SEHK:1828

Stock Analysis Report

Dah Chong Hong Holdings

Executive Summary

Dah Chong Hong Holdings Limited operates as an integrated motor and consumer products distribution company in Hong Kong, Macao, Mainland China, and internationally.


Snowflake Analysis

Undervalued with excellent balance sheet.


Similar Companies

Share Price & News

How has Dah Chong Hong Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 1828's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

0%

1828

0.7%

HK Retail Distributors

-0.6%

HK Market


1 Year Return

36.3%

1828

-7.7%

HK Retail Distributors

-7.6%

HK Market

Return vs Industry: 1828 exceeded the Hong Kong Retail Distributors industry which returned 1.4% over the past year.

Return vs Market: 1828 exceeded the Hong Kong Market which returned 6.4% over the past year.


Shareholder returns

1828IndustryMarket
7 Day0%0.7%-0.6%
30 Day1.4%-0.4%-1.2%
90 Day38.3%1.5%3.0%
1 Year45.7%36.3%-4.7%-7.7%-4.2%-7.6%
3 Year44.0%26.0%-25.3%-30.5%12.9%1.5%
5 Year6.7%-13.0%-19.6%-29.0%13.1%-5.6%

Price Volatility Vs. Market

How volatile is Dah Chong Hong Holdings's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Dah Chong Hong 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: 1828 (HK$3.68) is trading below our estimate of fair value (HK$9.84)

Significantly Below Fair Value: 1828 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 1828 is good value based on its PE Ratio (9.4x) compared to the Retail Distributors industry average (11.9x).

PE vs Market: 1828 is good value based on its PE Ratio (9.4x) compared to the Hong Kong market (10.5x).


Price to Earnings Growth Ratio

PEG Ratio: 1828's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: 1828 is good value based on its PB Ratio (0.7x) compared to the HK Retail Distributors industry average (0.8x).


Next Steps

Future Growth

How is Dah Chong Hong Holdings forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

-5.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1828's earnings are forecast to decline over the next 3 years (-5.3% per year).

Earnings vs Market: 1828's earnings are forecast to decline over the next 3 years (-5.3% per year).

High Growth Earnings: 1828's earnings are forecast to decline over the next 3 years.

Revenue vs Market: 1828's revenue (5.1% per year) is forecast to grow slower than the Hong Kong market (10.2% per year).

High Growth Revenue: 1828's revenue (5.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if 1828's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Dah Chong Hong Holdings performed over the past 5 years?

2.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1828 has a large one-off gain of HK$403.0M impacting its June 30 2019 financial results.

Growing Profit Margin: 1828's current net profit margins (1.5%) are lower than last year (1.6%).


Past Earnings Growth Analysis

Earnings Trend: 1828's earnings have grown by 2.4% per year over the past 5 years.

Accelerating Growth: 1828's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 1828 had negative earnings growth (-13.3%) over the past year, making it difficult to compare to the Retail Distributors industry average (-22.7%).


Return on Equity

High ROE: 1828's Return on Equity (8.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Dah Chong Hong Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 1828's short term assets (HK$16.4B) exceed its short term liabilities (HK$11.3B).

Long Term Liabilities: 1828's short term assets (HK$16.4B) exceed its long term liabilities (HK$9.4B).


Debt to Equity History and Analysis

Debt Level: 1828's debt to equity ratio (74.2%) is considered high.

Reducing Debt: 1828's debt to equity ratio has reduced from 80% to 74.2% over the past 5 years.

Debt Coverage: 1828's debt is well covered by operating cash flow (27.3%).

Interest Coverage: 1828's interest payments on its debt are well covered by EBIT (3.8x coverage).


Balance Sheet

Inventory Level: 1828 has a high level of physical assets or inventory.

Debt Coverage by Assets: 1828's debt is covered by short term assets (assets are 2.2x debt).


Next Steps

Dividend

What is Dah Chong Hong Holdings's current dividend yield, its reliability and sustainability?

4.51%

Current Dividend Yield


Dividend Yield vs Market

company4.5%marketbottom25%2.3%markettop25%6.3%industryaverage3.9%forecastin3Years3.8%

Current dividend yield vs market & industry

Notable Dividend: 1828's dividend (4.51%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.17%).

High Dividend: 1828's dividend (4.51%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.02%).


Stability and Growth of Payments

Stable Dividend: 1828's dividend payments have been volatile in the past 10 years.

Growing Dividend: 1828's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (42.6%), 1828's dividend payments are well 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?

2.9yrs

Average management tenure


CEO

Frank Lai (57yo)

2.8yrs

Tenure

HK$10,182,000

Compensation

Mr. Ni Hium Lai, also known as Frank, has been the Chief Executive Officer at Dah Chong Hong Holdings Limited since March 1, 2017. Mr. Lai has been Executive Director at Dah Chong Hong Holdings Limited sin ...


CEO Compensation Analysis

Compensation vs Market: Frank's total compensation ($USD1.31M) is above average for companies of similar size in the Hong Kong market ($USD470.54K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Ni Hium Lai
CEO & Executive Director2.8yrsHK$10.18m0.041% HK$2.8m
Tak Wah Lee
Head of Motor2.8yrsHK$6.91mno data
Gwen Walters
Head of Corporate Communications & Investor Relations0yrsno datano data
Pui Leung
Head of Hong Kong Food Business & Corporate Director3yrsno datano data
Ying Wu
Chief Corporate Officer & Senior Corporate Director2.8yrsno datano data
Yiu Sai Kam
Company Secretary3.8yrsno datano data
Timothy Collins
Corporate Director and CEO of DCH Auriga Healthcare & IMSA Southeast Asia0yrsno datano data
Mabel Cheung
General Manager of Finance0yrsno datano data

2.9yrs

Average Tenure

55yo

Average Age

Experienced Management: 1828's management team is considered experienced (2.9 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Ni Hium Lai
CEO & Executive Director2.8yrsHK$10.18m0.041% HK$2.8m
Tak Wah Lee
Head of Motor2.8yrsHK$6.91mno data
Kay-Cheung Chan
Independent Non-Executive Director7.1yrsHK$420.00kno data
Hui Dor Lam Chan
Independent Non-Executive Director3.8yrsHK$420.00kno data
Ke Yin
Non-Executive Director1.3yrsno datano data
Chen Zeng
Chairman of the Board0.4yrsno datano data
Man Leung Kwok
Non-Executive Director12.5yrsno datano data
Yiping Fei
Non-Executive Director10yrsno datano data
Chin Wan Woo
Independent Non-Executive Director3.5yrsHK$420.00kno data
Lijun Zhang
Independent Non Executive Director1.8yrsHK$315.00kno data

3.5yrs

Average Tenure

56.5yo

Average Age

Experienced Board: 1828's board of directors are considered experienced (3.5 years average tenure).


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 not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Dah Chong Hong Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Dah Chong Hong Holdings Limited
  • Ticker: 1828
  • Exchange: SEHK
  • Founded: 1949
  • Industry: Distributors
  • Sector: Retail
  • Market Cap: HK$6.960b
  • Shares outstanding: 1.89b
  • Website: https://www.dch.com.hk

Number of Employees


Location

  • Dah Chong Hong Holdings Limited
  • DCH Building
  • 8th Floor
  • Kowloon Bay
  • Kowloon
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1828SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDOct 2007
49DDB (Deutsche Boerse AG)YesOrdinary SharesDEEUROct 2007
1828SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDOct 2007
1828SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDOct 2007
DAHC.YOTCPK (Pink Sheets LLC)UNSPONSORED ADRUSUSDJan 2012

Biography

Dah Chong Hong Holdings Limited operates as an integrated motor and consumer products distribution company in Hong Kong, Macao, Mainland China, and internationally. The company operates through Motor Business, Consumer Products Business, and Other Businesses segments. The Motor Business segment is involved in the motor vehicle distribution and dealership business; operation of independent service outlets, original equipment parts and used car trading, provision of after-sales services, motor leasing, sale of yachts, and environmental and engineering businesses; and airport and aviation support businesses. The Consumer Products Business segment engages in the trading and distribution of food commodities, fast moving consumer goods, consumer and healthcare products; food manufacturing and the retail of food products; and provision of integrated professional logistics and supply chain management solutions, and cold chain management services. The Other Businesses segment is involved in the property and other miscellaneous businesses. The company also provides management and finance leasing services; imports and exports garments; and imports, retails, and exports electrical appliances. The company was incorporated in 1949 and is headquartered in Kowloon Bay, Hong Kong.  


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/01/10 12:45
End of Day Share Price2019/12/24 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.