SEHK:10

Stock Analysis Report

Executive Summary

Hang Lung Group Limited, an investment holding company, operates as a property developer in Hong Kong and Mainland China.

Rewards

Trading at 23% below its fair value

Earnings grew by 0.03% over the past year

Risk Analysis

Unstable dividend track record

Large one-off items impacting financial results



Snowflake Analysis

Undervalued with adequate balance sheet.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 10 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.0%

10

1.8%

HK Real Estate

1.6%

HK Market


1 Year Return

-0.5%

10

8.3%

HK Real Estate

6.0%

HK Market

Return vs Industry: 10 underperformed the Hong Kong Real Estate industry which returned 6.7% over the past year.

Return vs Market: 10 underperformed the Hong Kong Market which returned 6.4% over the past year.


Shareholder returns

10IndustryMarket
7 Day2.0%1.8%1.6%
30 Day8.4%4.6%4.5%
90 Day11.2%10.1%8.8%
1 Year3.2%-0.5%13.1%8.3%9.9%6.0%
3 Year-17.9%-25.5%61.8%44.6%27.7%14.7%
5 Year-33.6%-42.9%73.8%44.3%21.7%1.4%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Hang Lung Group undervalued compared to its fair value and its price relative to the market?

22.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 10 (HK$20.75) is trading below our estimate of fair value (HK$26.94)

Significantly Below Fair Value: 10 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 10 is good value based on its PE Ratio (4.7x) compared to the Real Estate industry average (6.9x).

PE vs Market: 10 is good value based on its PE Ratio (4.7x) compared to the Hong Kong market (10.5x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 10's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 10 is good value based on its PB Ratio (0.3x) compared to the HK Real Estate industry average (0.5x).


Next Steps

Future Growth

How is Hang Lung Group forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

7.0%

Forecasted Real Estate 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 Hang Lung Group 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 Hang Lung Group performed over the past 5 years?

0.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 10 has a large one-off gain of HK$4.7B impacting its June 30 2019 financial results.

Growing Profit Margin: 10's current net profit margins (63.7%) are higher than last year (54.1%).


Past Earnings Growth Analysis

Earnings Trend: 10's earnings have grown by 0.6% per year over the past 5 years.

Accelerating Growth: 10's earnings growth over the past year (0.03%) is below its 5-year average (0.6% per year).

Earnings vs Industry: 10 earnings growth over the past year (0.03%) exceeded the Real Estate industry -9.9%.


Return on Equity

High ROE: 10's Return on Equity (6.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Hang Lung Group's financial position?


Financial Position Analysis

Short Term Liabilities: 10's short term assets (HK$12.3B) exceed its short term liabilities (HK$10.5B).

Long Term Liabilities: 10's short term assets (HK$12.3B) do not cover its long term liabilities (HK$40.5B).


Debt to Equity History and Analysis

Debt Level: 10's debt to equity ratio (22.2%) is considered satisfactory.

Reducing Debt: 10's debt to equity ratio has reduced from 33.5% to 22.2% over the past 5 years.

Debt Coverage: 10's debt is not well covered by operating cash flow (14.7%).

Interest Coverage: 10's interest payments on its debt are well covered by EBIT (23.2x coverage).


Balance Sheet

Inventory Level: 10 has a high level of physical assets or inventory.

Debt Coverage by Assets: 10's debt is not covered by short term assets (assets are 0.4x debt).


Next Steps

Dividend

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

3.83%

Current Dividend Yield


Dividend Yield vs Market

company3.8%marketbottom25%2.2%markettop25%6.0%industryaverage4.1%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: 10's dividend (3.86%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.17%).

High Dividend: 10's dividend (3.86%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.02%).


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (18.3%), 10'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 Hang Lung Group's salary, the management and board of directors tenure and is there insider trading?

5.2yrs

Average board tenure


CEO

Weber Lo (48yo)

1.5yrs

Tenure

HK$33,380,000

Compensation

Mr. Wai Pak Lo, also known as Weber, has been an Executive Director of Hang Lung Group Limited and Hang Lung Properties Limited since joining in May 16, 2018. He serves as Chief Executive Officer of Hang L ...


CEO Compensation Analysis

Compensation vs Market: Weber's total compensation ($USD4.29M) is above average for companies of similar size in the Hong Kong market ($USD567.26K).

Compensation vs Earnings: Insufficient data to compare Weber's compensation with company performance.


Board Age and Tenure

5.2yrs

Average Tenure

67.5yo

Average Age

Experienced Board: 10's board of directors are considered experienced (5.2 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

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Ownership Breakdown

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


Management Team

  • Ronnie Chan (69yo)

    Executive Chairman of the Board

    • Tenure: 29yrs
    • Compensation: HK$39.70m
  • Chuk Fai Kwan (59yo)

    Assistant Director - Corporate Communications

    • Hau Cheong Ho (59yo)

      CFO & Executive Director

      • Tenure: 9.3yrs
      • Compensation: HK$10.20m
    • Weber Lo (48yo)

      CEO & Executive Director

      • Tenure: 1.5yrs
      • Compensation: HK$33.38m
    • Adriel Chan (37yo)

      Executive Director

      • Tenure: 3.2yrs
      • Compensation: HK$10.00m
    • Margaret Yan (53yo)

      Director-General Counsel & Company Secretary


      Board Members

      • Ronnie Chan (69yo)

        Executive Chairman of the Board

        • Tenure: 29yrs
        • Compensation: HK$39.70m
      • Simon Ip (70yo)

        Independent Non-Executive Director

        • Tenure: 21.5yrs
        • Compensation: HK$1.10m
      • George Chang (67yo)

        Non-Executive Director

        • Tenure: 4.8yrs
        • Compensation: HK$900.00k
      • Gerald Chan (68yo)

        Non-Executive Director

        • Tenure: 34yrs
        • Compensation: HK$700.00k
      • Lap-Chee Tsui (68yo)

        Independent Non-Executive Director

        • Tenure: 5.2yrs
        • Compensation: HK$900.00k
      • Pak Wai Liu (71yo)

        Independent Non-Executive Director

        • Tenure: 4.8yrs
        • Compensation: HK$1.00m
      • Hau Cheong Ho (59yo)

        CFO & Executive Director

        • Tenure: 9.3yrs
        • Compensation: HK$10.20m
      • Martin Liao (62yo)

        Independent Non-Executive Director

        • Tenure: 5.2yrs
        • Compensation: HK$800.00k
      • Weber Lo (48yo)

        CEO & Executive Director

        • Tenure: 1.5yrs
        • Compensation: HK$33.38m
      • Adriel Chan (37yo)

        Executive Director

        • Tenure: 3.2yrs
        • Compensation: HK$10.00m

      Company Information

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


      Key Information

      • Name: Hang Lung Group Limited
      • Ticker: 10
      • Exchange: SEHK
      • Founded: 1960
      • Industry: Real Estate Operating Companies
      • Sector: Real Estate
      • Market Cap: HK$28.458b
      • Shares outstanding: 1.36b
      • Website: https://www.hanglung.com/en-US/group/home

      Number of Employees


      Location

      • Hang Lung Group Limited
      • Standard Chartered Bank Building
      • 28th Floor
      • Central
      • Hong Kong

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      HLUDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
      10SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJan 1992
      HNLG.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
      10SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJan 1992
      10SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJan 1992
      HNLG.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDJun 1992

      Biography

      Hang Lung Group Limited, an investment holding company, operates as a property developer in Hong Kong and Mainland China. The company operates through three segments: Property Leasing in Mainland China, Property Leasing in Hong Kong, and Property Sales in Hong Kong. It develops properties for sale and lease, such as large-scale mall/commercial, office, and residential developments. The company also invests in various properties, including retail, office, residential, serviced apartments, and carparks. Its investment properties portfolio includes Grand Gateway 66, a mall/commercial, office, and residential complex, as well as Plaza 66, a commercial and office complex in Shanghai; Parc 66 in Jinan; Center 66 in Wuxi; Riverside 66 in Tianjin; Olympia 66 in Dalian; Palace 66 and Forum 66 in Shenyang; Spring City 66 in Kunming; and Heartland 66 in Wuhan. In addition, the company offers car park and property management, securities trading, management, financial, project management, and property agency services. Hang Lung Group Limited was founded in 1960 and is headquartered in Central, Hong Kong. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/18 12:42
      End of Day Share Price2020/01/17 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.