Chanjet Information Technology Valuation

Q: What is the Fair Price of 1588 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

1588 (HK$4.6) is trading below our estimate of [[fair value]] (HK$31.03)

Is 1588 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Below Fair Value
Significantly Below Fair Value
Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of 1588 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 1588 (HK$4.6) is trading below our estimate of fair value (HK$31.03)

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

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 1588?

Key metric: As 1588 is unprofitable we use its Price-To-Sales Ratio for relative valuation analysis.

The above table shows the Price to Sales ratio for 1588. This is calculated by dividing 1588's market cap by their current revenue.
What is 1588's PS Ratio?
PS Ratio	1.6x
Sales	CN¥877.93m
Market Cap	CN¥1.39b

1588 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	0.7x
Enterprise Value/EBITDA	-10.4x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

How does 1588's PS Ratio compare to its peers?

The above table shows the PS ratio for 1588 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PS	Estimated Growth	Market Cap
Peer Average	1.8x
2567 Qiniu	1.2x	n/a	HK$1.8b
9669 Beisen Holding	3x	15.0%	HK$2.9b
2121 AInnovation Technology Group	1.8x	20.7%	HK$2.8b
418 Founder Holdings	1x	n/a	HK$1.0b
1588 Chanjet Information Technology	1.6x	15.4%	HK$1.5b

Price-To-Sales vs Peers: 1588 is good value based on its Price-To-Sales Ratio (1.6x) compared to the peer average (1.8x).

Price to Sales Ratio vs Industry

How does 1588's PS Ratio compare vs other companies in the HK Software Industry?

3 Companies	Price / Sales	Estimated Growth	Market Cap
6638 OneConnect Financial Technology	0.3x	-6.0%	US$100.72m
1933 OneForce Holdings	0.2x	n/a	US$11.39m
8060 Global Link Communications Holdings	0.2x	n/a	US$3.52m

No more companies available in this PS range

3 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Sales vs Industry: 1588 is good value based on its Price-To-Sales Ratio (1.6x) compared to the Hong Kong Software industry average (1.6x).

Price to Sales Ratio vs Fair Ratio

What is 1588's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

1588 PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	1.6x
Fair PS Ratio	1.7x

Price-To-Sales vs Fair Ratio: 1588 is good value based on its Price-To-Sales Ratio (1.6x) compared to the estimated Fair Price-To-Sales Ratio (1.7x).

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.

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