SEHK:144

Stock Analysis Report

China Merchants Port Holdings

Executive Summary

China Merchants Port Holdings Company Limited, an investment holding company, operates as a port operator in Mainland China, Hong Kong, Taiwan, and internationally.

Rewards

Trading at 24.9% below its fair value

Risk Analysis

Earnings are forecast to decline by an average of -21.8% per year for the next 3 years

Interest payments are not well covered by earnings

Unstable dividend track record

Large one-off items impacting financial results



Snowflake Analysis

Undervalued established dividend payer.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 144 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-4.7%

144

-3.7%

HK Infrastructure

-3.4%

HK Market


1 Year Return

-13.4%

144

-4.9%

HK Infrastructure

-0.4%

HK Market

Return vs Industry: 144 underperformed the Hong Kong Infrastructure industry which returned -0.1% over the past year.

Return vs Market: 144 underperformed the Hong Kong Market which returned 6.4% over the past year.


Shareholder returns

144IndustryMarket
7 Day-4.7%-3.7%-3.4%
30 Day2.0%-2.7%-1.2%
90 Day8.0%1.8%3.7%
1 Year-7.0%-13.4%0.6%-4.9%3.3%-0.4%
3 Year-21.6%-36.3%6.2%-7.7%20.4%8.2%
5 Year-39.1%-53.4%3.9%-17.5%19.6%-0.4%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

27.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 144 (HK$13.82) is trading below our estimate of fair value (HK$18.41)

Significantly Below Fair Value: 144 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 144 is good value based on its PE Ratio (5.5x) compared to the Infrastructure industry average (8.5x).

PE vs Market: 144 is good value based on its PE Ratio (5.5x) compared to the Hong Kong market (10.5x).


Price to Earnings Growth Ratio

PEG Ratio: 144's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: 144 is good value based on its PB Ratio (0.6x) compared to the HK Infrastructure industry average (0.7x).


Next Steps

Future Growth

How is China Merchants Port Holdings forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

-20.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 144's earnings are forecast to decline over the next 3 years (-21.8% per year).

Earnings vs Market: 144's earnings are forecast to decline over the next 3 years (-21.8% per year).

High Growth Earnings: 144's earnings are forecast to decline over the next 3 years.

Revenue vs Market: 144's revenue (5.5% per year) is forecast to grow slower than the Hong Kong market (10.2% per year).

High Growth Revenue: 144's revenue (5.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 144's Return on Equity is forecast to be low in 3 years time (6.3%).


Next Steps

Past Performance

How has China Merchants Port Holdings performed over the past 5 years?

14.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 144 has a large one-off gain of HK$6.0B impacting its June 30 2019 financial results.

Growing Profit Margin: 144's current net profit margins (91.9%) are higher than last year (81.7%).


Past Earnings Growth Analysis

Earnings Trend: 144's earnings have grown by 14.2% per year over the past 5 years.

Accelerating Growth: 144's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 144 had negative earnings growth (-0.02%) over the past year, making it difficult to compare to the Infrastructure industry average (1.1%).


Return on Equity

High ROE: 144's Return on Equity (9.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is China Merchants Port Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 144's short term assets (HK$18.5B) exceed its short term liabilities (HK$13.2B).

Long Term Liabilities: 144's short term assets (HK$18.5B) do not cover its long term liabilities (HK$43.9B).


Debt to Equity History and Analysis

Debt Level: 144's debt to equity ratio (41.7%) is considered high.

Reducing Debt: 144's debt to equity ratio has increased from 33.9% to 41.7% over the past 5 years.

Debt Coverage: 144's debt is not well covered by operating cash flow (17.3%).

Interest Coverage: 144's interest payments on its debt are not well covered by EBIT (1.4x coverage).


Balance Sheet

Inventory Level: 144 has a high level of physical assets or inventory.

Debt Coverage by Assets: 144's debt is not covered by short term assets (assets are 0.5x debt).


Next Steps

Dividend

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

7.15%

Current Dividend Yield


Dividend Yield vs Market

company7.2%marketbottom25%2.2%markettop25%6.2%industryaverage5.3%forecastin3Years4.8%

Current dividend yield vs market & industry

Notable Dividend: 144's dividend (6.87%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.17%).

High Dividend: 144's dividend (6.87%) is in the top 25% of dividend payers in the Hong Kong market (6.02%)


Stability and Growth of Payments

Stable Dividend: 144's dividend payments have been volatile in the past 10 years.

Growing Dividend: 144's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (37.9%), 144's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 144's dividends in 3 years are forecast to be well covered by earnings (44.8% payout ratio).


Next Steps

Management

What is the CEO of China Merchants Port Holdings's salary, the management and board of directors tenure and is there insider trading?

1.6yrs

Average management tenure


CEO

Jingtao Bai (54yo)

4.6yrs

Tenure

HK$2,840,000

Compensation

Mr. Jingtao Bai serves as Chief Executive Officer at China Merchants Port Group Co., Ltd. since December 2018 & served as Chairman of the Board at China Merchants Port Group Co., Ltd. until December 06, 20 ...


CEO Compensation Analysis

Compensation vs Market: Jingtao's total compensation ($USD365.26K) is below average for companies of similar size in the Hong Kong market ($USD547.05K).

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


Management Age and Tenure

1.6yrs

Average Tenure

54yo

Average Age

Experienced Management: 144's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.


Board Age and Tenure

4.3yrs

Average Tenure

55yo

Average Age

Experienced Board: 144's board of directors are considered experienced (4.3 years average tenure).


Insider Trading

Insider Buying: 144 insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyHK$48,59928 Oct 19
Yip Wah Lee
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares3,964
Max PriceHK$12.26
BuyHK$152,84328 Jun 19
Yip Wah Lee
EntityIndividual
Role
Member of the Board of Directors
Independent Non-Executive Director
Shares11,572
Max PriceHK$13.21

Ownership Breakdown

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


Management Team

  • Gangfeng Fu (53yo)

    Executive Chairman

    • Tenure: 1.8yrs
  • Shaoping Zheng (56yo)

    Deputy GM & Executive Director

    • Tenure: 7.9yrs
    • Compensation: HK$2.35m
  • Zhixian Wang (54yo)

    Executive Director

    • Tenure: 3.9yrs
    • Compensation: HK$2.31m
  • Jingtao Bai (54yo)

    MD & Executive Director

    • Tenure: 4.6yrs
    • Compensation: HK$2.84m
  • Xianliang Xiong (52yo)

    Executive Director

    • Tenure: 1.6yrs
  • Yvonne Luk

    Deputy Chief Legal Counsel and GM of Board of Directors & Legal Department

    • Jian Su (47yo)

      Executive Director

      • Tenure: 2.3yrs
    • Carol Cheng

      General Manager of Corporate Communications Department

      • Ling Wen (54yo)

        Chief Financial Officer

        • Tenure: 1.2yrs
      • Lefu Ge (56yo)

        Executive Director

        • Tenure: 0.6yrs

      Board Members

      • Peter Lee (77yo)

        Independent Non-Executive Director

        • Tenure: 18.6yrs
        • Compensation: HK$280.00k
      • Gangfeng Fu (53yo)

        Executive Chairman

        • Tenure: 1.8yrs
      • Shaoping Zheng (56yo)

        Deputy GM & Executive Director

        • Tenure: 7.9yrs
        • Compensation: HK$2.35m
      • Ying Hay Kut (64yo)

        Independent Non-Executive Director

        • Tenure: 27.6yrs
        • Compensation: HK$280.00k
      • Zhixian Wang (54yo)

        Executive Director

        • Tenure: 3.9yrs
        • Compensation: HK$2.31m
      • David Li (64yo)

        Independent Non-Executive Director

        • Tenure: 12.6yrs
        • Compensation: HK$280.00k
      • Jingtao Bai (54yo)

        MD & Executive Director

        • Tenure: 4.6yrs
        • Compensation: HK$2.84m
      • Xianliang Xiong (52yo)

        Executive Director

        • Tenure: 1.6yrs
      • Jian Su (47yo)

        Executive Director

        • Tenure: 2.3yrs
      • Lefu Ge (56yo)

        Executive Director

        • Tenure: 0.6yrs

      Company Information

      China Merchants Port Holdings Company Limited's company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: China Merchants Port Holdings Company Limited
      • Ticker: 144
      • Exchange: SEHK
      • Founded: 1872
      • Industry: Marine Ports and Services
      • Sector: Transportation
      • Market Cap: HK$45.802b
      • Shares outstanding: 3.45b
      • Website: https://www.cmport.com.hk

      Number of Employees


      Location

      • China Merchants Port Holdings Company Limited
      • China Merchants Tower
      • 38th Floor
      • Central
      • Hong Kong

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      CMHH.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMar 1995
      CPMDB (Deutsche Boerse AG)YesOrdinary SharesDEEURMar 1995
      144SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDMar 1995
      144SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDMar 1995
      144SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDMar 1995
      CMHH.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDOct 2008

      Biography

      China Merchants Port Holdings Company Limited, an investment holding company, operates as a port operator in Mainland China, Hong Kong, Taiwan, and internationally. It operates through Ports operation, Bonded Logistics Operation, Port-Related Manufacturing, and Other. The company engages in the container, and bulk and general cargo terminals; and logistic park operation, ports transportation, and airport cargo handling activities. It also invests in and develops properties; constructs modular housings; trades in securities; and provides container terminal services, as well as computer network services. In addition, the company engages in port construction and development; operation of berths; operation of tugboats; and holding of various pieces of land. The company was formerly known as China Merchants Holdings (International) Company Limited and changed its name to China Merchants Port Holdings Company Limited in June 2016. The company was founded in 1872 and is headquartered in Central, Hong Kong. China Merchants Port Holdings Company Limited is considered as a Red Chip company due to its listing on the Hong Kong Stock Exchange. China Merchants Port Holdings Company Limited is a subsidiary of China Merchants Group Limited. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/27 12:44
      End of Day Share Price2020/01/24 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.