Ronshine China Holdings (SZSC:3301) - Share price, News & Analysis

Q: What is the Fair Price of 3301 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

3301 (HK$1.65) is trading below our estimate of [[fair value]] (HK$13.77)

3301 fundamental analysis
Snowflake Score
Valuation	6/6
Future Growth	5/6
Past Performance	1/6
Financial Health	4/6
Dividends	0/6

3301 Stock Overview

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

Rewards

Trading at 88% below our estimate of its fair value

Earnings are forecast to grow 27.18% per year

Risk Analysis

Debt is not well covered by operating cash flow

Volatile share price over the past 3 months

Large one-off items impacting financial results

Significant insider selling over the past 3 months

Ronshine China Holdings Competitors

Shanghai Industrial Urban Development Group

SEHK:563

HK$3.2b

Yuzhou Group Holdings

SEHK:1628

HK$2.8b

Road King Infrastructure

SEHK:1098

HK$3.9b

Tomson Group

SEHK:258

HK$3.7b

Price History & Performance

Summary of all time highs, changes and price drops for Ronshine China Holdings
Historical stock prices
Current Share Price	HK$1.65
52 Week High	HK$4.68
52 Week Low	HK$1.59
Beta	0.71
1 Month Change	-17.91%
3 Month Change	-32.65%
1 Year Change	-62.07%
3 Year Change	-83.50%
5 Year Change	-78.76%
Change since IPO	-72.95%

Shareholder Returns

	3301	HK Real Estate	HK Market
7D	-16.7%	-0.9%	-2.9%
1Y	-62.1%	-31.6%	-20.3%

Return vs Industry: 3301 underperformed the Hong Kong Real Estate industry which returned -31.6% over the past year.

Return vs Market: 3301 underperformed the Hong Kong Market which returned -20.3% over the past year.

Price Volatility

Is 3301's price volatile compared to industry and market?
3301 volatility
3301 Average Weekly Movement	10.1%
Real Estate Industry Average Movement	6.1%
Market Average Movement	6.9%
10% most volatile stocks in HK Market	13.6%
10% least volatile stocks in HK Market	3.3%

Stable Share Price: 3301 is more volatile than 75% of Hong Kong stocks over the past 3 months, typically moving +/- 10% a week.

Volatility Over Time: 3301's weekly volatility (10%) has been stable over the past year, but is still higher than 75% of Hong Kong stocks.

About the Company

Founded	Employees	CEO	Website
2003	2,499	Zonghong Ou	https://www.rongxingroup.com

Ronshine China Holdings Limited, an investment holding company, engages in the property development business. It is involved in the development of mid-to high-end residential properties and commercial properties in cities in the Western Coast of the Straits, Yangtze River Delta, and selected first and second-tier cities in the People’s Republic of China. The company was formerly known as Ronshine China Holdings Limited.

Ronshine China Holdings Fundamentals Summary

How do Ronshine China Holdings's earnings and revenue compare to its market cap?
3301 fundamental statistics
Market Cap	CN¥2.38b
Earnings (TTM)	CN¥1.30b
Revenue (TTM)	CN¥33.28b

1.8x

P/E Ratio

0.1x

P/S Ratio

Is 3301 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
3301 income statement (TTM)
Revenue	CN¥33.28b
Cost of Revenue	CN¥29.66b
Gross Profit	CN¥3.63b
Other Expenses	CN¥2.33b
Earnings	CN¥1.30b

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.77
Gross Margin	10.90%
Net Profit Margin	3.89%
Debt/Equity Ratio	109.0%

How did 3301 perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is 3301 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 3301?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 3301. This is calculated by dividing 3301's market cap by their current preferred multiple.
What is 3301's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CN¥2.38b

3301 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	2.4x
Enterprise Value/EBITDA	63.9x
PEG Ratio	0.07x

Price to Earnings Ratio vs Peers

How does 3301's PE Ratio compare to its peers?

3301 PE Ratio vs Peers

The above table shows the PE ratio for 3301 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	6.5x
563 Shanghai Industrial Urban Development Group	5.5x	n/a	HK$3.2b
1628 Yuzhou Group Holdings	3.2x	38.4%	HK$2.8b
1098 Road King Infrastructure	3.8x	n/a	HK$3.9b
258 Tomson Group	13.2x	n/a	HK$3.7b
3301 Ronshine China Holdings	1.8x	27.2%	HK$2.8b

Forward PE

Price-To-Earnings vs Peers: 3301 is good value based on its Price-To-Earnings Ratio (1.8x) compared to the peer average (6.5x).

Price to Earnings Ratio vs Industry

How does 3301's PE Ratio compare vs other companies in the HK Real Estate Industry?

Price-To-Earnings vs Industry: 3301 is good value based on its Price-To-Earnings Ratio (1.8x) compared to the Hong Kong Real Estate industry average (6.5x)

Price to Earnings Ratio vs Fair Ratio

What is 3301's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

3301 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	1.8x
Fair PE Ratio	6.1x

Price-To-Earnings vs Fair Ratio: 3301 is good value based on its Price-To-Earnings Ratio (1.8x) compared to the estimated Fair Price-To-Earnings Ratio (6.1x).

Share Price vs Fair Value

What is the Fair Price of 3301 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 3301 (HK$1.65) is trading below our estimate of fair value (HK$13.77)

Significantly Below Fair Value: 3301 is trading below fair value by more than 20%.

Price to Earnings Growth Ratio

PEG Ratio: 3301 is good value based on its PEG Ratio (0.1x)

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Future Growth

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

Future Growth Score

5/6

Future Growth Score 5/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

27.2%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 3301's forecast earnings growth (27.2% per year) is above the savings rate (1.6%).

Earnings vs Market: 3301's earnings (27.2% per year) are forecast to grow faster than the Hong Kong market (16.5% per year).

High Growth Earnings: 3301's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 3301's revenue (28% per year) is forecast to grow faster than the Hong Kong market (10.2% per year).

High Growth Revenue: 3301's revenue (28% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 3301's Return on Equity is forecast to be low in 3 years time (8%).

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Past Performance

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

Past Performance Score

1/6

Past Performance Score 1/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

6.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 3301 has a large one-off gain of CN¥707.5M impacting its December 31 2021 financial results.

Growing Profit Margin: 3301's current net profit margins (3.9%) are lower than last year (5%).

Past Earnings Growth Analysis

Earnings Trend: 3301's earnings have grown by 6.7% per year over the past 5 years.

Accelerating Growth: 3301's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 3301 had negative earnings growth (-46.7%) over the past year, making it difficult to compare to the Real Estate industry average (15.4%).

Return on Equity

High ROE: 3301's Return on Equity (3.3%) is considered low.

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Financial Health

How is Ronshine China Holdings's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 3301's short term assets (CN¥217.9B) exceed its short term liabilities (CN¥157.3B).

Long Term Liabilities: 3301's short term assets (CN¥217.9B) exceed its long term liabilities (CN¥35.9B).

Debt to Equity History and Analysis

Debt Level: 3301's net debt to equity ratio (78.4%) is considered high.

Reducing Debt: 3301's debt to equity ratio has reduced from 171.5% to 109% over the past 5 years.

Debt Coverage: 3301's debt is not well covered by operating cash flow (6.4%).

Interest Coverage: 3301 earns more interest than it pays, so coverage of interest payments is not a concern.

Balance Sheet

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Dividend

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

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

25.07%

Forecast Dividend Yield

Dividend Yield vs Market

Notable Dividend: Unable to evaluate 3301's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate 3301's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if 3301's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if 3301's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: 3301 is not paying a notable dividend for the Hong Kong market.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as 3301 has not reported any payouts.

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Management

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

3.7yrs

Average management tenure

CEO

Zonghong Ou (53 yo)

7.58yrs

Tenure

CN¥2,933,000

Compensation

Mr. Zonghong Ou has been Chief Executive Officer of Ronshine China Holdings Limited since December 15, 2014. Mr. Ou has been Executive Chairman of the board at Ronshine Service Holding Co., Ltd. since Sept...

CEO Compensation Analysis

Compensation vs Market: Zonghong's total compensation ($USD436.52K) is about average for companies of similar size in the Hong Kong market ($USD371.60K).

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

Leadership Team

Experienced Management: 3301's management team is considered experienced (3.7 years average tenure).

Board Members

Experienced Board: 3301's board of directors are considered experienced (4.1 years average tenure).

Ownership

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

Insider Trading Volume

Insider Buying: 3301 insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/07/06 00:00
End of Day Share Price	2022/07/05 00:00
Earnings	2021/12/31
Annual Earnings	2021/12/31