SEHK:590

Stock Analysis Report

NOT FOR DISTRIBUTION
Header cover image

Luk Fook Holdings (International)

Market Cap

HK$13.8b

Last Updated

2021/06/16 15:41 UTC

Data Sources

Company Financials +

Executive Summary

Luk Fook Holdings (International) Limited, an investment holding company, engages in sourcing, designing, wholesaling, trademark licensing, and retailing various gold and platinum jewelry, and gem-set jewelry products. More Details


Snowflake Analysis

Flawless balance sheet with reasonable growth potential.

Share Price & News

How has Luk Fook Holdings (International)'s share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 590 is not significantly more volatile than the rest of Hong Kong stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: 590's weekly volatility (5%) has been stable over the past year.


Market Performance


7 Day Return

2.0%

590

-1.0%

HK Specialty Retail

-1.2%

HK Market


1 Year Return

50.4%

590

58.3%

HK Specialty Retail

22.4%

HK Market

Return vs Industry: 590 underperformed the Hong Kong Specialty Retail industry which returned 58.3% over the past year.

Return vs Market: 590 exceeded the Hong Kong Market which returned 22.4% over the past year.


Shareholder returns

590IndustryMarket
7 Day2.0%-1.0%-1.2%
30 Day16.0%6.0%0.09%
90 Day15.5%8.4%-3.5%
1 Year58.9%50.4%62.5%58.3%27.1%22.4%
3 Year-12.5%-24.9%69.6%51.4%8.8%-2.7%
5 Year72.3%34.9%189.8%140.7%55.1%28.7%

Long-Term Price Volatility Vs. Market

How volatile is Luk Fook Holdings (International)'s share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Luk Fook Holdings (International) undervalued compared to its fair value and its price relative to the market?

20.87x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 590 (HK$23.5) is trading above our estimate of fair value (HK$14.5)

Significantly Below Fair Value: 590 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 590 is poor value based on its PE Ratio (20.9x) compared to the Hong Kong Specialty Retail industry average (16.3x).

PE vs Market: 590 is poor value based on its PE Ratio (20.9x) compared to the Hong Kong market (11.3x).


Price to Earnings Growth Ratio

PEG Ratio: 590 is good value based on its PEG Ratio (0.9x)


Price to Book Ratio

PB vs Industry: 590 is overvalued based on its PB Ratio (1.3x) compared to the HK Specialty Retail industry average (1x).


Future Growth

How is Luk Fook Holdings (International) forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

22.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 590's forecast earnings growth (22.6% per year) is above the savings rate (1.5%).

Earnings vs Market: 590's earnings (22.6% per year) are forecast to grow faster than the Hong Kong market (19.3% per year).

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

Revenue vs Market: 590's revenue (16.2% per year) is forecast to grow faster than the Hong Kong market (12.7% per year).

High Growth Revenue: 590's revenue (16.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 590's Return on Equity is forecast to be low in 3 years time (10.9%).


Past Performance

How has Luk Fook Holdings (International) performed over the past 5 years?

-0.07%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 590 has high quality earnings.

Growing Profit Margin: 590's current net profit margins (8%) are lower than last year (9.2%).


Past Earnings Growth Analysis

Earnings Trend: 590's earnings have declined by 0.07% per year over the past 5 years.

Accelerating Growth: 590's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 590 had negative earnings growth (-50%) over the past year, making it difficult to compare to the Specialty Retail industry average (-7.7%).


Return on Equity

High ROE: 590's Return on Equity (6.2%) is considered low.


Financial Health

How is Luk Fook Holdings (International)'s financial position?


Financial Position Analysis

Short Term Liabilities: 590's short term assets (HK$10.4B) exceed its short term liabilities (HK$2.4B).

Long Term Liabilities: 590's short term assets (HK$10.4B) exceed its long term liabilities (HK$338.3M).


Debt to Equity History and Analysis

Debt Level: 590's debt to equity ratio (6%) is considered satisfactory.

Reducing Debt: 590's debt to equity ratio has reduced from 8.8% to 6% over the past 5 years.

Debt Coverage: 590's debt is well covered by operating cash flow (404%).

Interest Coverage: 590 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet


Dividend

What is Luk Fook Holdings (International) current dividend yield, its reliability and sustainability?

1.91%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 590's dividend (1.91%) is higher than the bottom 25% of dividend payers in the Hong Kong market (1.87%).

High Dividend: 590's dividend (1.91%) is low compared to the top 25% of dividend payers in the Hong Kong market (5.97%).


Stability and Growth of Payments

Stable Dividend: 590's dividend payments have been volatile in the past 10 years.

Growing Dividend: 590's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (64.4%), 590's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 590's dividends in 3 years are forecast to be covered by earnings (54.4% payout ratio).


Next Steps

Management

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

10.8yrs

Average management tenure


CEO

Wai Sheung Wong (69 yo)

no data

Tenure

HK$54,930,000

Compensation

Mr. Wai Sheung Wong is the Founder of Luk Fook Holdings (International) Limited and serves as its Chief Executive Officer since December 1, 2018. He is a Co-Owner at Wong's Family Trust. Mr. Wong is respon...


CEO Compensation Analysis

Compensation vs Market: Wai Sheung's total compensation ($USD7.08M) is above average for companies of similar size in the Hong Kong market ($USD538.96K).

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


Leadership Team

Experienced Management: 590's management team is seasoned and experienced (10.8 years average tenure).


Board Members

Experienced Board: 590's board of directors are considered experienced (8.8 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: 590 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

Luk Fook Holdings (International) Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Luk Fook Holdings (International) Limited
  • Ticker: 590
  • Exchange: SEHK
  • Founded: 1991
  • Industry: Specialty Stores
  • Sector: Retail
  • Market Cap: HK$13.797b
  • Shares outstanding: 587.11m
  • Website: https://www.lukfook.com

Number of Employees


Location

  • Luk Fook Holdings (International) Limited
  • Metropole Square
  • 15th, 20th, 25th & 27th Floor
  • Sha Tin
  • New Territories
  • Hong Kong

Listings


Biography

Luk Fook Holdings (International) Limited, an investment holding company, engages in sourcing, designing, wholesaling, trademark licensing, and retailing various gold and platinum jewelry, and gem-set jewe...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/06/16 15:41
End of Day Share Price2021/06/16 00:00
Earnings2020/09/30
Annual Earnings2020/03/31


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.