SEHK:598

Stock Analysis Report

Executive Summary

Sinotrans Limited provides integrated logistics services primarily in the People’s Republic of China.

Rewards

Trading at 45.2% below its fair value

Earnings are forecast to grow 3.4% per year

Earnings grew by 3.7% over the past year

Risk Analysis

Has a high level of debt

Unstable dividend track record

Highly volatile share price over past 3 months

Shareholders have been diluted in the past year



Snowflake Analysis

Undervalued established dividend payer.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 598's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

2.2%

598

1.4%

HK Logistics

2.7%

HK Market


1 Year Return

-48.8%

598

-42.8%

HK Logistics

-19.8%

HK Market

Return vs Industry: 598 underperformed the Hong Kong Logistics industry which returned -44.8% over the past year.

Return vs Market: 598 underperformed the Hong Kong Market which returned -21.1% over the past year.


Shareholder returns

598IndustryMarket
7 Day2.2%1.4%2.7%
30 Day-9.3%-13.0%-7.2%
90 Day-29.5%-25.8%-12.1%
1 Year-45.8%-48.8%-40.0%-42.8%-16.9%-19.8%
3 Year-42.5%-48.6%-36.3%-42.2%0.9%-9.3%
5 Year-59.7%-66.1%-50.1%-57.1%-12.6%-26.7%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Sinotrans undervalued compared to its fair value and its price relative to the market?

49.7%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 598 (HK$1.86) is trading below our estimate of fair value (HK$3.4)

Significantly Below Fair Value: 598 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 598 is good value based on its PE Ratio (4.5x) compared to the Logistics industry average (13x).

PE vs Market: 598 is good value based on its PE Ratio (4.5x) compared to the Hong Kong market (9.2x).


Price to Earnings Growth Ratio

PEG Ratio: 598 is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: 598 is good value based on its PB Ratio (0.5x) compared to the HK Logistics industry average (0.7x).


Next Steps

Future Growth

How is Sinotrans forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

3.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 598's forecast earnings growth (3.4% per year) is above the savings rate (1.6%).

Earnings vs Market: 598's earnings (3.4% per year) are forecast to grow slower than the Hong Kong market (11.7% per year).

High Growth Earnings: 598's earnings are forecast to grow, but not significantly.

Revenue vs Market: 598's revenue (4.6% per year) is forecast to grow slower than the Hong Kong market (9.8% per year).

High Growth Revenue: 598's revenue (4.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 598's Return on Equity is forecast to be low in 3 years time (8.8%).


Next Steps

Past Performance

How has Sinotrans performed over the past 5 years?

17.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 598 has high quality earnings.

Growing Profit Margin: 598's current net profit margins (3.6%) are higher than last year (3.5%).


Past Earnings Growth Analysis

Earnings Trend: 598's earnings have grown by 17% per year over the past 5 years.

Accelerating Growth: 598's earnings growth over the past year (3.7%) is below its 5-year average (17% per year).

Earnings vs Industry: 598 earnings growth over the past year (3.7%) exceeded the Logistics industry -6.8%.


Return on Equity

High ROE: 598's Return on Equity (9.7%) is considered low.


Next Steps

Financial Health

How is Sinotrans's financial position?


Financial Position Analysis

Short Term Liabilities: 598's short term assets (CN¥25.9B) exceed its short term liabilities (CN¥20.7B).

Long Term Liabilities: 598's short term assets (CN¥25.9B) exceed its long term liabilities (CN¥11.0B).


Debt to Equity History and Analysis

Debt Level: 598's debt to equity ratio (41.2%) is considered high.

Reducing Debt: 598's debt to equity ratio has increased from 36.5% to 41.2% over the past 5 years.

Debt Coverage: 598's debt is well covered by operating cash flow (26.6%).

Interest Coverage: 598 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet


Next Steps

Dividend

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

7.69%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: 598's dividend (7.64%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.71%).

High Dividend: 598's dividend (7.64%) is in the top 25% of dividend payers in the Hong Kong market (7.21%)


Stability and Growth of Payments

Stable Dividend: 598's dividend payments have been volatile in the past 10 years.

Growing Dividend: 598's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (34.2%), 598's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 598's dividends in 3 years are forecast to be well covered by earnings (28.6% payout ratio).


Next Steps

Management

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

2.6yrs

Average management tenure


CEO

Rong Song (47yo)

1

Tenure

CN¥2,091,774

Compensation

Mr. Song Rong has been the Chairman of China Merchants Logistics Holding Co., Ltd., since 2018 and served as its General Manager until 2018. Mr. Song serves as President at Sinotrans Limited since April 22 ...


CEO Compensation Analysis

Compensation vs Market: Rong's total compensation ($USD294.93K) is below average for companies of similar size in the Hong Kong market ($USD501.86K).

Compensation vs Earnings: Insufficient data to compare Rong's compensation with company performance.


Leadership Team

NamePositionTenureCompensationOwnership
Rong Song
President & Executive Director1yrCN¥2.09mno data
Dexing Song
Vice Chairman1.83yrsno datano data
Jiuyun Wang
Chief Financial Officer3.33yrsCN¥1.44mno data
Xiang Gao
Chief Information Officer & IT Director3.58yrsCN¥1.66mno data
Lei Tian
VP & General Counsel0.83yrno datano data
Shichu Li
Company Secretary & Board Secretary3.33yrsCN¥1.44mno data
Xueming Wu
Vice Presidentno dataCN¥1.77mno data
Xianmin Chen
Vice President1.92yrsCN¥1.72mno data
Hairong Chen
Vice President1.92yrsno datano data

2.6yrs

Average Tenure

54yo

Average Age

Experienced Management: 598's management team is considered experienced (2.6 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Rong Song
President & Executive Director1yrCN¥2.09mno data
Dexing Song
Vice Chairman1.83yrsno datano data
Ka Hsu
Non-Executive Director16.83yrsno datano data
Taiwen Wang
Independent Non-Executive Director2.33yrsCN¥166.18kno data
Jiang Jian
Non-Executive Director0.83yrno datano data
Guanpeng Li
Chairman1.17yrsCN¥2.31mno data
Yan Meng
Independent Non-Executive Director1.83yrsCN¥92.65kno data
Haiqing Song
Independent Non-Executive Director1.83yrsCN¥92.65kno data
Qian Li
Independent Non-Executive Director1.83yrsCN¥92.65kno data
Yingjie Liu
Chairman of Supervisory Board0.83yrno datano data

1.8yrs

Average Tenure

54yo

Average Age

Experienced Board: 598's board of directors are not considered experienced ( 1.8 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 been diluted in the past year, with total shares outstanding growing by 22.8%.


Top Shareholders

Company Information

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


Key Information

  • Name: Sinotrans Limited
  • Ticker: 598
  • Exchange: SEHK
  • Founded: 1950
  • Industry: Air Freight and Logistics
  • Sector: Transportation
  • Market Cap: HK$24.289b
  • Shares outstanding: 7.40b
  • Website: https://www.sinotrans.com

Number of Employees


Location

  • Sinotrans Limited
  • Building 10/Sinotrans Tower B
  • 10th Floor
  • Beijing
  • 100029
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SNOT.FOTCPK (Pink Sheets LLC)YesForeign Shares-Foreign ListedUSUSDFeb 2003
598SEHK (The Stock Exchange of Hong Kong Ltd.)YesForeign Shares-Foreign ListedHKHKDFeb 2003
SIYDB (Deutsche Boerse AG)YesForeign Shares-Foreign ListedDEEURFeb 2003
598SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDFeb 2003
598SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesForeign Shares-Foreign ListedHKHKDFeb 2003
601598SHSE (Shanghai Stock Exchange)Domestic SharesCNCNYJan 2019
601598XSSC (Shanghai Stock Exchange - Shanghai - Hong Kong Stock Connect)Domestic SharesCNCNYJan 2019

Biography

Sinotrans Limited provides integrated logistics services primarily in the People’s Republic of China. The company operates through Forwarding and Related Business, Logistics Business, and E-commerce Business segments. It offers ocean freight services, such as containerized and non-containerized load ocean freight, multimodal transportation, and customs clearance services; air freight services, including air charter and cross-border e-commerce logistics services; and shipping agency services comprising ship, cargo and passenger, supply, and other services. The company also operates terminals that offer berthing, stevedoring, stacking, delivery, and other value-added terminal services; and container yards and container freight stations that provide services, such as loaded or empty container stevedoring, transfer and storage, devanning, tally, bonded warehousing, consolidation, delivery and distribution, etc. In addition, it provides road transport solutions and door-to-door road freight services; rail transport for bulk and general cargo, and containerized goods; and international rail transport and rail transshipment of sea cargo, as well as multimodal transport solutions. Further, the company offers door-to-door express services for parcel and document to various destinations in approximately 200 countries; supply chain management and security services; and integrated information services, including order processing, operation management, financial settlement, and electronic payment. Additionally, it provides hoisting and transporting, lifting, and container and logistics equipment leasing services. Sinotrans Limited was founded in 1950 and is based 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 Analysis2020/04/08 12:43
End of Day Share Price2020/04/08 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.