SEHK:1588

Stock Analysis Report

Chanjet Information Technology

Executive Summary

Chanjet Information Technology Company Limited provides software and other related services to micro and small scale enterprises (MSEs) in Mainland China.


Snowflake Analysis

Flawless balance sheet and slightly overvalued.

Share Price & News

How has Chanjet Information Technology's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 1588 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-4.7%

1588

-0.8%

HK Software

2.7%

HK Market


1 Year Return

-7.7%

1588

-1.1%

HK Software

-19.8%

HK Market

Return vs Industry: 1588 underperformed the Hong Kong Software industry which returned -2.5% over the past year.

Return vs Market: 1588 exceeded the Hong Kong Market which returned -22% over the past year.


Shareholder returns

1588IndustryMarket
7 Day-4.7%-0.8%2.7%
30 Day-10.0%-4.2%-7.2%
90 Day22.9%22.1%-12.1%
1 Year-2.1%-7.7%-0.9%-1.1%-16.9%-19.8%
3 Year-0.1%-5.9%34.4%32.9%0.9%-9.3%
5 Year-66.9%-69.3%-13.1%-17.6%-12.6%-26.7%

Price Volatility Vs. Market

How volatile is Chanjet Information Technology's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Chanjet Information Technology 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: 1588 (HK$9.49) is trading below our estimate of fair value (HK$19.11)

Significantly Below Fair Value: 1588 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 1588 is poor value based on its PE Ratio (20.1x) compared to the Software industry average (16.2x).

PE vs Market: 1588 is poor value based on its PE Ratio (20.1x) compared to the Hong Kong market (9.1x).


Price to Earnings Growth Ratio

PEG Ratio: 1588 is poor value based on its PEG Ratio (2.2x)


Price to Book Ratio

PB vs Industry: 1588 is overvalued based on its PB Ratio (1.4x) compared to the HK Software industry average (1.2x).


Next Steps

Future Growth

How is Chanjet Information Technology forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

9.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1588's forecast earnings growth (9.3% per year) is above the savings rate (1.6%).

Earnings vs Market: 1588's earnings (9.3% per year) are forecast to grow slower than the Hong Kong market (11.7% per year).

High Growth Earnings: 1588's earnings are forecast to grow, but not significantly.

Revenue vs Market: 1588's revenue (10.6% per year) is forecast to grow faster than the Hong Kong market (9.7% per year).

High Growth Revenue: 1588's revenue (10.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 1588's Return on Equity is forecast to be low in 3 years time (8.1%).


Next Steps

Past Performance

How has Chanjet Information Technology performed over the past 5 years?

31.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1588 has a large one-off gain of CN¥23.8M impacting its December 31 2019 financial results.

Growing Profit Margin: 1588's current net profit margins (19.9%) are lower than last year (24.9%).


Past Earnings Growth Analysis

Earnings Trend: 1588's earnings have grown significantly by 31.1% per year over the past 5 years.

Accelerating Growth: 1588's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 1588 had negative earnings growth (-13.7%) over the past year, making it difficult to compare to the Software industry average (14.7%).


Return on Equity

High ROE: 1588's Return on Equity (7%) is considered low.


Next Steps

Financial Health

How is Chanjet Information Technology's financial position?


Financial Position Analysis

Short Term Liabilities: 1588's short term assets (CN¥1.4B) exceed its short term liabilities (CN¥273.3M).

Long Term Liabilities: 1588's short term assets (CN¥1.4B) exceed its long term liabilities (CN¥5.3M).


Debt to Equity History and Analysis

Debt Level: 1588 is debt free.

Reducing Debt: 1588 has not had any debt for past 5 years.

Debt Coverage: 1588 has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: 1588 has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

What is Chanjet Information Technology's current dividend yield, its reliability and sustainability?

4.64%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: 1588's dividend (4.61%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.7%).

High Dividend: 1588's dividend (4.61%) is low compared to the top 25% of dividend payers in the Hong Kong market (7.25%).


Stability and Growth of Payments

Stable Dividend: 1588 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 1588's dividend payments have increased, but the company has only paid a dividend for 5 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (92.7%), 1588's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 1588's dividends in 3 years are not forecast to be well covered by earnings (90.2% payout ratio).


Next Steps

Management

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

3.3yrs

Average management tenure


CEO

Yuchun Yang (45yo)

3.25s

Tenure

Mr. Yuchun Yang has been the Chief Executive Officer and President of Chanjet Information Technology Company Limited since January 9, 2017. Mr. Yang has been Executive Director of Chanjet Information Techn ...


Leadership Team

NamePositionTenureCompensationOwnership
Yuchun Yang
CEO, President & Executive Director3.25yrsno datano data
Jin Gao
CFO & Senior VP1.92yrsno datano data
Guoping Sun
Senior Vice President8.58yrsno datano data
Zhang Hong
Senior Vice President2.08yrsno datano data
Hai Ru
Senior Vice President1.08yrsno datano data
Hongtao You
VP & Joint Company Secretary8.58yrsno datano data
Wai Fung Ngai
Joint Company Secretary8.42yrsno datano data

3.3yrs

Average Tenure

45yo

Average Age

Experienced Management: 1588's management team is considered experienced (3.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Yuchun Yang
CEO, President & Executive Director3.25yrsno datano data
Xinping Guo
Chairman of the Supervisory Committeeno datano datano data
Zhengping Wu
Non-Executive Director10.08yrsno datano data
Wenjing Wang
Chairman10.08yrsno datano data
Shuning Chen
Independent Non-Executive Director2.58yrsCN¥150.00kno data
Yongyi Ma
Independent Supervisor6yrsCN¥60.00kno data
Chien-Wen Chen
Independent Non-Executive Director8.58yrsCN¥150.00kno data
Chun Fai Lau
Independent Non-Executive Director8.58yrsCN¥150.00kno data
Guangli Ruan
Independent Supervisor6yrsCN¥60.00kno data
Peilin Zhang
Shareholder Representative Supervisor3.92yrsno datano data

6.0yrs

Average Tenure

55yo

Average Age

Experienced Board: 1588's board of directors are considered experienced (6 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.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.1%.


Top Shareholders

Company Information

Chanjet Information Technology Company Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Chanjet Information Technology Company Limited
  • Ticker: 1588
  • Exchange: SEHK
  • Founded: 2005
  • Industry: Application Software
  • Sector: Software
  • Market Cap: HK$2.048b
  • Shares outstanding: 217.18m
  • Website: https://www.chanjet.com

Number of Employees


Location

  • Chanjet Information Technology Company Limited
  • Building 3
  • Floor 3
  • Beijing
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1588SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares Foreign ListedHKHKDJun 2014
C7DDB (Deutsche Boerse AG)YesForeign Shares Foreign ListedDEEURJun 2014

Biography

Chanjet Information Technology Company Limited provides software and other related services to micro and small scale enterprises (MSEs) in Mainland China. The company offers cloud services, including Chanjet Good Accountant, an artificial intelligence technology based financial application; T+ Cloud enterprise management services; Chanjet Good Business that provides online and offline marketing and transaction management services for MSEs in trade and commerce; Biz Chat; and Chanjet Easy Accounting Agent. It is also involved in the technical development, consulting, transfer, service, and training of computer software, hardware, and external devices; sale of typing paper, computer consumables, computer software, and hardware and external devices; provision of database services and information services of the second category value-added telecom business; and design, manufacturing, agency, and publication of advertisements. The company was formerly known as Chanjet Software Company Limited. Chanjet Information Technology Company Limited was founded in 2005 and is headquartered in Beijing, China. Chanjet Information Technology Company Limited is a subsidiary of Yonyou Network Technology Co., Ltd. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/07 13:37
End of Day Share Price2020/04/07 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.