SEHK:6865

Stock Analysis Report

Executive Summary

Flat Glass Group Co., Ltd., together with its subsidiaries, engages in the design, development, production, and sale of glass products in the People's Republic of China, Europe, North America, and internationally.

Rewards

Trading at 71.4% below its fair value

Earnings are forecast to grow 38.65% per year

Earnings grew by 56.8% over the past year

Risk Analysis

Debt is not well covered by operating cash flow

High level of non-cash earnings

Shareholders have been diluted in the past year



Snowflake Analysis

Exceptional growth potential and good value.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 6865 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

8.3%

6865

8.0%

HK Semiconductor

0.6%

HK Market


1 Year Return

121.9%

6865

39.2%

HK Semiconductor

-0.06%

HK Market

Return vs Industry: 6865 exceeded the Hong Kong Semiconductor industry which returned 39.2% over the past year.

Return vs Market: 6865 exceeded the Hong Kong Market which returned -0.1% over the past year.


Shareholder returns

6865IndustryMarket
7 Day8.3%8.0%0.6%
30 Day12.3%8.8%-3.6%
90 Day-0.4%8.4%-0.01%
1 Year126.7%121.9%41.2%39.2%3.5%-0.06%
3 Year168.5%150.6%33.1%26.7%19.5%7.4%
5 Yearn/a5.5%-3.4%18.4%-1.4%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Flat Glass Group 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: 6865 (HK$4.46) is trading below our estimate of fair value (HK$15.57)

Significantly Below Fair Value: 6865 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 6865 is good value based on its PE Ratio (12.1x) compared to the Semiconductor industry average (14.5x).

PE vs Market: 6865 is poor value based on its PE Ratio (12.1x) compared to the Hong Kong market (10.2x).


Price to Earnings Growth Ratio

PEG Ratio: 6865 is good value based on its PEG Ratio (0.3x)


Price to Book Ratio

PB vs Industry: 6865 is overvalued based on its PB Ratio (1.9x) compared to the HK Semiconductor industry average (1.3x).


Next Steps

Future Growth

How is Flat Glass Group forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

38.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 6865's forecast earnings growth (38.7% per year) is above the savings rate (1.6%).

Earnings vs Market: 6865's earnings (38.7% per year) are forecast to grow faster than the Hong Kong market (11.9% per year).

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

Revenue vs Market: 6865's revenue (26.5% per year) is forecast to grow faster than the Hong Kong market (9.8% per year).

High Growth Revenue: 6865's revenue (26.5% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 6865's Return on Equity is forecast to be high in 3 years time (23.3%)


Next Steps

Past Performance

How has Flat Glass Group performed over the past 5 years?

-0.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 6865 has a high level of non-cash earnings.

Growing Profit Margin: 6865's current net profit margins (15.1%) are higher than last year (13.3%).


Past Earnings Growth Analysis

Earnings Trend: 6865's earnings have declined by -0.9% per year over the past 5 years.

Accelerating Growth: 6865's earnings growth over the past year (56.8%) exceeds its 5-year average (-0.9% per year).

Earnings vs Industry: 6865 earnings growth over the past year (56.8%) exceeded the Semiconductor industry 5.3%.


Return on Equity

High ROE: 6865's Return on Equity (14.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Flat Glass Group's financial position?


Financial Position Analysis

Short Term Liabilities: 6865's short term assets (CN¥4.0B) exceed its short term liabilities (CN¥3.8B).

Long Term Liabilities: 6865's short term assets (CN¥4.0B) exceed its long term liabilities (CN¥330.1M).


Debt to Equity History and Analysis

Debt Level: 6865's debt to equity ratio (47.1%) is considered high.

Reducing Debt: 6865's debt to equity ratio has reduced from 68.5% to 47.1% over the past 5 years.

Debt Coverage: 6865's debt is not well covered by operating cash flow (14.1%).

Interest Coverage: 6865's interest payments on its debt are well covered by EBIT (23.3x coverage).


Balance Sheet

Inventory Level: 6865 has a high level of physical assets or inventory.

Debt Coverage by Assets: 6865's debt is covered by short term assets (assets are 1.9x debt).


Next Steps

Dividend

What is Flat Glass Group's current dividend yield, its reliability and sustainability?

1.35%

Current Dividend Yield


Dividend Yield vs Market

company1.3%marketbottom25%2.3%markettop25%6.3%industryaverage2.1%forecastin3Years2.6%

Current dividend yield vs market & industry

Notable Dividend: 6865's dividend (1.35%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.26%).

High Dividend: 6865's dividend (1.35%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.26%).


Stability and Growth of Payments

Stable Dividend: 6865 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 6865 has only been paying a dividend for 4 years, and since then payments have fallen.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (21.8%), 6865's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 6865's dividends in 3 years are forecast to be well covered by earnings (26.2% payout ratio).


Next Steps

Management

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

21.5yrs

Average management tenure


CEO

Hongliang Ruan (57yo)

14yrs

Tenure

CN¥860,000

Compensation

Mr. Hongliang Ruan founded Flat Glass Group Co., Ltd. and serves as its General Manager, Chief Executive and Chairman of the Board. Mr. Ruan has experience in glass industry. He has been a Director and Gen ...


CEO Compensation Analysis

Compensation vs Market: Hongliang's total compensation ($USD122.24K) is below average for companies of similar size in the Hong Kong market ($USD511.20K).

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


Management Age and Tenure

21.5yrs

Average Tenure

57yo

Average Age

Experienced Management: 6865's management team is seasoned and experienced (21.5 years average tenure).


Board Age and Tenure

4.9yrs

Average Tenure

56.5yo

Average Age

Experienced Board: 6865's board of directors are considered experienced (4.9 years average tenure).


Insider Trading

Insider Buying: 6865 insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyCN¥1,466,53131 Oct 19
Hongliang Ruan
EntityIndividual
Role
Chief Executive Officer
Founder
Shares389,000
Max PriceCN¥3.77
BuyCN¥111,90031 Oct 19
Hongliang Ruan
EntityIndividual
Role
Chief Executive Officer
Founder
Shares30,000
Max PriceCN¥3.73
SellCN¥1,104,83329 Oct 19
UBS Asset Management
EntityCompany
Shares283,000
Max PriceCN¥3.90
BuyCN¥739,25119 Jul 19
UBS Asset Management
EntityCompany
Shares205,000
Max PriceCN¥3.61
BuyCN¥1,624,42505 Jul 19
UBS Asset Management
EntityCompany
Shares417,000
Max PriceCN¥3.90
BuyCN¥7,254,73905 Jul 19
Pacific Asset Management Co., Ltd.
EntityCompany
Shares1,856,000
Max PriceCN¥3.91
SellCN¥19,554,45711 Mar 19
Zhejiang Longsheng Group Co., Ltd.
EntityCompany
Shares5,499,000
Max PriceCN¥3.56
SellCN¥16,686,01006 Mar 19
Zhejiang Longsheng Group Co., Ltd.
EntityCompany
Shares4,500,000
Max PriceCN¥3.71
SellCN¥16,798,49705 Mar 19
Zhejiang Longsheng Group Co., Ltd.
EntityCompany
Shares4,500,000
Max PriceCN¥3.73
SellCN¥17,316,00704 Mar 19
Zhejiang Longsheng Group Co., Ltd.
EntityCompany
Shares4,500,000
Max PriceCN¥3.85
SellCN¥14,225,83601 Mar 19
Zhejiang Longsheng Group Co., Ltd.
EntityCompany
Shares4,500,000
Max PriceCN¥3.16
SellCN¥13,900,49027 Feb 19
Zhejiang Longsheng Group Co., Ltd.
EntityCompany
Shares4,500,000
Max PriceCN¥3.09
SellCN¥9,820,31725 Feb 19
Zhejiang Longsheng Group Co., Ltd.
EntityCompany
Shares3,501,000
Max PriceCN¥2.81
BuyCN¥52,000,06622 Feb 19
Greenwoods China Alpha Master Fund
EntityCompany
Shares20,000,000
Max PriceCN¥2.60
SellCN¥56,922,23920 Feb 19
Zhejiang Longsheng Group Co., Ltd.
EntityCompany
Shares20,989,000
Max PriceCN¥2.71
BuyCN¥12,964,11701 Feb 19
CICC Pucheng Investment Co., Ltd.
EntityCompany
Shares5,140,000
Max PriceCN¥2.52
SellCN¥12,749,99301 Feb 19
Zhejiang Longsheng Group Co., Ltd.
EntityCompany
Shares5,000,000
Max PriceCN¥2.55
SellCN¥11,700,00921 Jan 19
Zhejiang Longsheng Group Co., Ltd.
EntityCompany
Shares5,000,000
Max PriceCN¥2.34
BuyCN¥41,960,61308 Jan 19
Wenfang Zhang
EntityIndividual
Shares19,073,000
Max PriceCN¥2.20

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5.3%.


Management Team

  • Jinhua Jiang (58yo)

    Deputy Chairman & Deputy GM

    • Tenure: 14yrs
    • Compensation: CN¥698.00k
  • Yezhong Wei (47yo)

    Co-Founder

    • Tenure: 10.3yrs
    • Compensation: CN¥622.00k
  • Qifu Shen (53yo)

    Executive Director

    • Tenure: 4.9yrs
    • Compensation: CN¥596.00k
  • Wenrong Zheng (56yo)

    Co-Founder & Chairman of Board of Supervisors

    • Tenure: 4.9yrs
    • Compensation: CN¥280.00k
  • Fuquan Shen (59yo)

    Co-Founder & Supervisor

    • Tenure: 4.9yrs
    • Compensation: CN¥280.00k
  • Quanming Zhu (65yo)

    Co-Founder & Supervisor

    • Tenure: 4.9yrs
    • Compensation: CN¥242.00k
  • Xinhua Chen

    • Tenure: 21.5yrs
  • Haiming Zou

    • Tenure: 21.5yrs
  • Hui Fen Wang

    • Tenure: 21.5yrs
  • Hongliang Ruan (57yo)

    Founder

    • Tenure: 14yrs
    • Compensation: CN¥860.00k

Board Members

  • Frankie Ng (65yo)

    Independent Non-Executive Director

    • Tenure: 4.9yrs
    • Compensation: CN¥80.00k
  • Jinhua Jiang (58yo)

    Deputy Chairman & Deputy GM

    • Tenure: 14yrs
    • Compensation: CN¥698.00k
  • Yezhong Wei (47yo)

    Co-Founder

    • Tenure: 10.3yrs
    • Compensation: CN¥622.00k
  • Qifu Shen (53yo)

    Executive Director

    • Tenure: 4.9yrs
    • Compensation: CN¥596.00k
  • Wenrong Zheng (56yo)

    Co-Founder & Chairman of Board of Supervisors

    • Tenure: 4.9yrs
    • Compensation: CN¥280.00k
  • Fuquan Shen (59yo)

    Co-Founder & Supervisor

    • Tenure: 4.9yrs
    • Compensation: CN¥280.00k
  • Quanming Zhu (65yo)

    Co-Founder & Supervisor

    • Tenure: 4.9yrs
    • Compensation: CN¥242.00k
  • Hongliang Ruan (57yo)

    Founder

    • Tenure: 14yrs
    • Compensation: CN¥860.00k
  • Xiaozhong Cui (49yo)

    Independent Non-Executive Director

    • Tenure: 3.1yrs
    • Compensation: CN¥80.00
  • Hua Fulan (56yo)

    Independent Non-executive Director

    • Tenure: 1.1yrs

Company Information

Flat Glass Group Co., Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Flat Glass Group Co., Ltd.
  • Ticker: 6865
  • Exchange: SEHK
  • Founded: 1998
  • Industry: Semiconductors
  • Sector: Semiconductors
  • Market Cap: HK$20.476b
  • Shares outstanding: 1.95b
  • Website: https://www.flatgroup.com.cn

Number of Employees


Location

  • Flat Glass Group Co., Ltd.
  • 1999 Yunhe Road
  • Xiuzhou District
  • Jiaxing
  • Zhejiang Province
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
6865SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares- Foreign ListedHKHKDNov 2015
6865SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesForeign Shares- Foreign ListedHKHKDNov 2015
6865SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesForeign Shares- Foreign ListedHKHKDNov 2015
601865SHSE (Shanghai Stock Exchange)Domestic SharesCNCNYFeb 2019
601865XSSC (Shanghai Stock Exchange - Shanghai - Hong Kong Stock Connect)Domestic SharesCNCNYFeb 2019

Biography

Flat Glass Group Co., Ltd., together with its subsidiaries, engages in the design, development, production, and sale of glass products in the People's Republic of China, Europe, North America, and internat ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/09 12:52
End of Day Share Price2019/12/09 00:00
Earnings2019/09/30
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.