SEHK:2019

Stock Analysis Report

Executive Summary

Dexin China Holdings Company Limited, an investment holding company, engages in the property development business in China.

Rewards

Trading at 61.4% below its fair value

Earnings are forecast to grow 4.34% per year

Earnings grew by 86.6% over the past year

Risk Analysis

Debt is not well covered by operating cash flow

High level of non-cash earnings

Unstable dividend track record

Shareholders have been diluted in the past year



Snowflake Analysis

Undervalued with proven track record.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 2019 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

1.3%

2019

-2.3%

HK Real Estate

-4.3%

HK Market


1 Year Return

12.5%

2019

-9.1%

HK Real Estate

-11.7%

HK Market

Return vs Industry: 2019 exceeded the Hong Kong Real Estate industry which returned -6.4% over the past year.

Return vs Market: 2019 exceeded the Hong Kong Market which returned -8.5% over the past year.


Shareholder returns

2019IndustryMarket
7 Day1.3%-2.3%-4.3%
30 Day3.3%0.1%-2.6%
90 Day1.9%-0.6%-0.2%
1 Year16.4%12.5%-5.0%-9.1%-8.5%-11.7%
3 Yearn/a37.4%22.7%10.0%-1.1%
5 Yearn/a60.7%33.8%11.2%-7.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Dexin China 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: 2019 (HK$3.16) is trading below our estimate of fair value (HK$8.18)

Significantly Below Fair Value: 2019 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 2019 is good value based on its PE Ratio (3.2x) compared to the Real Estate industry average (6.6x).

PE vs Market: 2019 is good value based on its PE Ratio (3.2x) compared to the Hong Kong market (9.9x).


Price to Earnings Growth Ratio

PEG Ratio: 2019 is good value based on its PEG Ratio (0.7x)


Price to Book Ratio

PB vs Industry: 2019 is overvalued based on its PB Ratio (1.6x) compared to the HK Real Estate industry average (0.5x).


Next Steps

Future Growth

How is Dexin China Holdings forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

4.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2019's forecast earnings growth (4.3% per year) is above the savings rate (1.6%).

Earnings vs Market: 2019's earnings (4.3% per year) are forecast to grow slower than the Hong Kong market (11.7% per year).

High Growth Earnings: 2019's earnings are forecast to grow, but not significantly.

Revenue vs Market: 2019's revenue (29.8% per year) is forecast to grow faster than the Hong Kong market (9.8% per year).

High Growth Revenue: 2019's revenue (29.8% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 2019's Return on Equity is forecast to be low in 3 years time (10.9%).


Next Steps

Past Performance

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

51.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 2019 has a high level of non-cash earnings.

Growing Profit Margin: 2019's current net profit margins (21.8%) are higher than last year (13%).


Past Earnings Growth Analysis

Earnings Trend: 2019's earnings have grown significantly by 51.4% per year over the past 5 years.

Accelerating Growth: 2019's earnings growth over the past year (86.6%) exceeds its 5-year average (51.4% per year).

Earnings vs Industry: 2019 earnings growth over the past year (86.6%) exceeded the Real Estate industry -5.6%.


Return on Equity

High ROE: Whilst 2019's Return on Equity (27.66%) is high, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is Dexin China Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 2019's short term assets (CN¥51.6B) exceed its short term liabilities (CN¥40.7B).

Long Term Liabilities: 2019's short term assets (CN¥51.6B) exceed its long term liabilities (CN¥7.6B).


Debt to Equity History and Analysis

Debt Level: 2019's debt to equity ratio (155.3%) is considered high.

Reducing Debt: Insufficient data to determine if 2019's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: 2019's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: 2019's interest payments on its debt are well covered by EBIT (6.6x coverage).


Balance Sheet

Inventory Level: 2019 has a high level of physical assets or inventory.

Debt Coverage by Assets: 2019's debt is covered by short term assets (assets are 3.5x debt).


Next Steps

Dividend

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

7.04%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 2019's dividend (7.04%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.29%).

High Dividend: 2019's dividend (7.04%) is in the top 25% of dividend payers in the Hong Kong market (6.4%)


Stability and Growth of Payments

Stable Dividend: Too early to tell whether 2019's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if 2019's dividend payments are increasing as they only just started paying a dividend.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (11.4%), 2019's dividend payments are thoroughly 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

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

1.5yrs

Average management tenure


CEO

Zhongmin Fei (49yo)

1.5yrs

Tenure

CN¥1,372,000

Compensation

Mr. Fei Zhongmin has been Director of Dexin China Holdings Company Limited since January 16, 2018. Mr. Fei Zhongmin re-designated as an executive Director and was appointed as President of Dexin China Hold ...


CEO Compensation Analysis

Compensation vs Market: Zhongmin's total compensation ($USD195.87K) is below average for companies of similar size in the Hong Kong market ($USD463.63K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Zhongmin Fei
President & Executive Director1.5yrsCN¥1.37m1.45% CN¥122.2m
Xia Feng
Vice President & Executive Director2.1yrsCN¥1.11m0.48% CN¥40.5m
Jing Fang
Executive Vice President1.5yrsno datano data
Hing Ling Chau
Company Secretary1.8yrsno datano data

1.5yrs

Average Tenure

44yo

Average Age

Experienced Management: 2019's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Zhongmin Fei
President & Executive Director1.5yrsCN¥1.37m1.45% CN¥122.2m
Xia Feng
Vice President & Executive Director2.1yrsCN¥1.11m0.48% CN¥40.5m
Wing Kuen Wong
Independent Non-executive Director1.1yrsno datano data
Hengliu Chen
Independent Non Executive Director1.1yrsno datano data
Yiping Hu
Chairman of the Board1.5yrsCN¥372.00k2.77% CN¥233.8m
Shihao Hu
Non Executive Director1.5yrsno datano data
Jiangang Ding
Independent Non Executive Director1.1yrsno datano data

1.5yrs

Average Tenure

52yo

Average Age

Experienced Board: 2019's board of directors are not considered experienced ( 1.5 years average tenure), which suggests a new board.


Ownership

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


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold 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 15.5%.


Top Shareholders

Company Information

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


Key Information

  • Name: Dexin China Holdings Company Limited
  • Ticker: 2019
  • Exchange: SEHK
  • Founded: 1995
  • Industry: Real Estate Development
  • Sector: Real Estate
  • Market Cap: HK$8.428b
  • Shares outstanding: 2.70b
  • Website: https://www.dothinkgroup.com

Number of Employees


Location

  • Dexin China Holdings Company Limited
  • Huaneng Building
  • 3rd Floor
  • Hangzhou
  • Zhejiang Province
  • 310014
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
2019SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDFeb 2019
26XDB (Deutsche Boerse AG)YesOrdinary SharesDEEURFeb 2019
2019SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDFeb 2019

Biography

Dexin China Holdings Company Limited, an investment holding company, engages in the property development business in China. It operates through four segments: Property Development and Sales; Property Construction Services; Hotel Operations; and Property Leasing. The company develops residential properties; and develops, operates, and manages commercial and mixed use properties. It is also involved in undertaking residential construction works; and the property leasing and hotel operation activities. As of November 30, 2018, it had 74 projects with gross floor area of 5591970 square meters under development. The company was founded in 1995 and is headquartered in Hangzhou, China. Dexin China Holdings Company Limited is a subsidiary of Tak Shin International Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/28 13:26
End of Day Share Price2020/02/28 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.