Founder Holdings (SEHK:418) - Share price, News & Analysis

418 fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	0/6
Past Performance	1/6
Financial Health	6/6
Dividends	0/6

418 Stock Overview

Rewards

Trading at 1.2% below our estimate of its fair value

Risk Analysis

Earnings have declined by 22.4% per year over past 5 years

Does not have a meaningful market cap (HK$708M)

Founder Holdings Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Founder Holdings
Historical stock prices
Current Share Price	HK$0.59
52 Week High	HK$1.10
52 Week Low	HK$0.55
Beta	0.60
1 Month Change	-9.23%
3 Month Change	-19.18%
1 Year Change	-18.06%
3 Year Change	51.28%
5 Year Change	1.72%
Change since IPO	-65.46%

Shareholder Returns

	418	HK Software	HK Market
7D	5.4%	2.5%	2.8%
1Y	-18.1%	-59.8%	-24.5%

Return vs Industry: 418 exceeded the Hong Kong Software industry which returned -59.8% over the past year.

Return vs Market: 418 exceeded the Hong Kong Market which returned -24.5% over the past year.

Price Volatility

Is 418's price volatile compared to industry and market?
418 volatility
418 Average Weekly Movement	6.4%
Software Industry Average Movement	12.5%
Market Average Movement	8.1%
10% most volatile stocks in HK Market	15.1%
10% least volatile stocks in HK Market	3.9%

Stable Share Price: 418 is not significantly more volatile than the rest of Hong Kong stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: 418's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
n/a	1,208	n/a	https://www.founder.com.hk

Founder Holdings Limited, an investment holding company, engages in the software development, system integration, and information products distribution activities in Mainland China, Hong Kong, and internationally. It also engages in the properties holding business. The company is headquartered in Tsuen Wan, Hong Kong.

Founder Holdings Fundamentals Summary

How do Founder Holdings's earnings and revenue compare to its market cap?
418 fundamental statistics
Market Cap	HK$707.85m
Earnings (TTM)	HK$43.48m
Revenue (TTM)	HK$1.07b

16.3x

P/E Ratio

0.7x

P/S Ratio

Is 418 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
418 income statement (TTM)
Revenue	HK$1.07b
Cost of Revenue	HK$566.18m
Gross Profit	HK$507.66m
Other Expenses	HK$464.18m
Earnings	HK$43.48m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.036
Gross Margin	47.28%
Net Profit Margin	4.05%
Debt/Equity Ratio	0%

How did 418 perform over the long term?

See historical performance and comparison

Valuation

Is Founder Holdings undervalued compared to its fair value and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

1.2%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: 418 (HK$0.59) is trading below our estimate of fair value (HK$0.6)

Significantly Below Fair Value: 418 is trading below fair value, but not by a significant amount.

Price To Earnings Ratio

PE vs Industry: 418 is poor value based on its PE Ratio (16.3x) compared to the Hong Kong Software industry average (13.1x).

PE vs Market: 418 is poor value based on its PE Ratio (16.3x) compared to the Hong Kong market (8.8x).

Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate 418's PEG Ratio to determine if it is good value.

Price to Book Ratio

PB vs Industry: 418 is good value based on its PB Ratio (0.6x) compared to the HK Software industry average (1.1x).

Future Growth

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

Future Growth Score

0/6

Future Growth Score 0/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

71.3%

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 Founder Holdings 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.

Past Performance

How has Founder Holdings performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-22.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 418 has high quality earnings.

Growing Profit Margin: 418's current net profit margins (4%) are lower than last year (5.8%).

Past Earnings Growth Analysis

Earnings Trend: 418's earnings have declined by 22.4% per year over the past 5 years.

Accelerating Growth: 418's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 418 had negative earnings growth (-19.3%) over the past year, making it difficult to compare to the Software industry average (0.8%).

Return on Equity

High ROE: 418's Return on Equity (4%) is considered low.

Financial Health

How is Founder Holdings's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 418's short term assets (HK$966.2M) exceed its short term liabilities (HK$417.4M).

Long Term Liabilities: 418's short term assets (HK$966.2M) exceed its long term liabilities (HK$56.0M).

Debt to Equity History and Analysis

Debt Level: 418 is debt free.

Reducing Debt: 418 has no debt compared to 5 years ago when its debt to equity ratio was 15.3%.

Debt Coverage: 418 has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: 418 has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

Dividend

What is Founder Holdings's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate 418's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate 418's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if 418's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if 418's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as 418 has not reported any payouts.

Next Steps

Explore strong dividend paying companies in the Software industry.

Management

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

5.3yrs

Average board tenure

CEO

Founder Holdings has no CEO, or we have no data on them.

Board Members

Experienced Board: 418's board of directors are considered experienced (5.3 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.

Ownership Breakdown

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

Data	Last Updated (UTC time)
Company Analysis	2022/05/18 00:00
End of Day Share Price	2022/05/18 00:00
Earnings	2021/12/31
Annual Earnings	2021/12/31