SEHK:354

Stock Analysis Report

Chinasoft International

Executive Summary

Chinasoft International Limited, together with its subsidiaries, develops and provides information technology (IT) solutions, IT outsourcing, and training services.


Snowflake Analysis

Excellent balance sheet and fair value.

Share Price & News

How has Chinasoft International's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 354's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

13.1%

354

7.4%

HK IT

4.0%

HK Market


1 Year Return

-16.1%

354

-31.1%

HK IT

-20.1%

HK Market

Return vs Industry: 354 exceeded the Hong Kong IT industry which returned -31.1% over the past year.

Return vs Market: 354 exceeded the Hong Kong Market which returned -20.1% over the past year.


Shareholder returns

354IndustryMarket
7 Day13.1%7.4%4.0%
30 Day-18.8%-14.8%-11.3%
90 Day-7.9%-20.2%-15.6%
1 Year-15.6%-16.1%-29.8%-31.1%-17.2%-20.1%
3 Year-7.9%-8.9%-29.1%-32.4%-2.9%-12.7%
5 Year28.7%27.2%-14.4%-19.1%-6.8%-21.8%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Chinasoft International 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: 354 (HK$4.07) is trading below our estimate of fair value (HK$16.77)

Significantly Below Fair Value: 354 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 354 is poor value based on its PE Ratio (12.1x) compared to the IT industry average (12.1x).

PE vs Market: 354 is poor value based on its PE Ratio (12.1x) compared to the Hong Kong market (9x).


Price to Earnings Growth Ratio

PEG Ratio: 354 is good value based on its PEG Ratio (0.7x)


Price to Book Ratio

PB vs Industry: 354 is overvalued based on its PB Ratio (1.4x) compared to the HK IT industry average (0.9x).


Next Steps

Future Growth

How is Chinasoft International forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

18.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 354's forecast earnings growth (18.3% per year) is above the savings rate (1.6%).

Earnings vs Market: 354's earnings (18.3% per year) are forecast to grow faster than the Hong Kong market (12.8% per year).

High Growth Earnings: 354's earnings are forecast to grow, but not significantly.

Revenue vs Market: 354's revenue (15.5% per year) is forecast to grow faster than the Hong Kong market (9.1% per year).

High Growth Revenue: 354's revenue (15.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 354's Return on Equity is forecast to be low in 3 years time (15.7%).


Next Steps

Past Performance

How has Chinasoft International performed over the past 5 years?

25.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 354 has high quality earnings.

Growing Profit Margin: 354's current net profit margins (6.3%) are lower than last year (6.8%).


Past Earnings Growth Analysis

Earnings Trend: 354's earnings have grown significantly by 25.1% per year over the past 5 years.

Accelerating Growth: 354's earnings growth over the past year (5.5%) is below its 5-year average (25.1% per year).

Earnings vs Industry: 354 earnings growth over the past year (5.5%) exceeded the IT industry -3.7%.


Return on Equity

High ROE: 354's Return on Equity (11.6%) is considered low.


Next Steps

Financial Health

How is Chinasoft International's financial position?


Financial Position Analysis

Short Term Liabilities: 354's short term assets (CN¥8.2B) exceed its short term liabilities (CN¥3.1B).

Long Term Liabilities: 354's short term assets (CN¥8.2B) exceed its long term liabilities (CN¥1.1B).


Debt to Equity History and Analysis

Debt Level: 354's debt to equity ratio (37.9%) is considered satisfactory.

Reducing Debt: 354's debt to equity ratio has reduced from 55.3% to 37.9% over the past 5 years.

Debt Coverage: 354's debt is not well covered by operating cash flow (18.1%).

Interest Coverage: 354's interest payments on its debt are well covered by EBIT (5x coverage).


Balance Sheet

Inventory Level: 354 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 354's debt is covered by short term assets (assets are 3.3x debt).


Next Steps

Dividend

What is Chinasoft International's current dividend yield, its reliability and sustainability?

0.54%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 354's dividend (0.54%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.67%).

High Dividend: 354's dividend (0.54%) is low compared to the top 25% of dividend payers in the Hong Kong market (7.33%).


Stability and Growth of Payments

Stable Dividend: 354 is not paying a notable dividend for the Hong Kong market, therefore no need to check if payments are stable.

Growing Dividend: 354 is not paying a notable dividend for the Hong Kong market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: 354 is not paying a notable dividend for the Hong Kong market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of 354's dividend in 3 years as they are not forecast to pay a notable one for the Hong Kong market.


Next Steps

Management

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

4.8yrs

Average board tenure


CEO

Henry Chen (56yo)

no data

Tenure

CN¥8,021,000

Compensation

Dr. Yuhong Chen, also known as Henry, PhD serves as the Chief Executive Officer of Chinasoft International Limited. Dr. Chen is responsible for the overall business development. Dr. Chen served as Managing ...


CEO Compensation Analysis

Compensation vs Market: Henry's total compensation ($USD1.13M) is above average for companies of similar size in the Hong Kong market ($USD446.01K).

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


Board Members

NamePositionTenureCompensationOwnership
Yuhong Chen
Chairman of the Board & CEOno dataCN¥8.02m10.74% CN¥1.1b
Zhenming Tang
Senior VP & Executive Director14.33yrsCN¥2.16m0.48% CN¥48.1m
Zhijie Zheng
Independent Non Executive Directorno dataCN¥102.00kno data
Ya-Qin Zhang
Non-Executive Director11.25yrsCN¥254.00k0.060% CN¥6.1m
Liangyu Gao
Non-Executive Director2.67yrsCN¥190.00kno data
Guanrong Lai
Independent Non-Executive Director4.75yrsCN¥254.00kno data
Lai Lan Mo
Independent Non-Executive Director1.58yrsCN¥96.00kno data
Gavriella Schuster
Non-Executive Director1.5yrsCN¥500.00kno data

4.8yrs

Average Tenure

56yo

Average Age

Experienced Board: 354's board of directors are considered experienced (4.8 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

Chinasoft International Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Chinasoft International Limited
  • Ticker: 354
  • Exchange: SEHK
  • Founded: 2000
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: HK$10.091b
  • Shares outstanding: 2.48b
  • Website: https://www.chinasofti.com

Number of Employees


Location

  • Chinasoft International Limited
  • Raycom Infotech Park Tower C
  • North Wing 12th Floor
  • Beijing
  • 100190
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
354SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJun 2003
CFTL.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJun 2003
354SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJun 2003
354SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJun 2003

Biography

Chinasoft International Limited, together with its subsidiaries, develops and provides information technology (IT) solutions, IT outsourcing, and training services. It operates through Technical Professional Services Group and Internet IT Services Group segments. The company offers ResourceOne and TopLink/TSA+ software, and Ark big data middleware platforms; strategic, business, and IT consulting services; and application software and solutions planning, design, development, integration, and operation and maintenance services. It also provides system integration, maintenance, and operation services; and product engineering, design, development, and quality assurance and testing services. In addition, the company offers enterprise application services; and packaged software implementation, customized development, maintenance and product upgradation, and business intelligence/data warehouse services. Further, it provides business, engineering, and knowledge process outsourcing services; mobile Internet product and service; cloud solutions; and big data related consulting, implementation, and development services. Additionally, the company offers JointForce, an Internet crowdsourcing platform; cloud migration, and operation and maintenance services; cloud consulting and SaaS customization services; and PaaS products that enables cloud development, integration, management, and serves as a portal to link with other cloud partners, as well as develops and trades standalone software and hardware products. It serves manufacturing circulation, financial services and banking, insurance and securities, telecommunications and Internet, public services, energy, and high-technology business industries, as well as government and enterprises in the People's Republic of China, the United States, Europe, and Japan. The company was founded in 2000 and is headquartered in Beijing, the People's Republic of China. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/28 12:36
End of Day Share Price2020/03/27 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.