company background image
861

Digital China HoldingsSEHK:861 Stock Report

Market Cap

HK$7.1b

7D

-0.7%

1Y

-25.8%

Updated

25 Oct, 2021

Data

Company Financials +
861 fundamental analysis
Snowflake Score
Valuation2/6
Future Growth5/6
Past Performance1/6
Financial Health6/6
Dividends2/6

861 Overview

Digital China Holdings Limited, an investment holding company, provides information technology (IT) services primarily in Mainland China.

Digital China Holdings Competitors

TD SYNNEX

NYSE:SNX

US$10.1b

Arrow Electronics

NYSE:ARW

US$8.6b

Avnet

NasdaqGS:AVT

US$3.8b

Redington (India)

NSEI:REDINGTON

₹111.9b

Price History & Performance

Summary of all time highs, changes and price drops for Digital China Holdings
Historical stock prices
Current Share PriceHK$4.26
52 Week HighHK$4.08
52 Week LowHK$7.06
Beta0.78
1 Month Change-1.16%
3 Month Change-4.91%
1 Year Change-25.78%
3 Year Change16.71%
5 Year Change-34.56%
Change since IPO6.50%

Recent News & Updates

Aug 17
Investors Could Be Concerned With Digital China Holdings' (HKG:861) Returns On Capital

Investors Could Be Concerned With Digital China Holdings' (HKG:861) Returns On Capital

If we want to find a potential multi-bagger, often there are underlying trends that can provide clues. Firstly, we'd...

Jul 09
Should You Be Adding Digital China Holdings (HKG:861) To Your Watchlist Today?

Should You Be Adding Digital China Holdings (HKG:861) To Your Watchlist Today?

Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story...

Shareholder Returns

861HK ITHK Market
7D-0.7%-1.0%0.4%
1Y-25.8%7.9%6.7%

Return vs Industry: 861 underperformed the Hong Kong IT industry which returned 10.9% over the past year.

Return vs Market: 861 underperformed the Hong Kong Market which returned 5.9% over the past year.

Price Volatility

Is 861's price volatile compared to industry and market?
861 volatility
861 Beta0.78
Industry Beta0.91
Market Beta1

Stable Share Price: 861 is not significantly more volatile than the rest of Hong Kong stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: 861's weekly volatility (5%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
200014,100Wei Guohttps://www.dcholdings.com

Digital China Holdings Limited, an investment holding company, provides information technology (IT) services primarily in Mainland China. The company operates through five segments: DCITS, Smart Industry Chain Business, Sm@rt City Business, Investing Business, and Other Business. The DCITS segment provides system development, maintenance, industry cloud, and infrastructure development services for the banking industry; and technical, application software development, and industry cloud construction and operation services for government, enterprises, and agriculture clients.

Digital China Holdings Fundamentals Summary

How do Digital China Holdings's earnings and revenue compare to its market cap?
861 fundamental statistics
Market CapHK$7.13b
Earnings (TTM)HK$589.82m
Revenue (TTM)HK$20.14b

12.1x

P/E Ratio

0.4x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
861 income statement (TTM)
RevenueHK$20.14b
Cost of RevenueHK$16.50b
Gross ProfitHK$3.64b
ExpensesHK$3.05b
EarningsHK$589.82m

Last Reported Earnings

Jun 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)0.35
Gross Margin18.06%
Net Profit Margin2.93%
Debt/Equity Ratio25.3%

How did 861 perform over the long term?

See historical performance and comparison

Dividends

2.8%

Current Dividend Yield

32%

Payout Ratio

Valuation

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

12.09x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 861 (HK$4.26) is trading above our estimate of fair value (HK$2.93)

Significantly Below Fair Value: 861 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 861 is poor value based on its PE Ratio (12.1x) compared to the Hong Kong IT industry average (11.7x).

PE vs Market: 861 is poor value based on its PE Ratio (12.1x) compared to the Hong Kong market (9.7x).


Price to Earnings Growth Ratio

PEG Ratio: 861 is good value based on its PEG Ratio (0.4x)


Price to Book Ratio

PB vs Industry: 861 is good value based on its PB Ratio (0.7x) compared to the HK IT industry average (1.4x).


Future Growth

How is Digital China Holdings forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

27.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 861's forecast earnings growth (27.1% per year) is above the savings rate (1.5%).

Earnings vs Market: 861's earnings (27.1% per year) are forecast to grow faster than the Hong Kong market (17.7% per year).

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

Revenue vs Market: 861's revenue (23.3% per year) is forecast to grow faster than the Hong Kong market (12.5% per year).

High Growth Revenue: 861's revenue (23.3% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if 861's Return on Equity is forecast to be high in 3 years time


Past Performance

How has Digital China Holdings performed over the past 5 years?

65.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 861 has a large one-off gain of HK$561.3M impacting its June 30 2021 financial results.

Growing Profit Margin: 861's current net profit margins (2.9%) are lower than last year (2.9%).


Past Earnings Growth Analysis

Earnings Trend: 861 has become profitable over the past 5 years, growing earnings by 65.8% per year.

Accelerating Growth: 861's earnings growth over the past year (8.2%) is below its 5-year average (65.8% per year).

Earnings vs Industry: 861 earnings growth over the past year (8.2%) underperformed the IT industry 18.9%.


Return on Equity

High ROE: 861's Return on Equity (6.6%) is considered low.


Financial Health

How is Digital China Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 861's short term assets (HK$14.0B) exceed its short term liabilities (HK$9.8B).

Long Term Liabilities: 861's short term assets (HK$14.0B) exceed its long term liabilities (HK$3.5B).


Debt to Equity History and Analysis

Debt Level: 861's debt to equity ratio (25.3%) is considered satisfactory.

Reducing Debt: 861's debt to equity ratio has reduced from 88% to 25.3% over the past 5 years.

Debt Coverage: 861's debt is well covered by operating cash flow (25.8%).

Interest Coverage: 861's interest payments on its debt are well covered by EBIT (4.4x coverage).


Balance Sheet


Dividend

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

2.82%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 861's dividend (2.82%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.22%).

High Dividend: 861's dividend (2.82%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.77%).


Stability and Growth of Payments

Stable Dividend: 861's dividend payments have been volatile in the past 10 years.

Growing Dividend: 861's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (32.1%), 861's dividend payments are well 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?

3.8yrs

Average board tenure


CEO

Wei Guo (58 yo)

3.33yrs

Tenure

HK$35,586,000

Compensation

Mr. Wei Guo has been the Chairman of Digital China Holdings Limited since December 19, 2007 and has been its Chief Executive Officer since June 8, 2018. Mr. Guo has been the Chairman and President of Digit...


CEO Compensation Analysis

Compensation vs Market: Wei's total compensation ($USD4.58M) is above average for companies of similar size in the Hong Kong market ($USD442.78K).

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


Board Members

Experienced Board: 861's board of directors are considered experienced (3.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: 861 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

Digital China Holdings Limited's employee growth, exchange listings and data sources


Key Information

  • Name: Digital China Holdings Limited
  • Ticker: 861
  • Exchange: SEHK
  • Founded: 2000
  • Industry: IT Consulting and Other Services
  • Sector: Software
  • Market Cap: HK$7.129b
  • Shares outstanding: 1.67b
  • Website: https://www.dcholdings.com

Number of Employees


Location

  • Digital China Holdings Limited
  • Fortis Tower
  • 31st Floor
  • Wan Chai
  • Hong Kong

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/10/25 16:40
End of Day Share Price2021/10/25 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


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.