SEHK:1668

Stock Analysis Report

China South City Holdings

Executive Summary

China South City Holdings Limited, together with its subsidiaries, develops and operates integrated logistics and trade centers in the People’s Republic of China.

Snowflake

Fundamentals

Very undervalued with high growth potential.

Share Price & News

How has China South City Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

2.2%

1668

1.9%

HK Real Estate

2.2%

HK Market


1 Year Return

-15.2%

1668

6.9%

HK Real Estate

-1.3%

HK Market

Return vs Industry: 1668 underperformed the Hong Kong Real Estate industry which returned 6.9% over the past year.

Return vs Market: 1668 underperformed the Hong Kong Market which returned -1.3% over the past year.


Share holder returns

1668IndustryMarket
7 Day2.2%1.9%2.2%
30 Day-11.2%-1.9%-2.9%
90 Day-15.9%-11.3%-5.8%
1 Year-10.9%-15.2%11.0%6.9%2.3%-1.3%
3 Year-32.9%-40.3%37.6%23.3%15.6%3.9%
5 Year-67.1%-73.5%59.6%34.0%20.1%0.06%

Price Volatility Vs. Market

How volatile is China South City Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is China South City Holdings 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

Undervalued: 1668 (HK$0.95) is trading below our estimate of fair value (HK$12.6)

Significantly Undervalued: 1668 is trading below fair value by more than 20%.


Price Based on Earnings

PE vs Industry: 1668 is good value based on its PE Ratio (2.4x) compared to the Real Estate industry average (6.1x).

PE vs Market: 1668 is good value based on its PE Ratio (2.4x) compared to the Hong Kong market (10.3x).


Price Based on Expected Growth

Low PEG Ratio: 1668 is good value based on its PEG Ratio (0.1x)


Price Based on Value of Assets

PB vs Industry: 1668 is good value based on its PB Ratio (0.2x) compared to the HK Real Estate industry average (0.5x).


Next Steps

Future Growth

How is China South City Holdings expected to perform in the next 1 to 3 years based on estimates from 2 analysts?

38.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Estimates


Future Annual Growth Analysis

Earnings vs Savings Rate: 1668's forecast earnings growth (38% per year) is above the savings rate (2%).

Earnings vs Market: 1668's earnings (38% per year) are forecast to grow faster than the Hong Kong market (11.2% per year).

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

Revenue vs Market: 1668's revenue (33.1% per year) is forecast to grow faster than the Hong Kong market (10.1% per year).

High Growth Revenue: 1668's revenue (33.1% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Estimates


Future Return on Equity

High Future ROE: 1668's Return on Equity is forecast to be low in 3 years time (14.8%).


Next Steps

Past Performance

How has China South City Holdings performed over the past 5 years?

3.7%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: 1668's earnings have grown by 3.7% per year over the past 5 years.

Accelerating Growth: 1668's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 1668 had negative earnings growth (-27.9%) over the past year, making it difficult to compare to the Real Estate industry average (-12.4%).


Return on Equity

High ROE: 1668's Return on Equity (9%) is considered low.


Return on Assets

ROA vs Industry: 1668 has a higher Return on Assets than the Real Estate industry average last year.


Return on Capital Employed

ROCE Improving: 1668 has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is China South City Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 1668's short term assets (HK$53.2B) exceeds its short term liabilities (HK$48.9B)

Long Term Liabilities: 1668's short term assets (53.2B) exceeds its long term liabilities (28.1B)


Debt to Equity History and Analysis

Debt Level: 1668's debt to equity ratio (94.8%) is considered high

Reducing Debt: 1668's debt to equity ratio has increased from 87% to 94.8% over the past 5 years.

Debt Coverage: 1668's debt is well covered by operating cash flow (20.9%).

Interest Coverage: 1668's interest payments on its debt are well covered by EBIT (5.5x coverage).


Balance Sheet

Inventory Level: 1668 has a high level of physical assets or inventory.

Debt Coverage by Assets: 1668's debt is covered by short term assets (assets are 1.553770x debt).


Next Steps

Dividend

What is China South City Holdings's current dividend yield, its reliability and sustainability?

7.68%

Expected Dividend Yield


Dividend Yield vs Market

company5.3%marketbottom25%2.3%markettop25%6.3%industryaverage4.4%forecastin3Years7.7%

Current dividend yield vs market & industry


Dividend Yield and Payments Analysis

Notable Dividend: 1668's dividend (5.26%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.25%).

High Dividend: 1668's dividend (5.26%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.35%).

Stable Dividend: 1668 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 1668's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (12.4%), 1668's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 1668's dividends in 3 years are forecast to be well covered by earnings (25.6% payout ratio).


Next Steps

Management

What is the CEO of China South City Holdings's salary, the management and board of directors tenure and is there insider trading?

0.7yrs

Average management tenure


CEO

Lidong Zhao (49yo)

0.7yrs

Tenure

HK$1,270,000

Compensation

Mr. Lidong Zhao has been Chief Executive Officer and Executive Director at China South City Holdings Limited since February 01, 2019. Mr. Zhao serves as Vice President of Wuzhou Int'l Group Investment at W ...


CEO Compensation Analysis

Compensation vs. Market: Lidong has recently become CEO, making it difficult to compare their total compensation against companies of similar size in the Hong Kong market.

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


Management Age and Tenure

0.7yrs

Average Tenure

52.5yo

Average Age

Experienced Management: 1668's management team is not considered experienced ( 0.7 years average tenure), which suggests a new team.


Board Age and Tenure

7.5yrs

Average Tenure

61yo

Average Age

Experienced Board: 1668's board of directors are considered experienced (7.5 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.


Ownership Breakdown


Management Team

  • Ricky Cheng (58yo)

    Chairman of the Board

    • Tenure: 2.3yrs
    • Compensation: HK$23.71m
  • Stephen Fung (54yo)

    Vice Chairman

    • Tenure: 2.4yrs
    • Compensation: HK$24.09m
  • Kai Cheung Ma (77yo)

    Co-Founder & Non-Executive Director

    • Tenure: 17.2yrs
    • Compensation: HK$680.00k
  • Cliff Sun (65yo)

    Co-Founder & Honourable Adviser

    • Tenure: 0yrs
    • Compensation: HK$216.00k
  • Wai Mo Ma (74yo)

    Co-Founder & Honourable Adviser

    • Tenure: 0yrs
    • Compensation: HK$216.00k
  • Lidong Zhao (49yo)

    CEO & Executive Director

    • Tenure: 0.7yrs
    • Compensation: HK$1.27m
  • Carman Cheng (30yo)

    Executive Director

    • Tenure: 2.4yrs
    • Compensation: HK$5.09m
  • Chun Yip Hui (39yo)

    Chief Financial Officer

    • Tenure: 1.5yrs
  • Weiguo Chen (51yo)

    Executive Vice President of Business Management Division

    • Tenure: 0yrs
  • Wen Qiu (46yo)

    Executive Vice President of Investment Development Division

    • Tenure: 0.3yrs

Board Members

  • Wai Keung Li (62yo)

    Independent Non-Executive Director

    • Tenure: 10.1yrs
    • Compensation: HK$1.32m
  • Ricky Cheng (58yo)

    Chairman of the Board

    • Tenure: 2.3yrs
    • Compensation: HK$23.71m
  • Tai Po Cheng (67yo)

    Non-Executive Director

    • Tenure: 9.5yrs
    • Compensation: HK$680.00k
  • Samuel Yung (60yo)

    Independent Non-Executive Director

    • Tenure: 6.6yrs
    • Compensation: HK$1.32m
  • Stephen Fung (54yo)

    Vice Chairman

    • Tenure: 2.4yrs
    • Compensation: HK$24.09m
  • Stephen Hui (72yo)

    Independent Non Executive Director

    • Tenure: 8.5yrs
    • Compensation: HK$1.32m
  • Kai Cheung Ma (77yo)

    Co-Founder & Non-Executive Director

    • Tenure: 17.2yrs
    • Compensation: HK$680.00k
  • Andrew Leung (68yo)

    Independent Non-Executive Director

    • Tenure: 10.1yrs
    • Compensation: HK$1.32m
  • Lidong Zhao (49yo)

    CEO & Executive Director

    • Tenure: 0.7yrs
    • Compensation: HK$1.27m
  • Carman Cheng (30yo)

    Executive Director

    • Tenure: 2.4yrs
    • Compensation: HK$5.09m

Company Information

China South City Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: China South City Holdings Limited
  • Ticker: 1668
  • Exchange: SEHK
  • Founded: 2002
  • Industry: Real Estate Development
  • Sector: Real Estate
  • Market Cap: HK$7.702b
  • Shares outstanding: 8.11b
  • Website: https://www.chinasouthcity.com

Number of Employees


Location

  • China South City Holdings Limited
  • Sun Life Tower
  • Room 2205, 22nd Floor
  • Tsim Sha Tsui
  • Kowloon
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1668SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDSep 2009
1668SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDSep 2009
1668SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDSep 2009

Biography

China South City Holdings Limited, together with its subsidiaries, develops and operates integrated logistics and trade centers in the People’s Republic of China. The company operates a trading platform of ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/14 12:46
End of Day Share Price2019/10/14 00:00
Earnings2019/03/31
Annual Earnings2019/03/31


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.

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