SEHK:1966

Stock Analysis Report

China SCE Group Holdings

Executive Summary

China SCE Group Holdings Limited, an investment holding company, develops and manages properties in the People’s Republic of China.

Rewards

Trading at 80.9% below its fair value

Earnings are forecast to grow 20.57% per year

Risk Analysis

Debt is not well covered by operating cash flow

Unstable dividend track record

Large one-off items impacting financial results

Shareholders have been diluted in the past year



Snowflake Analysis

Exceptional growth potential and undervalued.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 1966 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

12.6%

1966

3.1%

HK Real Estate

2.2%

HK Market


1 Year Return

47.3%

1966

3.6%

HK Real Estate

-0.8%

HK Market

Return vs Industry: 1966 exceeded the Hong Kong Real Estate industry which returned 3.6% over the past year.

Return vs Market: 1966 exceeded the Hong Kong Market which returned -0.8% over the past year.


Shareholder returns

1966IndustryMarket
7 Day12.6%3.1%2.2%
30 Day17.8%2.5%-0.6%
90 Day8.9%4.5%-0.9%
1 Year57.3%47.3%7.5%3.6%2.8%-0.8%
3 Year110.2%74.8%52.9%37.0%19.5%7.4%
5 Year283.6%200.7%71.8%43.6%20.7%0.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 1966 (HK$4.3) is trading below our estimate of fair value (HK$22.55)

Significantly Below Fair Value: 1966 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 1966 is good value based on its PE Ratio (4.7x) compared to the Real Estate industry average (6.6x).

PE vs Market: 1966 is good value based on its PE Ratio (4.7x) compared to the Hong Kong market (10.2x).


Price to Earnings Growth Ratio

PEG Ratio: 1966 is good value based on its PEG Ratio (0.2x)


Price to Book Ratio

PB vs Industry: 1966 is overvalued based on its PB Ratio (0.9x) compared to the HK Real Estate industry average (0.5x).


Next Steps

Future Growth

How is China SCE Group Holdings forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

20.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1966's forecast earnings growth (20.6% per year) is above the savings rate (1.6%).

Earnings vs Market: 1966's earnings (20.6% 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: 1966's revenue (27.8% per year) is forecast to grow faster than the Hong Kong market (10.3% per year).

High Growth Revenue: 1966's revenue (27.8% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 1966's Return on Equity is forecast to be high in 3 years time (20.4%)


Next Steps

Past Performance

How has China SCE Group Holdings performed over the past 5 years?

33.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1966 has a large one-off gain of CN¥2.1B impacting its June 30 2019 financial results.

Growing Profit Margin: 1966's current net profit margins (17.5%) are lower than last year (22.2%).


Past Earnings Growth Analysis

Earnings Trend: 1966's earnings have grown significantly by 33% per year over the past 5 years.

Accelerating Growth: 1966's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 1966 had negative earnings growth (-14.7%) over the past year, making it difficult to compare to the Real Estate industry average (-11.5%).


Return on Equity

High ROE: 1966's Return on Equity (14.9%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is China SCE Group Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 1966's short term assets (CN¥76.7B) exceed its short term liabilities (CN¥69.7B).

Long Term Liabilities: 1966's short term assets (CN¥76.7B) exceed its long term liabilities (CN¥34.7B).


Debt to Equity History and Analysis

Debt Level: 1966's debt to equity ratio (176.3%) is considered high.

Reducing Debt: 1966's debt to equity ratio has increased from 121.7% to 176.3% over the past 5 years.

Debt Coverage: 1966's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: 1966's interest payments on its debt are well covered by EBIT (15.6x coverage).


Balance Sheet

Inventory Level: 1966 has a high level of physical assets or inventory.

Debt Coverage by Assets: 1966's debt is covered by short term assets (assets are 1.7x debt).


Next Steps

Dividend

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

4.62%

Current Dividend Yield


Dividend Yield vs Market

company4.6%marketbottom25%2.3%markettop25%6.2%industryaverage4.3%forecastin3Years8.1%

Current dividend yield vs market & industry

Notable Dividend: 1966's dividend (4.62%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.27%).

High Dividend: 1966's dividend (4.62%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.17%).


Stability and Growth of Payments

Stable Dividend: 1966 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 1966's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (26%), 1966's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 1966's dividends in 3 years are forecast to be well covered by earnings (32.2% payout ratio).


Next Steps

Management

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

9.9yrs

Average board tenure


CEO

Chiu Wong (53yo)

0yrs

Tenure

CN¥3,942,000

Compensation

Mr. Chiu Yeung Wong is the Co-Founder, Chairman, Chief Executive Officer and President of China SCE Property Holdings Limited. Mr. Wong has 13 years of experience in real estate development. He serves as  ...


CEO Compensation Analysis

Compensation vs Market: Chiu's total compensation ($USD560.04K) is about average for companies of similar size in the Hong Kong market ($USD566.22K).

Compensation vs Earnings: Chiu's compensation has been consistent with company performance over the past year.


Board Age and Tenure

9.9yrs

Average Tenure

52yo

Average Age

Experienced Board: 1966's board of directors are considered experienced (9.9 years average tenure).


Insider Trading

Insider Buying: 1966 insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellCN¥76,000,05229 Nov 19
Yuanlai Chen
EntityIndividual
Role
Vice Chairman
Co-Founder & Vice Chairman
Shares20,000,000
Max PriceCN¥3.80
SellCN¥190,000,13029 Nov 19
Youquan Huang
EntityIndividual
Role
Member of the Board of Directors
Executive President & Executive Director
Shares50,000,000
Max PriceCN¥3.80
BuyCN¥209,874,14429 Nov 19
Yuanlai Chen
EntityIndividual
Role
Vice Chairman
Co-Founder & Vice Chairman
Shares55,230,000
Max PriceCN¥3.80
BuyCN¥132,126,09029 Nov 19
Hiu Lok Cheng
EntityIndividual
Role
Vice Chairman
Co-Founder & Vice Chairman
Shares34,770,000
Max PriceCN¥3.80
SellCN¥76,000,05229 Nov 19
Hiu Lok Cheng
EntityIndividual
Role
Vice Chairman
Co-Founder & Vice Chairman
Shares20,000,000
Max PriceCN¥3.80
BuyCN¥13,964,81214 Nov 19
Hiu Lok Cheng
EntityIndividual
Role
Vice Chairman
Co-Founder & Vice Chairman
Shares4,000,000
Max PriceCN¥3.49
BuyCN¥12,559,75714 Nov 19
Hiu Lok Cheng
EntityIndividual
Role
Vice Chairman
Co-Founder & Vice Chairman
Shares3,500,000
Max PriceCN¥3.59
BuyCN¥14,275,40512 Nov 19
Hiu Lok Cheng
EntityIndividual
Role
Vice Chairman
Co-Founder & Vice Chairman
Shares3,960,000
Max PriceCN¥3.60
BuyCN¥16,416,00112 Nov 19
Hiu Lok Cheng
EntityIndividual
Role
Vice Chairman
Co-Founder & Vice Chairman
Shares4,500,000
Max PriceCN¥3.65
BuyCN¥5,854,94728 Aug 19
Hiu Lok Cheng
EntityIndividual
Role
Vice Chairman
Co-Founder & Vice Chairman
Shares1,500,000
Max PriceCN¥3.90
BuyCN¥10,013,50228 Aug 19
Hiu Lok Cheng
EntityIndividual
Role
Vice Chairman
Co-Founder & Vice Chairman
Shares2,500,000
Max PriceCN¥4.01
BuyCN¥22,221,11326 Aug 19
Hiu Lok Cheng
EntityIndividual
Role
Vice Chairman
Co-Founder & Vice Chairman
Shares5,500,000
Max PriceCN¥4.04
BuyCN¥18,877,79618 Jan 19
Chiu Wong
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares6,000,000
Max PriceCN¥3.15
BuyCN¥17,408,59818 Jan 19
Chiu Wong
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares5,500,000
Max PriceCN¥3.17
BuyCN¥13,770,90816 Jan 19
Chiu Wong
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares4,500,000
Max PriceCN¥3.06
BuyCN¥15,753,48216 Jan 19
Chiu Wong
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares5,000,000
Max PriceCN¥3.15
BuyCN¥16,537,93815 Jan 19
Chiu Wong
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares5,500,000
Max PriceCN¥3.01
BuyCN¥13,345,20411 Jan 19
Chiu Wong
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares4,500,000
Max PriceCN¥2.97
BuyCN¥14,999,50511 Jan 19
Chiu Wong
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares5,000,000
Max PriceCN¥3.00
BuyCN¥16,136,43410 Jan 19
Chiu Wong
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares5,500,000
Max PriceCN¥2.93
BuyCN¥14,660,98710 Jan 19
Chiu Wong
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares5,000,000
Max PriceCN¥2.93
BuyCN¥17,396,40508 Jan 19
Chiu Wong
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares6,000,000
Max PriceCN¥2.90
BuyCN¥14,002,49208 Jan 19
Chiu Wong
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares5,000,000
Max PriceCN¥2.80
BuyCN¥8,762,38018 Dec 18
Chiu Wong
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares2,950,000
Max PriceCN¥2.97
BuyCN¥7,317,25817 Dec 18
Chiu Wong
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares2,500,000
Max PriceCN¥2.93

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 6.7%.


Management Team

  • Siu Li (50yo)

    Financial Controller & Company Secretary

    • Tenure: 0yrs
  • Haitao Zhang (50yo)

    General Manager of the Audit and Supervision Department

    • Tenure: 0yrs
  • Chiu Wong (53yo)

    Chairman

    • Tenure: 0yrs
    • Compensation: CN¥3.94m
  • Hiu Lok Cheng (54yo)

    Co-Founder & Vice Chairman

    • Tenure: 0yrs
    • Compensation: CN¥3.56m
  • Peichen Chen (43yo)

    General Manager of Financial Management Department

    • Tenure: 0yrs
  • Youquan Huang (50yo)

    Executive President & Executive Director

    • Tenure: 8.6yrs
    • Compensation: CN¥4.38m
  • Yuanlai Chen (52yo)

    Co-Founder & Vice Chairman

    • Tenure: 0yrs
    • Compensation: CN¥3.56m
  • Lun Wong (32yo)

    Assistant President & Executive Director

    • Tenure: 2.8yrs
    • Compensation: CN¥2.45m
  • Zhenxing Lu (37yo)

    General Manager of the Sales and Marketing Department

    • Tenure: 0yrs
  • Chan Keith (46yo)

    CEO & Vice Chairman of Funlive Rental Apartments Business

    • Tenure: 0yrs

Board Members

  • Stephen Ting (65yo)

    Independent Non-Executive Director

    • Tenure: 9.9yrs
    • Compensation: CN¥284.00k
  • Hong Te Lu (58yo)

    Independent Non-Executive Director

    • Tenure: 9.9yrs
    • Compensation: CN¥284.00k
  • Yiyi Dai (51yo)

    Independent Non-Executive Director

    • Tenure: 9.9yrs
    • Compensation: CN¥284.00k
  • Chiu Wong (53yo)

    Chairman

    • Tenure: 0yrs
    • Compensation: CN¥3.94m
  • Hiu Lok Cheng (54yo)

    Co-Founder & Vice Chairman

    • Tenure: 0yrs
    • Compensation: CN¥3.56m
  • Youquan Huang (50yo)

    Executive President & Executive Director

    • Tenure: 8.6yrs
    • Compensation: CN¥4.38m
  • Yuanlai Chen (52yo)

    Co-Founder & Vice Chairman

    • Tenure: 0yrs
    • Compensation: CN¥3.56m
  • Lun Wong (32yo)

    Assistant President & Executive Director

    • Tenure: 2.8yrs
    • Compensation: CN¥2.45m
  • Chan Keith (46yo)

    CEO & Vice Chairman of Funlive Rental Apartments Business

    • Tenure: 0yrs

Company Information

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


Key Information

  • Name: China SCE Group Holdings Limited
  • Ticker: 1966
  • Exchange: SEHK
  • Founded: 1996
  • Industry: Real Estate Development
  • Sector: Real Estate
  • Market Cap: HK$17.900b
  • Shares outstanding: 4.18b
  • Website: https://www.sce-re.com

Number of Employees


Location

  • China SCE Group Holdings Limited
  • SCE Tower
  • Lane 1688
  • Shanghai
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1966SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDFeb 2010
XSPDB (Deutsche Boerse AG)YesOrdinary SharesDEEURFeb 2010
1966SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDFeb 2010
1966SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDFeb 2010
XSPBST (Boerse-Stuttgart)YesOrdinary SharesDEEURFeb 2010

Biography

China SCE Group Holdings Limited, an investment holding company, develops and manages properties in the People’s Republic of China. Its properties include high-rise residential buildings, low-rise resident ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/12 12:56
End of Day Share Price2019/12/12 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.