (38 yo)

1.08yrs

Tenure

Mr. Cheng Peng serves as Chief Executive Officer at 7Road Holdings Limited from September 1, 2019. Mr. Peng has substantial experience in online game industry and had successfully led the development of a ...


Leadership Team

NamePositionTenureCompensationOwnership
Shuqi Meng
Executive Chairman of the Boardno dataCN¥648.00k20.19%
CN¥ 1.5b
Zhengquan Li
CFO, Executive Director & Joint Company Secretary1.5yrsCN¥1.22mno data
Min Hu
Chief Production Officerno dataCN¥367.00k15.69%
CN¥ 1.1b
Cheng Yang
VP & Executive Director2yrsCN¥1.26mno data
Cheng Peng
Chief Executive Officer1.08yrsno datano data
Hua Guo
Head of Testing Department7.33yrsno datano data
Shuanghua Shi
Head of the Arts Department6.33yrsno datano data
Jing Xu
Head of the Business Management Department6.58yrsno datano data
Kai Cheong Cheung
Joint Company Secretary2.58yrsno datano data

2.6yrs

Average Tenure

39yo

Average Age

Experienced Management: 797's management team is considered experienced (2.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Shuqi Meng
Executive Chairman of the Boardno dataCN¥648.00k20.19%
CN¥ 1.5b
Zhengquan Li
CFO, Executive Director & Joint Company Secretary1.5yrsCN¥1.22mno data
Cheng Yang
VP & Executive Director2yrsCN¥1.26mno data
Ying Wang
Independent Non-Executive Director1.17yrsCN¥72.00kno data
Jun Xue
Independent Non-Executive Director1.83yrsCN¥277.00kno data
Yiqing Li
Independent Non-Executive Director1.08yrsCN¥44.00kno data

1.5yrs

Average Tenure

44.5yo

Average Age

Experienced Board: 797's board of directors are not considered experienced ( 1.5 years average tenure), which suggests a new board.


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

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


Top Shareholders

Company Information

7Road Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: 7Road Holdings Limited
  • Ticker: 797
  • Exchange: SEHK
  • Founded: 2008
  • Industry: Interactive Home Entertainment
  • Sector: Media
  • Market Cap: HK$7.256b
  • Shares outstanding: 2.62b
  • Website: https://www.7road.com

Number of Employees


Location

  • 7Road Holdings Limited
  • No. 2-­18-­1902
  • Long Shan Road
  • Wuxi
  • Jiangsu Province
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
797SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJul 2018

Biography

7Road Holdings Limited, an investment holding company, develops and distributes web games and mobile games in the People’s Republic of China and internationally. It researches, develops, operates, and lice ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/10/25 12:47
End of Day Share Price2020/10/23 00:00
Earnings2020/06/30
Annual Earnings2019/12/31


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.