SEHK:881

Stock Analysis Report

Zhongsheng Group Holdings

Executive Summary

Zhongsheng Group Holdings Limited, an investment holding company, engages in the sale and service of motor vehicles.

Snowflake

Fundamentals

Excellent balance sheet with reasonable growth potential.

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

1.0%

881

1.0%

HK Specialty Retail

3.1%

HK Market


1 Year Return

69.2%

881

1.4%

HK Specialty Retail

0.5%

HK Market

Return vs Industry: 881 exceeded the Hong Kong Specialty Retail industry which returned 1.4% over the past year.

Return vs Market: 881 exceeded the Hong Kong Market which returned 0.5% over the past year.


Shareholder returns

881IndustryMarket
7 Day1.0%1.0%3.1%
30 Day1.6%-3.9%-1.8%
90 Day23.2%-9.1%-4.8%
1 Year72.3%69.2%6.8%1.4%4.1%0.5%
3 Year253.7%235.3%20.1%6.5%15.8%4.2%
5 Year259.9%231.8%-9.6%-27.4%18.9%-0.9%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

13.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: 881 (HK$25.75) is trading below our estimate of fair value (HK$29.69)

Significantly Undervalued: 881 is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: 881 is poor value based on its PE Ratio (13.6x) compared to the Specialty Retail industry average (11.2x).

PE vs Market: 881 is poor value based on its PE Ratio (13.6x) compared to the Hong Kong market (10.3x).


Price to Earnings Growth Ratio

Low PEG Ratio: 881 is good value based on its PEG Ratio (0.7x)


Price to Book Ratio

PB vs Industry: 881 is overvalued based on its PB Ratio (2.7x) compared to the HK Specialty Retail industry average (0.7x).


Next Steps

Future Growth

How is Zhongsheng Group Holdings forecast to perform in the next 1 to 3 years based on estimates from 19 analysts?

18.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 881's forecast earnings growth (18.6% per year) is above the savings rate (2%).

Earnings vs Market: 881's earnings (18.6% per year) are forecast to grow faster than the Hong Kong market (11.3% per year).

High Growth Earnings: 881's earnings are forecast to grow, but not significantly.

Revenue vs Market: 881's revenue (10.9% per year) is forecast to grow faster than the Hong Kong market (10% per year).

High Growth Revenue: 881's revenue (10.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: 881's Return on Equity is forecast to be high in 3 years time (21.8%)


Next Steps

Past Performance

How has Zhongsheng Group Holdings performed over the past 5 years?

39.9%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: 881's earnings have grown significantly by 39.9% per year over the past 5 years.

Accelerating Growth: 881's earnings growth over the past year (1.3%) is below its 5-year average (39.9% per year).

Earnings vs Industry: 881 earnings growth over the past year (1.3%) underperformed the Specialty Retail industry 1.4%.


Return on Equity

High ROE: 881's Return on Equity (19.3%) is considered low.


Return on Assets

ROA vs Industry: 881 has a higher Return on Assets than the Specialty Retail industry average last year.


Return on Capital Employed

ROCE Improving: 881 has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Zhongsheng Group Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 881's short term assets (CN¥30.1B) exceeds its short term liabilities (CN¥26.6B)

Long Term Liabilities: 881's short term assets (30.1B) exceeds its long term liabilities (13.3B)


Debt to Equity History and Analysis

Debt Level: 881's debt to equity ratio (122.4%) is considered high

Reducing Debt: 881's debt to equity ratio has reduced from 156.2% to 122.4% over the past 5 years.

Debt Coverage: 881's debt is well covered by operating cash flow (28%).

Interest Coverage: 881's interest payments on its debt are well covered by EBIT (5.5x coverage).


Balance Sheet

Inventory Level: 881 has a high level of physical assets or inventory.

Debt Coverage by Assets: 881's debt is covered by short term assets (assets are 1.210720x debt).


Next Steps

Dividend

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

1.36%

Current Dividend Yield


Dividend Yield vs Market

company1.4%marketbottom25%2.3%markettop25%6.3%industryaverage6.0%forecastin3Years2.0%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: 881's dividend (1.36%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.27%).

High Dividend: 881's dividend (1.36%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.25%).

Stable Dividend: 881 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 881's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (18.7%), 881's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 881's dividends in 3 years are forecast to be well covered by earnings (20.8% payout ratio).


Next Steps

Management

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

12.8yrs

Average management tenure


CEO

Guoqiang Li (55yo)

21.8yrs

Tenure

CN¥13,762,000

Compensation

Mr. Li Guoqiang founded Zhongsheng Group Holdings Limited and serves as its Chief Executive Officer and President since 1998. Mr. Li is responsible for the overall management and operations of the Group. H ...


CEO Compensation Analysis

Compensation vs. Market: Guoqiang's total compensation ($USD1.94M) is about average for companies of similar size in the Hong Kong market ($USD607.90K).

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


Management Age and Tenure

12.8yrs

Average Tenure

55.5yo

Average Age

Experienced Management: 881's management team is seasoned and experienced (12.8 years average tenure).


Board Age and Tenure

8.5yrs

Average Tenure

56yo

Average Age

Experienced Board: 881's board of directors are considered experienced (8.5 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellCN¥173,247,25201 Aug 19
JPMorgan Chase & Co, Brokerage and Securities Investments
EntityCompany
Shares7,765,244
Max PriceCN¥22.31
BuyCN¥77,829,53731 Jul 19
JPMorgan Chase & Co, Brokerage and Securities Investments
EntityCompany
Shares3,579,373
Max PriceCN¥21.74
SellCN¥1,877,218,32224 Jul 19
JPMorgan Chase & Co, Brokerage and Securities Investments
EntityCompany
Shares88,958,829
Max PriceCN¥21.10
BuyCN¥5,047,054,00908 Jul 19
JPMorgan Chase & Co, Brokerage and Securities Investments
EntityCompany
Shares225,799,790
Max PriceCN¥22.35
BuyCN¥2,291,09924 May 19
Blue Natural Development Ltd
EntityCompany
Shares135,000
Max PriceCN¥16.97
BuyCN¥2,531,03323 May 19
Blue Natural Development Ltd
EntityCompany
Shares149,000
Max PriceCN¥16.99
BuyCN¥1,836,45023 May 19
Blue Natural Development Ltd
EntityCompany
Shares105,000
Max PriceCN¥17.49
SellCN¥56,778,79523 May 19
FIL Limited
EntityCompany
Shares3,172,000
Max PriceCN¥17.90
SellCN¥65,206,52211 Apr 19
FIL Limited
EntityCompany
Shares3,064,000
Max PriceCN¥21.28
SellCN¥1,950,00025 Mar 19
Siu Wa Chin
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares100,000
Max PriceCN¥19.50
BuyCN¥18,173,65518 Feb 19
FIL Limited
EntityCompany
Shares1,121,000
Max PriceCN¥16.21
BuyCN¥3,070,96530 Oct 18
Blue Natural Development Ltd
EntityCompany
Shares202,000
Max PriceCN¥15.20
BuyCN¥6,449,38930 Oct 18
Blue Natural Development Ltd
EntityCompany
Shares456,000
Max PriceCN¥14.14
BuyCN¥3,835,30222 Oct 18
Blue Natural Development Ltd
EntityCompany
Shares253,500
Max PriceCN¥15.13
BuyCN¥4,224,55119 Oct 18
Blue Natural Development Ltd
EntityCompany
Shares275,000
Max PriceCN¥15.36

Ownership Breakdown


Management Team

  • Zhicheng Zhang (46yo)

    VP of Luxury Brand Automobile Sales Business & Executive Director

    • Tenure: 5.6yrs
    • Compensation: CN¥19.64m
  • Yi Huang (56yo)

    Co-Founder & Chairman

    • Tenure: 21.8yrs
    • Compensation: CN¥10.80m
  • Qingshan Du (56yo)

    Deputy GM & Executive Director

    • Tenure: 11.3yrs
    • Compensation: CN¥19.64m
  • Guangming Yu (61yo)

    Deputy GM & Executive Director

    • Tenure: 11.3yrs
  • Guoqiang Li (55yo)

    Co-Founder

    • Tenure: 21.8yrs
    • Compensation: CN¥13.76m
  • Celia Mak (45yo)

    Joint Company Secretary

    • Tenure: 9.3yrs
  • Wei Si (56yo)

    Executive Director

    • Tenure: 7.2yrs
    • Compensation: CN¥724.00k
  • Shezhen Yan

    Head of Investor Relationship

    • Tenure: 0yrs
  • Zhenchao Yao (38yo)

    Chief Legal Officer & Joint Company Secretary

    • Tenure: 0yrs

Board Members

  • Kim Cheah (67yo)

    Non-Executive Director

    • Tenure: 2.3yrs
  • Zhicheng Zhang (46yo)

    VP of Luxury Brand Automobile Sales Business & Executive Director

    • Tenure: 5.6yrs
    • Compensation: CN¥19.64m
  • Wei Ying (53yo)

    Independent Non-Executive Director

    • Tenure: 2.8yrs
    • Compensation: CN¥214.00k
  • Yi Huang (56yo)

    Co-Founder & Chairman

    • Tenure: 21.8yrs
    • Compensation: CN¥10.80m
  • Qingshan Du (56yo)

    Deputy GM & Executive Director

    • Tenure: 11.3yrs
    • Compensation: CN¥19.64m
  • Guangming Yu (61yo)

    Deputy GM & Executive Director

    • Tenure: 11.3yrs
  • Jinjun Shen (61yo)

    Independent Non-Executive Director

    • Tenure: 9.9yrs
    • Compensation: CN¥214.00k
  • Guoqiang Li (55yo)

    Co-Founder

    • Tenure: 21.8yrs
    • Compensation: CN¥13.76m
  • Wei Si (56yo)

    Executive Director

    • Tenure: 7.2yrs
    • Compensation: CN¥724.00k
  • Alfred Chin (62yo)

    Independent Non-Executive Director

    • Tenure: 1.2yrs
    • Compensation: CN¥84.00k

Company Information

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


Key Information

  • Name: Zhongsheng Group Holdings Limited
  • Ticker: 881
  • Exchange: SEHK
  • Founded: 1998
  • Industry: Automotive Retail
  • Sector: Retail
  • Market Cap: HK$57.815b
  • Shares outstanding: 2.27b
  • Website: https://www.zs-group.com.cn

Number of Employees


Location

  • Zhongsheng Group Holdings Limited
  • No. 20 Hequ Street
  • Shahekou District
  • Dalian
  • Liaoning Province
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
881SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDMar 2010
5Z0DB (Deutsche Boerse AG)YesOrdinary SharesDEEURMar 2010
881SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDMar 2010
881SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDMar 2010
ZSHG.YOTCPK (Pink Sheets LLC)ADRUSUSDJul 2010

Biography

Zhongsheng Group Holdings Limited, an investment holding company, engages in the sale and service of motor vehicles. The company operates 4S dealerships for various automobile brands consisting of luxury a ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/17 12:50
End of Day Share Price2019/10/17 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.