SEHK:6088

Stock Analysis Report

Executive Summary

FIT Hon Teng Limited engages in the design, development, production, and sale of interconnect solutions and related products in Taiwan, Mainland China, the United States, Hong Kong, Singapore, and internationally.

Rewards

Trading at 38.6% below its fair value

Earnings are forecast to grow 11.61% per year

Earnings grew by 3.4% over the past year

Risk Analysis

Has a high level of debt

Unstable dividend track record

Highly volatile share price over past 3 months



Snowflake Analysis

Good value with adequate balance sheet.


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Intel

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Share Price & News

How has FIT Hon Teng's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: 6088's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

1.8%

6088

1.1%

HK Electronic

-1.4%

HK Market


1 Year Return

-21.3%

6088

18.3%

HK Electronic

3.5%

HK Market

Return vs Industry: 6088 underperformed the Hong Kong Electronic industry which returned 19.1% over the past year.

Return vs Market: 6088 underperformed the Hong Kong Market which returned 5.6% over the past year.


Shareholder returns

6088IndustryMarket
7 Day1.8%1.1%-1.4%
30 Day6.1%3.2%1.8%
90 Day-17.8%15.3%6.0%
1 Year-19.6%-21.3%21.9%18.3%7.3%3.5%
3 Yearn/a16.0%6.6%23.3%10.8%
5 Yearn/a100.2%74.1%19.2%-0.7%

Price Volatility Vs. Market

How volatile is FIT Hon Teng's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is FIT Hon Teng undervalued compared to its fair value and its price relative to the market?

37.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 6088 (HK$2.72) is trading below our estimate of fair value (HK$4.43)

Significantly Below Fair Value: 6088 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 6088 is poor value based on its PE Ratio (10.1x) compared to the Electronic industry average (9.5x).

PE vs Market: 6088 is good value based on its PE Ratio (10.1x) compared to the Hong Kong market (10.5x).


Price to Earnings Growth Ratio

PEG Ratio: 6088 is good value based on its PEG Ratio (0.9x)


Price to Book Ratio

PB vs Industry: 6088 is overvalued based on its PB Ratio (1.2x) compared to the HK Electronic industry average (1x).


Next Steps

Future Growth

How is FIT Hon Teng forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

12.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 6088's forecast earnings growth (11.6% per year) is above the savings rate (1.6%).

Earnings vs Market: 6088's earnings (11.6% per year) are forecast to grow faster than the Hong Kong market (11.6% per year).

High Growth Earnings: 6088's earnings are forecast to grow, but not significantly.

Revenue vs Market: 6088's revenue (7.8% per year) is forecast to grow slower than the Hong Kong market (10.1% per year).

High Growth Revenue: 6088's revenue (7.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 6088's Return on Equity is forecast to be low in 3 years time (12.5%).


Next Steps

Past Performance

How has FIT Hon Teng performed over the past 5 years?

6.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 6088 has high quality earnings.

Growing Profit Margin: 6088's current net profit margins (5.4%) are lower than last year (5.9%).


Past Earnings Growth Analysis

Earnings Trend: 6088's earnings have grown by 6.6% per year over the past 5 years.

Accelerating Growth: 6088's earnings growth over the past year (3.4%) is below its 5-year average (6.6% per year).

Earnings vs Industry: 6088 earnings growth over the past year (3.4%) exceeded the Electronic industry -10.3%.


Return on Equity

High ROE: 6088's Return on Equity (11.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is FIT Hon Teng's financial position?


Financial Position Analysis

Short Term Liabilities: 6088's short term assets ($2.6B) exceed its short term liabilities ($1.6B).

Long Term Liabilities: 6088's short term assets ($2.6B) exceed its long term liabilities ($686.4M).


Debt to Equity History and Analysis

Debt Level: 6088's debt to equity ratio (45.2%) is considered high.

Reducing Debt: Insufficient data to determine if 6088's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: 6088's debt is well covered by operating cash flow (63%).

Interest Coverage: 6088's interest payments on its debt are well covered by EBIT (48.9x coverage).


Balance Sheet

Inventory Level: 6088 has a high level of physical assets or inventory.

Debt Coverage by Assets: 6088's debt is covered by short term assets (assets are 3x debt).


Next Steps

Dividend

What is FIT Hon Teng's current dividend yield, its reliability and sustainability?

2.50%

Current Dividend Yield


Dividend Yield vs Market

company2.5%marketbottom25%2.2%markettop25%6.1%industryaverage2.4%forecastin3Years2.8%

Current dividend yield vs market & industry

Notable Dividend: 6088's dividend (2.55%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.17%).

High Dividend: 6088's dividend (2.55%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.06%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, 6088 has been paying a dividend for less than 10 years.

Growing Dividend: 6088's dividend payments have increased, but the company has only paid a dividend for 2 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (25.9%), 6088's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 6088's dividends in 3 years are forecast to be well covered by earnings (20.4% payout ratio).


Next Steps

Management

What is the CEO of FIT Hon Teng's salary, the management and board of directors tenure and is there insider trading?

4.4yrs

Average management tenure


CEO

Sidney Lu Lu (61yo)

0yrs

Tenure

US$13,098,000

Compensation

Mr. Sung-Ching Lu, also known as Sidney Lu, serves as the Chairman and Chief Executive Officer of Foxconn Interconnect Technology Limited and has been its Executive Director since December 30, 2013. He has ...


CEO Compensation Analysis

Compensation vs Market: Sidney Lu's total compensation ($USD13.10M) is above average for companies of similar size in the Hong Kong market ($USD528.47K).

Compensation vs Earnings: Sidney Lu's compensation has been consistent with company performance over the past year.


Management Age and Tenure

4.4yrs

Average Tenure

59yo

Average Age

Experienced Management: 6088's management team is considered experienced (4.4 years average tenure).


Board Age and Tenure

3.2yrs

Average Tenure

61yo

Average Age

Experienced Board: 6088's board of directors are considered experienced (3.2 years average tenure).


Insider Trading

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.


Management Team

  • Chet Pipkin (58yo)

    Executive Director

    • Tenure: 0.8yrs
  • Sidney Lu Lu (61yo)

    Chairman & CEO

    • Compensation: US$13.10m
  • Sau Mei Ng (42yo)

    Joint Company Secretary

    • Tenure: 3.6yrs
  • Christopher Lu (60yo)

    Executive Director

    • Tenure: 4.8yrs
    • Compensation: US$3.70m
  • William Gillespie (71yo)

    Chief Operating Officer

    • Tenure: 6.3yrs
    • Compensation: US$1.31m
  • Chin-Tsun Lin (59yo)

    Director of Financial & Accounting

    • Tenure: 5.2yrs
  • Kenneth Tak-Kin Wong (59yo)

    Joint Company Secretary

    • Tenure: 0.4yrs

Board Members

  • Chet Pipkin (58yo)

    Executive Director

    • Tenure: 0.8yrs
  • Hubert Chan (61yo)

    Independent Non-Executive Director

    • Tenure: 3.2yrs
    • Compensation: US$75.00k
  • Pete Curwen (61yo)

    Independent Non-Executive Director

    • Tenure: 3.2yrs
    • Compensation: US$75.00k
  • Sidney Lu Lu (61yo)

    Chairman & CEO

    • Compensation: US$13.10m
  • Sheldon Trainor-Degirolamo (55yo)

    Independent Non-Executive Director

    • Tenure: 0.7yrs
  • Kwai Chang Tang (66yo)

    Independent Non-Executive Director

    • Tenure: 3.2yrs
    • Compensation: US$75.00k
  • Christopher Lu (60yo)

    Executive Director

    • Tenure: 4.8yrs
    • Compensation: US$3.70m

Company Information

FIT Hon Teng Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: FIT Hon Teng Limited
  • Ticker: 6088
  • Exchange: SEHK
  • Founded: 2013
  • Industry: Electronic Components
  • Sector: Tech
  • Market Cap: HK$18.352b
  • Shares outstanding: 6.72b
  • Website: https://www.fit-foxconn.com

Number of Employees


Location

  • FIT Hon Teng Limited
  • 66-1, Chungshan Road
  • Tucheng District
  • New Taipei City
  • 23680
  • Taiwan

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
6088SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary ShareHKHKDJul 2017
0FJDB (Deutsche Boerse AG)YesOrdinary ShareDEEURJul 2017
6088SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary ShareHKHKDJul 2017

Biography

FIT Hon Teng Limited engages in the design, development, production, and sale of interconnect solutions and related products in Taiwan, Mainland China, the United States, Hong Kong, Singapore, and internationally. The company offers cable components, including an array of input/output (I/O) cable assemblies, as well as wire harness and power cords. It also provides connector components comprising I/O connectors, sockets, SAS connectors, power and backplane connectors, memory/edge cards, terminal blocks, and wire to board/board to board connectors. In addition, the company offers optical modules, such as active optical cables, optical transceiver, and embedded optical modules. Further, it provides radio frequency antenna cable and module assemblies; wireless charging products and components; and accessories, such as headsets, speaker systems, and power and cable accessories. The company’s interconnect solutions provide functionality to computer and consumer electronics, mobile and wireless devices, and communications infrastructure, including cloud computing, as well as other end markets, such as automotive, industrial, and medical. It also engages in the structure cabling, installation, and maintenance of intelligent control system, as well as research, development, and manufacturing of batteries. The company was formerly known as New Wing International Holdings Limited and changed its name to FIT Hon Teng Limited in June 2013. The company was founded in 2013 and is headquartered in New Taipei City, Taiwan. Foxconn FIT Hon Teng Limited is a subsidiary of Foxconn (Far East) Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/01/22 13:11
End of Day Share Price2020/01/22 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.