SEHK:1985

Stock Analysis Report

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Executive Summary

Microware Group Limited, an investment holding company, provides information technology (IT) infrastructure solutions and IT managed services for the governments, educational institutions, public bodies, and commercial organizations in Hong Kong. More Details


Snowflake Analysis

Outstanding track record with excellent balance sheet.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 1985 is not significantly more volatile than the rest of Hong Kong stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: 1985's weekly volatility (8%) has been stable over the past year.


Market Performance


7 Day Return

6.6%

1985

7.5%

HK IT

5.7%

HK Market


1 Year Return

11.0%

1985

23.0%

HK IT

14.3%

HK Market

Return vs Industry: 1985 underperformed the Hong Kong IT industry which returned 23% over the past year.

Return vs Market: 1985 underperformed the Hong Kong Market which returned 14.3% over the past year.


Shareholder returns

1985IndustryMarket
7 Day6.6%7.5%5.7%
30 Day3.8%9.2%13.6%
90 Day8.0%17.7%19.6%
1 Year31.6%11.0%25.4%23.0%18.9%14.3%
3 Year-6.8%-33.1%-8.0%-12.7%-2.9%-13.1%
5 Yearn/a48.9%32.8%70.9%42.2%

Long-Term Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Microware 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: 1985 (HK$0.81) is trading below our estimate of fair value (HK$27.58)

Significantly Below Fair Value: 1985 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 1985 is good value based on its PE Ratio (4.9x) compared to the HK IT industry average (13.3x).

PE vs Market: 1985 is good value based on its PE Ratio (4.9x) compared to the Hong Kong market (11.9x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 1985's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: 1985's PB Ratio (1.2x) is in line with the HK IT industry average.


Next Steps

Future Growth

How is Microware Group forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

36.1%

Forecasted Software industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Microware Group has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has Microware Group performed over the past 5 years?

17.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1985 has high quality earnings.

Growing Profit Margin: 1985's current net profit margins (3.9%) are higher than last year (2.4%).


Past Earnings Growth Analysis

Earnings Trend: 1985's earnings have grown by 17.6% per year over the past 5 years.

Accelerating Growth: 1985's earnings growth over the past year (59.6%) exceeds its 5-year average (17.6% per year).

Earnings vs Industry: 1985 earnings growth over the past year (59.6%) exceeded the IT industry -7.6%.


Return on Equity

High ROE: 1985's Return on Equity (23.5%) is considered high.


Next Steps

Financial Health

How is Microware Group's financial position?


Financial Position Analysis

Short Term Liabilities: 1985's short term assets (HK$456.4M) exceed its short term liabilities (HK$253.0M).

Long Term Liabilities: 1985's short term assets (HK$456.4M) exceed its long term liabilities (HK$3.7M).


Debt to Equity History and Analysis

Debt Level: 1985's debt to equity ratio (0.5%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if 1985's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: 1985's debt is well covered by operating cash flow (10713.5%).

Interest Coverage: 1985 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

What is Microware Group current dividend yield, its reliability and sustainability?

12.35%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 1985's dividend (12.35%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.04%).

High Dividend: 1985's dividend (12.35%) is in the top 25% of dividend payers in the Hong Kong market (6.52%)


Stability and Growth of Payments

Stable Dividend: 1985 has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: 1985's dividend payments have increased, but the company has only paid a dividend for 3 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (78.3%), 1985's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

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

4.7yrs

Average management tenure


CEO

Ming Ho Chu (50 yo)

4.67yrs

Tenure

HK$5,026,000

Compensation

Mr. Ming Ho Chu has been Chairman, Chief Executive Officer and Executive Director at Microware Group Limited since May 25, 2016. Since January 2006, Mr. Chu is the Managing Director of Microware Ltd. and h...


CEO Compensation Analysis

Compensation vs Market: Ming Ho's total compensation ($USD648.39K) is above average for companies of similar size in the Hong Kong market ($USD230.00K).

Compensation vs Earnings: Ming Ho's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Ming Ho Chu
Chairman & CEO4.67yrsHK$5.03m3.83%
HK$ 9.0m
Shun Tsing Yang
Executive Director5yrsHK$600.00k68.29%
HK$ 159.8m
Wai Hing Chan
CFO & Company Secretary14yrsno datano data

4.7yrs

Average Tenure

50yo

Average Age

Experienced Management: 1985's management team is considered experienced (4.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Ming Ho Chu
Chairman & CEO4.67yrsHK$5.03m3.83%
HK$ 9.0m
Shun Tsing Yang
Executive Director5yrsHK$600.00k68.29%
HK$ 159.8m
King Hang Li
Independent Non-Executive Director3.92yrsHK$121.00kno data
Wai Man Li
Independent Non-Executive Director3.92yrsHK$121.00kno data
Yiu Hon Wan
Non-Executive Director4.67yrsHK$121.00kno data
Tak Chung Cheng
Independent Non-Executive Director3.92yrsHK$121.00kno data

4.3yrs

Average Tenure

62yo

Average Age

Experienced Board: 1985's board of directors are considered experienced (4.3 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.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

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


Key Information

  • Name: Microware Group Limited
  • Ticker: 1985
  • Exchange: SEHK
  • Founded: 2016
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: HK$234.000m
  • Shares outstanding: 300.00m
  • Website: https://www.microware1985.com

Number of Employees


Location

  • Microware Group Limited
  • Century Centre
  • 1st Floor
  • Kwun Tong
  • Kowloon
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1985SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary sharesHKHKDMar 2017

Biography

Microware Group Limited, an investment holding company, provides information technology (IT) infrastructure solutions and IT managed services for the governments, educational institutions, public bodies, a...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/01/21 10:19
End of Day Share Price2021/01/21 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.