SEHK:1638

Stock Analysis Report

Executive Summary

Kaisa Group Holdings Ltd., an investment holding company, engages in the property investment, development, and management businesses in the People’s Republic of China.

Rewards

Trading at 9% below its fair value

Earnings are forecast to grow 21.82% per year

Earnings grew by 25.3% over the past year

Risk Analysis

Debt is not well covered by operating cash flow

Unstable dividend track record

Highly volatile share price over past 3 months

Large one-off items impacting financial results

+ 2 more risks


Snowflake Analysis

High growth potential and good value.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 1638's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

13.0%

1638

5.4%

HK Real Estate

4.0%

HK Market


1 Year Return

-24.2%

1638

-26.2%

HK Real Estate

-20.1%

HK Market

Return vs Industry: 1638 exceeded the Hong Kong Real Estate industry which returned -26.2% over the past year.

Return vs Market: 1638 underperformed the Hong Kong Market which returned -20.1% over the past year.


Shareholder returns

1638IndustryMarket
7 Day13.0%5.4%4.0%
30 Day-23.9%-13.4%-11.3%
90 Day-25.4%-18.9%-15.6%
1 Year-21.6%-24.2%-22.8%-26.2%-17.2%-20.1%
3 Year5.8%-1.8%15.5%3.0%-2.9%-12.7%
5 Year86.5%73.1%33.9%11.1%-6.8%-21.8%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Kaisa Group Holdings undervalued compared to its fair value and its price relative to the market?

9.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 1638 (HK$2.7) is trading below our estimate of fair value (HK$2.97)

Significantly Below Fair Value: 1638 is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: 1638 is good value based on its PE Ratio (3.9x) compared to the Real Estate industry average (6.3x).

PE vs Market: 1638 is good value based on its PE Ratio (3.9x) compared to the Hong Kong market (9x).


Price to Earnings Growth Ratio

PEG Ratio: 1638 is good value based on its PEG Ratio (0.2x)


Price to Book Ratio

PB vs Industry: 1638 is overvalued based on its PB Ratio (0.6x) compared to the HK Real Estate industry average (0.4x).


Next Steps

Future Growth

How is Kaisa Group Holdings forecast to perform in the next 1 to 3 years based on estimates from 2 analysts?

21.8%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1638's forecast earnings growth (21.8% per year) is above the savings rate (1.6%).

Earnings vs Market: 1638's earnings (21.8% per year) are forecast to grow faster than the Hong Kong market (12.8% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 1638's revenue (22.5% per year) is forecast to grow faster than the Hong Kong market (9.1% per year).

High Growth Revenue: 1638's revenue (22.5% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 1638's Return on Equity is forecast to be low in 3 years time (19%).


Next Steps

Past Performance

How has Kaisa Group Holdings performed over the past 5 years?

54.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1638 has a large one-off gain of CN¥1.7B impacting its June 30 2019 financial results.

Growing Profit Margin: 1638's current net profit margins (8.9%) are higher than last year (7.9%).


Past Earnings Growth Analysis

Earnings Trend: 1638's earnings have grown significantly by 54.3% per year over the past 5 years.

Accelerating Growth: 1638's earnings growth over the past year (25.3%) is below its 5-year average (54.3% per year).

Earnings vs Industry: 1638 earnings growth over the past year (25.3%) exceeded the Real Estate industry -2.9%.


Return on Equity

High ROE: 1638's Return on Equity (8.6%) is considered low.


Next Steps

Financial Health

How is Kaisa Group Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 1638's short term assets (CN¥180.8B) exceed its short term liabilities (CN¥115.3B).

Long Term Liabilities: 1638's short term assets (CN¥180.8B) exceed its long term liabilities (CN¥98.8B).


Debt to Equity History and Analysis

Debt Level: 1638's debt to equity ratio (257.6%) is considered high.

Reducing Debt: 1638's debt to equity ratio has increased from 117.7% to 257.6% over the past 5 years.

Debt Coverage: 1638's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: 1638's interest payments on its debt are well covered by EBIT (13x coverage).


Balance Sheet

Inventory Level: 1638 has a high level of physical assets or inventory.

Debt Coverage by Assets: 1638's debt is covered by short term assets (assets are 1.6x debt).


Next Steps

Dividend

What is Kaisa Group Holdings's current dividend yield, its reliability and sustainability?

4.29%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 1638's dividend (4.29%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.67%).

High Dividend: 1638's dividend (4.29%) is low compared to the top 25% of dividend payers in the Hong Kong market (7.33%).


Stability and Growth of Payments

Stable Dividend: 1638 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 1638 has only been paying a dividend for 6 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (16.5%), 1638's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 1638's dividends in 3 years are forecast to be well covered by earnings (24.4% payout ratio).


Next Steps

Management

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

1.8yrs

Average management tenure


CEO

Yi Zheng (38yo)

no data

Tenure

CN¥54,434,000

Compensation

Mr. Yi Zheng serves as Chief Executive Officer of Kaisa Group Holdings Ltd. He has been an Executive Director of Kaisa Group Holdings Ltd. since April 13, 2015. He was the Group President of Kaisa Group Ho ...


CEO Compensation Analysis

Compensation vs Market: Yi's total compensation ($USD7.67M) is above average for companies of similar size in the Hong Kong market ($USD446.01K).

Compensation vs Earnings: Yi's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Ying Shing Kwok
Founder & Chairman4.92yrsCN¥6.16m21.49% CN¥3.5b
Yi Zheng
CEO & Executive Directorno dataCN¥54.43mno data
Fan Mai
CEO & Executive Director2.67yrsCN¥13.42m0.019% CN¥3.1m
Yuenan Sun
Vice Chairman5.17yrsCN¥29.06mno data
Jianjun Zhang
Senior Consultant1.17yrsCN¥14.83mno data
Haiming Li
Executive President1.17yrsno datano data
Hao Weng
Co-President & Executive Director1.17yrsno datano data
Lau Keung
Chief Financial Officer1.75yrsno datano data
Joanne Mo
Corporate Finance & IRno datano datano data
Bin Wan
Executive Vice President3.42yrsno datano data

1.8yrs

Average Tenure

43yo

Average Age

Experienced Management: 1638's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Ying Shing Kwok
Founder & Chairman4.92yrsCN¥6.16m21.49% CN¥3.5b
Yi Zheng
CEO & Executive Directorno dataCN¥54.43mno data
Fan Mai
CEO & Executive Director2.67yrsCN¥13.42m0.019% CN¥3.1m
Yuenan Sun
Vice Chairman5.17yrsCN¥29.06mno data
Hao Weng
Co-President & Executive Director1.17yrsno datano data
Yizhao Zhang
Independent Non-Executive Director10.33yrsCN¥1.06mno data
Xuesheng Liu
Independent Non-Executive Director3.08yrsCN¥947.00kno data
Yong Rao
Independent Non-Executive Director10.33yrsCN¥1.06mno data
Shaohuan Chen
Non-Executive Director6.25yrsCN¥255.00kno data

4.9yrs

Average Tenure

54yo

Average Age

Experienced Board: 1638's board of directors are considered experienced (4.9 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: 1638 insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.5%.


Top Shareholders

Company Information

Kaisa Group Holdings Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Kaisa Group Holdings Ltd.
  • Ticker: 1638
  • Exchange: SEHK
  • Founded: 1999
  • Industry: Real Estate Development
  • Sector: Real Estate
  • Market Cap: HK$16.467b
  • Shares outstanding: 6.10b
  • Website: https://www.kaisagroup.com

Number of Employees


Location

  • Kaisa Group Holdings Ltd.
  • Kerry Center
  • Room 3306
  • Shenzhen
  • Guangdong Province
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1638SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDDec 2009
1638SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDDec 2009
1638SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDDec 2009

Biography

Kaisa Group Holdings Ltd., an investment holding company, engages in the property investment, development, and management businesses in the People’s Republic of China. It develops villas, townhouses, residential and commercial buildings, and office buildings. The company is also involved in the hotel and catering, cinema, and department stores and cultural center operations, as well as waterway passenger and cargo transportation, and healthcare business. In addition, it offers commerce management and construction engineering services. The company serves in wealth management, urban renewal, culture and sport, tourism, hotel and catering, property service, marine transport, health medical, technology, tea, and education industries, as well as apartments and offices, and football clubs. Kaisa Group Holdings Ltd. was founded in 1999 and is headquartered in Shenzhen, the People’s Republic of China. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/28 13:28
End of Day Share Price2020/03/27 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.