SEHK:1918

Stock Analysis Report

Executive Summary

Sunac China Holdings Limited, together with its subsidiaries, develops residential and commercial properties in the People's Republic of China.

Rewards

PE ratio (8.2x) is below the Hong Kong market (10.3x)

Earnings are forecast to grow 22.14% per year

Earnings grew by 30.3% over the past year

Risk Analysis

Debt is not well covered by operating cash flow

Highly volatile share price over past 3 months

Large one-off items impacting financial results

Shareholders have been diluted in the past year



Snowflake Analysis

Exceptional growth potential with mediocre balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 1918's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

5.4%

1918

4.2%

HK Real Estate

3.5%

HK Market


1 Year Return

58.4%

1918

4.8%

HK Real Estate

2.3%

HK Market

Return vs Industry: 1918 exceeded the Hong Kong Real Estate industry which returned 4.8% over the past year.

Return vs Market: 1918 exceeded the Hong Kong Market which returned 2.3% over the past year.


Shareholder returns

1918IndustryMarket
7 Day5.4%4.2%3.5%
30 Day19.1%6.9%3.1%
90 Day24.1%5.5%1.1%
1 Year62.9%58.4%8.8%4.8%6.0%2.3%
3 Year581.4%534.2%59.6%42.9%25.4%12.7%
5 Year664.9%560.3%75.6%46.7%23.0%2.4%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Sunac China Holdings undervalued compared to its fair value and its price relative to the market?

8.24x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 1918 (HK$43.25) is trading above our estimate of fair value (HK$20.56)

Significantly Below Fair Value: 1918 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 1918 is poor value based on its PE Ratio (8.2x) compared to the Real Estate industry average (6.6x).

PE vs Market: 1918 is good value based on its PE Ratio (8.2x) compared to the Hong Kong market (10.3x).


Price to Earnings Growth Ratio

PEG Ratio: 1918 is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: 1918 is overvalued based on its PB Ratio (2.5x) compared to the HK Real Estate industry average (0.5x).


Next Steps

Future Growth

How is Sunac China Holdings forecast to perform in the next 1 to 3 years based on estimates from 14 analysts?

22.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1918's forecast earnings growth (22.1% per year) is above the savings rate (1.6%).

Earnings vs Market: 1918's earnings (22.1% per year) are forecast to grow faster than the Hong Kong market (11.7% per year).

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

Revenue vs Market: 1918's revenue (26.2% per year) is forecast to grow faster than the Hong Kong market (10.3% per year).

High Growth Revenue: 1918's revenue (26.2% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 1918's Return on Equity is forecast to be high in 3 years time (31.4%)


Next Steps

Past Performance

How has Sunac China Holdings performed over the past 5 years?

46.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1918 has a large one-off loss of CN¥9.5B impacting its June 30 2019 financial results.

Growing Profit Margin: 1918's current net profit margins (13.2%) are lower than last year (16.1%).


Past Earnings Growth Analysis

Earnings Trend: 1918's earnings have grown significantly by 46.4% per year over the past 5 years.

Accelerating Growth: 1918's earnings growth over the past year (30.3%) is below its 5-year average (46.4% per year).

Earnings vs Industry: 1918 earnings growth over the past year (30.3%) exceeded the Real Estate industry -11.5%.


Return on Equity

High ROE: Whilst 1918's Return on Equity (27.02%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Sunac China Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 1918's short term assets (CN¥663.8B) exceed its short term liabilities (CN¥573.9B).

Long Term Liabilities: 1918's short term assets (CN¥663.8B) exceed its long term liabilities (CN¥216.7B).


Debt to Equity History and Analysis

Debt Level: 1918's debt to equity ratio (379%) is considered high.

Reducing Debt: 1918's debt to equity ratio has increased from 187.7% to 379% over the past 5 years.

Debt Coverage: 1918's debt is not well covered by operating cash flow (19.1%).

Interest Coverage: 1918 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 1918 has a high level of physical assets or inventory.

Debt Coverage by Assets: 1918's debt is covered by short term assets (assets are 2.2x debt).


Next Steps

Dividend

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

2.13%

Current Dividend Yield


Dividend Yield vs Market

company2.1%marketbottom25%2.2%markettop25%6.2%industryaverage4.2%forecastin3Years4.0%

Current dividend yield vs market & industry

Notable Dividend: 1918's dividend (2.13%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.21%).

High Dividend: 1918's dividend (2.13%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.15%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, 1918 has been paying a dividend for less than 10 years.

Growing Dividend: 1918's dividend payments have increased, but the company has only paid a dividend for 8 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (17.5%), 1918's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 1918's dividends in 3 years are forecast to be well covered by earnings (21.7% payout ratio).


Next Steps

Management

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

3.4yrs

Average management tenure


CEO

Mengde Wang (47yo)

4.3yrs

Tenure

CN¥20,594,000

Compensation

Mr. Mengde Wang has been the Chief Executive Officer of Sunac China Holdings Limited since September 07, 2015. Mr. Wang served as an Executive President of Sunac China Holdings Limited since 2011 until Sep ...


CEO Compensation Analysis

Compensation vs Market: Mengde's total compensation ($USD2.94M) is above average for companies of similar size in the Hong Kong market ($USD856.13K).

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


Management Age and Tenure

3.4yrs

Average Tenure

43.5yo

Average Age

Experienced Management: 1918's management team is considered experienced (3.4 years average tenure).


Board Age and Tenure

10.3yrs

Average Tenure

46yo

Average Age

Experienced Board: 1918's board of directors are seasoned and experienced ( 10.3 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.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.2%.


Management Team

  • Shuping Huang (38yo)

    Executive Director

    • Tenure: 3.1yrs
    • Compensation: CN¥12.60m
  • Hongbin Sun (56yo)

    Founder & Executive Chairman

    • Tenure: 0yrs
    • Compensation: CN¥17.43m
  • Mengde Wang (47yo)

    CEO & Executive Director

    • Tenure: 4.3yrs
    • Compensation: CN¥20.59m
  • Xun Chi (45yo)

    Executive Director

    • Tenure: 10.4yrs
    • Compensation: CN¥19.01m
  • Yu Shang (40yo)

    Executive Director

    • Tenure: 10.4yrs
    • Compensation: CN¥17.03m
  • Hong Jing (57yo)

    Executive Director and Executive President & President of Beijing Regional Branch

    • Tenure: 7.4yrs
    • Compensation: CN¥19.34m
  • Zhixia Ma (46yo)

    Executive President & COO

    • Tenure: 4.9yrs
    • Compensation: CN¥614.00k
  • Qiang Tian (42yo)

    Executive Director

    • Tenure: 3.1yrs
    • Compensation: CN¥16.57m
  • Xi Gao (38yo)

    CFO, VP & Company Secretary

    • Tenure: 0.3yrs
  • Kevin Zheyi Sun (29yo)

    VP, President of Culture Group & Executive Director

    • Tenure: 2.6yrs
    • Compensation: CN¥3.08m

Board Members

  • Jonathan Zhu (56yo)

    Independent Non-Executive Director

    • Tenure: 10.3yrs
    • Compensation: CN¥380.00k
  • Shuping Huang (38yo)

    Executive Director

    • Tenure: 3.1yrs
    • Compensation: CN¥12.60m
  • Hongbin Sun (56yo)

    Founder & Executive Chairman

    • Tenure: 0yrs
    • Compensation: CN¥17.43m
  • Mengde Wang (47yo)

    CEO & Executive Director

    • Tenure: 4.3yrs
    • Compensation: CN¥20.59m
  • Xun Chi (45yo)

    Executive Director

    • Tenure: 10.4yrs
    • Compensation: CN¥19.01m
  • Yu Shang (40yo)

    Executive Director

    • Tenure: 10.4yrs
    • Compensation: CN¥17.03m
  • Feng Min (49yo)

    Chairman of Wuxi Sunan Real Estate

    • Tenure: 12yrs
  • Hong Jing (57yo)

    Executive Director and Executive President & President of Beijing Regional Branch

    • Tenure: 7.4yrs
    • Compensation: CN¥19.34m
  • Qiang Tian (42yo)

    Executive Director

    • Tenure: 3.1yrs
    • Compensation: CN¥16.57m
  • Kevin Zheyi Sun (29yo)

    VP, President of Culture Group & Executive Director

    • Tenure: 2.6yrs
    • Compensation: CN¥3.08m

Company Information

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


Key Information

  • Name: Sunac China Holdings Limited
  • Ticker: 1918
  • Exchange: SEHK
  • Founded: 2003
  • Industry: Real Estate Development
  • Sector: Real Estate
  • Market Cap: HK$190.834b
  • Shares outstanding: 4.44b
  • Website: https://www.sunac.com.cn

Number of Employees


Location

  • Sunac China Holdings Limited
  • 10/7,Building c7
  • Magnetic Plaza
  • Tianjin
  • 300381
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1918SEHK (The Stock Exchange of Hong Kong Ltd.)YesHKD Ordinary SharesHKHKDOct 2010
SCNRDB (Deutsche Boerse AG)YesHKD Ordinary SharesDEEUROct 2010
1918SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesHKD Ordinary SharesHKHKDOct 2010
1918SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesHKD Ordinary SharesHKHKDOct 2010
SCCC.FOTCPK (Pink Sheets LLC)YesHKD Ordinary SharesUSUSDOct 2010

Biography

Sunac China Holdings Limited, together with its subsidiaries, develops residential and commercial properties in the People's Republic of China. The company’s property portfolio includes high-rise and mid-r ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/13 12:57
End of Day Share Price2019/12/13 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.