SEHK:3396

Stock Analysis Report

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Executive Summary

Legend Holdings Corporation operates in information technology (IT), financial services, innovative consumption and services, agriculture and food, advanced manufacturing and professional services, and financial investments businesses in the People’s Republic of China and internationally.


Snowflake Analysis

Very undervalued second-rate dividend payer.

Share Price & News

How has Legend Holdings's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 3396's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

4.1%

3396

-3.3%

HK Tech

0.6%

HK Market


1 Year Return

-50.4%

3396

0.5%

HK Tech

-9.9%

HK Market

Return vs Industry: 3396 underperformed the Hong Kong Tech industry which returned -0.6% over the past year.

Return vs Market: 3396 underperformed the Hong Kong Market which returned -10.4% over the past year.


Shareholder returns

3396IndustryMarket
7 Day4.1%-3.3%0.6%
30 Day3.5%14.0%-3.6%
90 Day-30.0%-9.3%-6.8%
1 Year-49.5%-50.4%1.6%0.5%-7.0%-9.9%
3 Year-56.2%-58.1%-47.1%-50.6%-4.7%-14.3%
5 Yearn/a-64.6%-70.4%-15.4%-28.5%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Legend Holdings 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: 3396 (HK$9.38) is trading below our estimate of fair value (HK$39.46)

Significantly Below Fair Value: 3396 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 3396 is good value based on its PE Ratio (5.6x) compared to the Tech industry average (9.6x).

PE vs Market: 3396 is good value based on its PE Ratio (5.6x) compared to the Hong Kong market (9.3x).


Price to Earnings Growth Ratio

PEG Ratio: 3396 is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: 3396 is good value based on its PB Ratio (0.3x) compared to the HK Tech industry average (1x).


Next Steps

Future Growth

How is Legend Holdings forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

11.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 3396's forecast earnings growth (11.1% per year) is above the savings rate (1.6%).

Earnings vs Market: 3396's earnings (11.1% per year) are forecast to grow slower than the Hong Kong market (16.5% per year).

High Growth Earnings: 3396's earnings are forecast to grow, but not significantly.

Revenue vs Market: 3396's revenue (2% per year) is forecast to grow slower than the Hong Kong market (10.5% per year).

High Growth Revenue: 3396's revenue (2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 3396's Return on Equity is forecast to be low in 3 years time (7.7%).


Next Steps

Past Performance

How has Legend Holdings performed over the past 5 years?

-3.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 3396 has high quality earnings.

Growing Profit Margin: 3396's current net profit margins (0.9%) are lower than last year (1.2%).


Past Earnings Growth Analysis

Earnings Trend: 3396's earnings have declined by -3.7% per year over the past 5 years.

Accelerating Growth: 3396's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 3396 had negative earnings growth (-17.3%) over the past year, making it difficult to compare to the Tech industry average (-14.1%).


Return on Equity

High ROE: 3396's Return on Equity (9.4%) is considered low.


Next Steps

Financial Health

How is Legend Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 3396's short term assets (CN¥293.4B) do not cover its short term liabilities (CN¥393.6B).

Long Term Liabilities: 3396's short term assets (CN¥293.4B) exceed its long term liabilities (CN¥138.6B).


Debt to Equity History and Analysis

Debt Level: 3396's debt to equity ratio (341%) is considered high.

Reducing Debt: 3396's debt to equity ratio has increased from 147.7% to 341% over the past 5 years.

Debt Coverage: 3396's debt is not well covered by operating cash flow (2.9%).

Interest Coverage: 3396's interest payments on its debt are well covered by EBIT (4.2x coverage).


Balance Sheet


Next Steps

Dividend

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

3.82%

Current Dividend Yield


Upcoming Dividend Payment


Dividend Yield vs Market

Notable Dividend: 3396's dividend (3.82%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.65%).

High Dividend: 3396's dividend (3.82%) is low compared to the top 25% of dividend payers in the Hong Kong market (7.31%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, 3396 has been paying a dividend for less than 10 years.

Growing Dividend: 3396's dividend payments have increased, but the company has only paid a dividend for 4 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (21.4%), 3396's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 3396's dividends in 3 years are forecast to be well covered by earnings (18% payout ratio).


Next Steps

Management

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

2.8yrs

Average management tenure


CEO

Peng Li (46yo)

0.33

Tenure

Mr. Peng Li has been the Chief Executive Officer of Legend Holdings Corporation since 2020 and its Executive Director since February 13, 2020. He served as the President of Holdings Corporation since Janua ...


Leadership Team

NamePositionTenureCompensationOwnership
Min Ning
Executive Chairman0.33yrCN¥21.33m1.53% CN¥337.7m
Chuanzhi Liu
Honorary Chairman of the Board & Senior Advisor0.42yrCN¥76.04m2.89% CN¥637.8m
Peng Li
CEO & Executive Director0.33yrno data0.066% CN¥14.5m
Xudong Tang
Senior Vice President8.33yrsno datano data
Shaopeng Chen
Senior Vice President9.33yrsno datano data
Yee Har Yeung
Joint Company Secretary5.17yrsno datano data
Wei Wang
GM of Securities Affairs Department0.33yrno datano data

2.8yrs

Average Tenure

50yo

Average Age

Experienced Management: 3396's management team is considered experienced (2.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Min Ning
Executive Chairman0.33yrCN¥21.33m1.53% CN¥337.7m
Chuanzhi Liu
Honorary Chairman of the Board & Senior Advisor0.42yrCN¥76.04m2.89% CN¥637.8m
Peng Li
CEO & Executive Director0.33yrno data0.066% CN¥14.5m
Linan Zhu
Non-Executive Director6.17yrsCN¥48.00m2.04% CN¥450.2m
Wei Hua Ma
Independent Non Executive Director4.92yrsCN¥400.00kno data
Linghuan Zhao
Non-Executive Director17.33yrsCN¥11.66mno data
Lebin Wu
Non Executive Director5.67yrsno datano data
Jian'an Yin
Independent Non-Executive Director0.25yrno datano data
Quan Hao
Independent Non Executive Director4.92yrsCN¥400.00kno data
Qiang Gao
Chairman of the Board of Supervisors0.33yrno datano data

2.7yrs

Average Tenure

56.5yo

Average Age

Experienced Board: 3396's board of directors are not considered experienced ( 2.7 years average tenure), which suggests a new board.


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

Legend Holdings Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Legend Holdings Corporation
  • Ticker: 3396
  • Exchange: SEHK
  • Founded: 1984
  • Industry: Technology Hardware, Storage and Peripherals
  • Sector: Tech
  • Market Cap: HK$22.101b
  • Shares outstanding: 2.36b
  • Website: https://www.legendholdings.com.cn

Number of Employees


Location

  • Legend Holdings Corporation
  • Court No. 2, Ke Xue Yuan Nanlu
  • 17th Floor
  • Beijing
  • 100190
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
3396SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares Foreign ListedHKHKDJun 2015
1PCDB (Deutsche Boerse AG)YesForeign Shares Foreign ListedDEEURJun 2015
3396SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesForeign Shares Foreign ListedHKHKDJun 2015
3396SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesForeign Shares Foreign ListedHKHKDJun 2015

Biography

Legend Holdings Corporation operates in information technology (IT), financial services, innovative consumption and services, agriculture and food, advanced manufacturing and professional services, and financial investments businesses in the People’s Republic of China and internationally. The company’s IT segment develops, manufactures, and markets technology products and services to customers and enterprises. Its Financial Services segment offers banking, short-term financing, credit guarantees, entrusted loans, financial leasing, insurance brokerage, third party payment, internet finance, trust, and customized financial solutions. The company’s Innovative Consumption and Services segment provides medical and health, car rental, and Internet healthcare services, as well as education services for kids. Its Agriculture and Food segment plants and sells fruit and tea products; produces and sells salmon and Chinese liquor; supplies seafood and accessory products; and operates liquor direct sales chain business. The company’s Advanced Manufacturing and Professional Services segment provides fine chemicals; and energy materials production, logistics, and aviation logistic related business services. Its Financial Investments segment invests in private equity and venture capital funds as a limited partner; holds interest in the general partners of various funds; makes angel investments in technology start-ups, as well as minority investments in other entities; and provides office rental services to consumers and enterprises. The company also develops car management software; provides car services information consultant and medical consultation services; and engages in real estate investment and asset management businesses. Legend Holdings Corporation was founded in 1984 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 Analysis2020/05/29 13:38
End of Day Share Price2020/05/29 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.