SEHK:1083

Stock Analysis Report

Executive Summary

Towngas China Company Limited, an investment holding company, sells and distributes piped gas in the People’s Republic of China.


Snowflake Analysis

Established dividend payer and slightly overvalued.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 1083 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-4.0%

1083

0.1%

HK Gas Utilities

-0.6%

HK Market


1 Year Return

-26.5%

1083

-4.3%

HK Gas Utilities

-7.6%

HK Market

Return vs Industry: 1083 underperformed the Hong Kong Gas Utilities industry which returned -4.3% over the past year.

Return vs Market: 1083 underperformed the Hong Kong Market which returned -7.6% over the past year.


Shareholder returns

1083IndustryMarket
7 Day-4.0%0.1%-0.6%
30 Day-9.5%-5.0%-1.4%
90 Day-12.9%-1.8%2.0%
1 Year-24.5%-26.5%-2.3%-4.3%-4.2%-7.6%
3 Year20.8%12.5%59.5%50.3%12.9%1.5%
5 Year-30.9%-37.9%57.0%42.5%13.1%-5.6%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

10.2x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: 1083 (HK$4.78) is trading above our estimate of fair value (HK$3.64)

Significantly Below Fair Value: 1083 is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: 1083 is good value based on its PE Ratio (10.2x) compared to the Gas Utilities industry average (16.5x).

PE vs Market: 1083 is poor value based on its PE Ratio (10.2x) compared to the Hong Kong market (10.1x).


Price to Earnings Growth Ratio

PEG Ratio: 1083 is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: 1083 is good value based on its PB Ratio (0.8x) compared to the HK Gas Utilities industry average (1.1x).


Next Steps

Future Growth

How is Towngas China forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

9.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 1083's forecast earnings growth (9% per year) is above the savings rate (1.6%).

Earnings vs Market: 1083's earnings (9% per year) are forecast to grow slower than the Hong Kong market (11.8% per year).

High Growth Earnings: 1083's earnings are forecast to grow, but not significantly.

Revenue vs Market: 1083's revenue (7.9% per year) is forecast to grow slower than the Hong Kong market (9.6% per year).

High Growth Revenue: 1083's revenue (7.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 1083's Return on Equity is forecast to be low in 3 years time (8.1%).


Next Steps

Past Performance

How has Towngas China performed over the past 5 years?

6.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 1083 has high quality earnings.

Growing Profit Margin: 1083's current net profit margins (10.4%) are lower than last year (13.8%).


Past Earnings Growth Analysis

Earnings Trend: 1083's earnings have grown by 6.9% per year over the past 5 years.

Accelerating Growth: 1083's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 1083 had negative earnings growth (-7.7%) over the past year, making it difficult to compare to the Gas Utilities industry average (-4.6%).


Return on Equity

High ROE: 1083's Return on Equity (8.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Towngas China's financial position?


Financial Position Analysis

Short Term Liabilities: 1083's short term assets (HK$4.7B) do not cover its short term liabilities (HK$10.3B).

Long Term Liabilities: 1083's short term assets (HK$4.7B) do not cover its long term liabilities (HK$7.0B).


Debt to Equity History and Analysis

Debt Level: 1083's debt to equity ratio (57.1%) is considered high.

Reducing Debt: 1083's debt to equity ratio has increased from 55.6% to 57.1% over the past 5 years.

Debt Coverage: 1083's debt is not well covered by operating cash flow (14.1%).

Interest Coverage: 1083's interest payments on its debt are well covered by EBIT (6.1x coverage).


Balance Sheet

Inventory Level: 1083 has a high level of physical assets or inventory.

Debt Coverage by Assets: 1083's debt is not covered by short term assets (assets are 0.4x debt).


Next Steps

Dividend

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

3.14%

Current Dividend Yield


Dividend Yield vs Market

company3.1%marketbottom25%2.3%markettop25%6.3%industryaverage2.0%forecastin3Years3.7%

Current dividend yield vs market & industry

Notable Dividend: 1083's dividend (3.14%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.29%).

High Dividend: 1083's dividend (3.14%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.34%).


Stability and Growth of Payments

Stable Dividend: 1083's dividends per share have been stable in the past 10 years.

Growing Dividend: 1083's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (32%), 1083's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 1083's dividends in 3 years are forecast to be well covered by earnings (33.4% payout ratio).


Next Steps

Management

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

12.9yrs

Average board tenure


CEO

Peter Wong (68yo)

12.9yrs

Tenure

HK$6,331,000

Compensation

Mr. Wai Yee Wong, also known as, Peter, C.P.A. (CANADA), C.M.A., A.C.I.S., A.C.S., F.I.G.E.M., F.H.K.I.o.D., M.B.A. has been the Chief Operating Officer of Utilities Business at The Hong Kong and China Gas ...


CEO Compensation Analysis

Compensation vs Market: Peter's total compensation ($USD812.95K) is above average for companies of similar size in the Hong Kong market ($USD558.57K).

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


Board Members

NamePositionTenureCompensationOwnership
Wing Kin Chan
Chairman of the Board12.9yrsHK$200.00k0.14% HK$19.0m
Wai Yee Wong
CEO & Executive Director12.9yrsHK$6.33m0.11% HK$15.1m
Wai Kee
COO & Executive Director4.8yrsHK$4.00mno data
Hon Ming Ho
Company Secretary & Executive Director12.9yrsHK$4.22m0.038% HK$5.3m
Mo Chi Cheng
Independent Non-Executive Director12.8yrsHK$500.00kno data
Yuk-choi Kwan
Independent Non-Executive Director12.9yrsHK$500.00k0.079% HK$11.1m
Man-Bun Li
Independent Non Executive Director12.8yrsHK$500.00kno data

12.9yrs

Average Tenure

67yo

Average Age

Experienced Board: 1083's board of directors are seasoned and experienced ( 12.9 years average tenure).


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

Towngas China Company Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Towngas China Company Limited
  • Ticker: 1083
  • Exchange: SEHK
  • Founded: 1998
  • Industry: Gas Utilities
  • Sector: Utilities
  • Market Cap: HK$14.066b
  • Shares outstanding: 2.87b
  • Website: https://www.towngaschina.com

Number of Employees


Location

  • Towngas China Company Limited
  • 363 Java Road
  • 23rd Floor
  • North Point
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
1083SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDApr 2001
PGJDB (Deutsche Boerse AG)YesOrdinary SharesDEEURApr 2001
TGAS.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDApr 2001
1083SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDApr 2001
1083SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDApr 2001

Biography

Towngas China Company Limited, an investment holding company, sells and distributes piped gas in the People’s Republic of China. The company operates through two segments, Sales and Distribution of Piped Gas and Related Products, and Gas Connection. It engages in the provision of piped gas; construction of gas pipelines; operation of city gas pipeline network; operation of gas fuel automobile refilling stations; and sale of gas household appliances. In addition, the company provides financing services; and operates vehicle gas refilling stations. It serves approximately 12 million customers. The company was formerly known as Panva Gas Holdings Limited and changed its name to Towngas China Company Limited in May 2007. The company was founded in 1998 and is headquartered in North Point, Hong Kong. Towngas China Company Limited is a subsidiary of The Hong Kong and China Gas Company Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/24 12:46
End of Day Share Price2020/02/24 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.