SEHK:596

Stock Analysis Report

Inspur International

Executive Summary

Inspur International Limited, an investment holding company, provides software development, cloud, and Internet of Things (IoT) services in the People’s Republic of China.


Snowflake Analysis

Flawless balance sheet and undervalued.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 596's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-4.6%

596

6.2%

HK Software

4.0%

HK Market


1 Year Return

-47.1%

596

4.9%

HK Software

-20.1%

HK Market

Return vs Industry: 596 underperformed the Hong Kong Software industry which returned 4.9% over the past year.

Return vs Market: 596 underperformed the Hong Kong Market which returned -20.1% over the past year.


Shareholder returns

596IndustryMarket
7 Day-4.6%6.2%4.0%
30 Day-32.9%-5.3%-11.3%
90 Day-26.9%23.6%-15.6%
1 Year-46.4%-47.1%5.2%4.9%-17.2%-20.1%
3 Year40.5%34.9%31.4%30.0%-2.9%-12.7%
5 Year30.0%20.6%6.0%0.8%-6.8%-21.8%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Inspur 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: 596 (HK$2.28) is trading below our estimate of fair value (HK$6.33)

Significantly Below Fair Value: 596 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 596 is good value based on its PE Ratio (8.6x) compared to the Software industry average (15.3x).

PE vs Market: 596 is good value based on its PE Ratio (8.6x) compared to the Hong Kong market (9x).


Price to Earnings Growth Ratio

PEG Ratio: 596 is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: 596 is overvalued based on its PB Ratio (1.2x) compared to the HK Software industry average (1x).


Next Steps

Future Growth

How is Inspur International forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

21.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 596's forecast earnings growth (21.4% per year) is above the savings rate (1.6%).

Earnings vs Market: 596's earnings (21.4% per year) are forecast to grow faster than the Hong Kong market (12.8% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: 596's revenue (21.2% per year) is forecast to grow faster than the Hong Kong market (9.1% per year).

High Growth Revenue: 596's revenue (21.2% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 596's Return on Equity is forecast to be low in 3 years time (14.3%).


Next Steps

Past Performance

How has Inspur International performed over the past 5 years?

75.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 596 has high quality earnings.

Growing Profit Margin: 596's current net profit margins (11.1%) are lower than last year (11.4%).


Past Earnings Growth Analysis

Earnings Trend: 596 has become profitable over the past 5 years, growing earnings by 75.3% per year.

Accelerating Growth: 596's earnings growth over the past year (5%) is below its 5-year average (75.3% per year).

Earnings vs Industry: 596 earnings growth over the past year (5%) underperformed the Software industry 11.7%.


Return on Equity

High ROE: 596's Return on Equity (13.9%) is considered low.


Next Steps

Financial Health

How is Inspur International's financial position?


Financial Position Analysis

Short Term Liabilities: 596's short term assets (HK$1.8B) exceed its short term liabilities (HK$1.3B).

Long Term Liabilities: 596's short term assets (HK$1.8B) exceed its long term liabilities (HK$262.6M).


Debt to Equity History and Analysis

Debt Level: 596 is debt free.

Reducing Debt: 596 had no debt 5 years ago.

Debt Coverage: 596 has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: 596 has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: 596 has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if 596's debt is covered by short term assets.


Next Steps

Dividend

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

1.75%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 596's dividend (1.75%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.67%).

High Dividend: 596's dividend (1.75%) is low compared to the top 25% of dividend payers in the Hong Kong market (7.33%).


Stability and Growth of Payments

Stable Dividend: 596's dividend payments have been volatile in the past 10 years.

Growing Dividend: 596's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (15.1%), 596's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 596's dividends in 3 years are forecast to be thoroughly covered by earnings (12.6% payout ratio).


Next Steps

Management

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

5.1yrs

Average management tenure


CEO

Kong Eric (49yo)

1.58s

Tenure

HK$7,796,000

Compensation

Mr. Eric Kong Lee has been President, Chief Operating Officer and Executive Director of Inspur International Limited since August 1, 2017 and its Chief Executive Officer since August 17, 2018. Mr. Lee serv ...


CEO Compensation Analysis

Compensation vs Market: Kong's total compensation ($USD1.01M) is above average for companies of similar size in the Hong Kong market ($USD335.35K).

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


Leadership Team

NamePositionTenureCompensationOwnership
Xingshan Wang
Chairman7.92yrsHK$5.53mno data
Kong Eric
CEO, President1.58yrsHK$7.80mno data
Xiaozhou Jin
Executive Director4.58yrsHK$1.86mno data
Yuxin Zhang
Chief Financial Officer1.58yrsno datano data
Hailong Dong
Compliance Officer & Non-Executive Director6.67yrsHK$118.00k0.00035% HK$9.1k
Bo Zou
Joint Secretary8.58yrsno datano data
Wing Chan
Joint Secretary8.58yrsno datano data

5.1yrs

Average Tenure

48yo

Average Age

Experienced Management: 596's management team is seasoned and experienced (5.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Xingshan Wang
Chairman7.92yrsHK$5.53mno data
Kong Eric
CEO, President1.58yrsHK$7.80mno data
Xiaozhou Jin
Executive Director4.58yrsHK$1.86mno data
Hailong Dong
Compliance Officer & Non-Executive Director6.67yrsHK$118.00k0.00035% HK$9.1k
Lit Chor Wong
Independent Non Executive Director17yrsHK$247.00kno data
Ruijun Zhang
Independent Non-Executive Director5.92yrsHK$187.00kno data
Xiangqian Ding
Independent Non-Executive Director4.25yrsHK$187.00kno data

5.9yrs

Average Tenure

57yo

Average Age

Experienced Board: 596's board of directors are considered experienced (5.9 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.


Top Shareholders

Company Information

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


Key Information

  • Name: Inspur International Limited
  • Ticker: 596
  • Exchange: SEHK
  • Founded: 2003
  • Industry: Application Software
  • Sector: Software
  • Market Cap: HK$2.597b
  • Shares outstanding: 1.14b
  • Website: https://www.inspur.com.hk

Number of Employees


Location

  • Inspur International Limited
  • Tower A, Billion Center
  • Room B&C
  • Kowloon Bay
  • Kowloon
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
596SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDApr 2004
L1CCDB (Deutsche Boerse AG)YesOrdinary SharesDEEURApr 2004

Biography

Inspur International Limited, an investment holding company, provides software development, cloud, and Internet of Things (IoT) services in the People’s Republic of China. The company operates through Management Software and Cloud Services, and IoT Solutions segments. It is also involved in the trading of computer products, as well as sale of information technology peripherals and software; and property investment activities. The company was incorporated in 2003 and is based in Kowloon Bay, Hong Kong. Inspur International Limited is considered a Red Chip company due to its listing on the Hong Kong Stock Exchange. Inspur International Limited is a subsidiary of Inspur Overseas Investment Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/28 12:35
End of Day Share Price2020/03/27 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.