SEHK:135

Stock Analysis Report

Executive Summary

Kunlun Energy Company Limited, an investment holding company, engages in the exploration, development, production, and sale of crude oil and natural gas.

Rewards

Trading at 72.7% below its fair value

Earnings are forecast to grow 10.01% per year

Risk Analysis

Has a high level of debt

Unstable dividend track record



Snowflake Analysis

Good value average dividend payer.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 135 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-3.6%

135

-0.2%

HK Gas Utilities

-4.1%

HK Market


1 Year Return

-20.1%

135

7.3%

HK Gas Utilities

-0.5%

HK Market

Return vs Industry: 135 underperformed the Hong Kong Gas Utilities industry which returned 6.7% over the past year.

Return vs Market: 135 underperformed the Hong Kong Market which returned 6.4% over the past year.


Shareholder returns

135IndustryMarket
7 Day-3.6%-0.2%-4.1%
30 Day-1.6%5.5%0.05%
90 Day-9.8%-0.3%4.3%
1 Year-17.0%-20.1%9.5%7.3%3.2%-0.5%
3 Year17.8%8.2%72.7%62.7%20.4%8.2%
5 Year-6.0%-16.6%61.8%46.9%19.0%-0.9%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

42.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 135 (HK$7.02) is trading below our estimate of fair value (HK$25.74)

Significantly Below Fair Value: 135 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 135 is good value based on its PE Ratio (10.7x) compared to the Gas Utilities industry average (17.7x).

PE vs Market: 135 is poor value based on its PE Ratio (10.4x) compared to the Hong Kong market (10.3x).


Price to Earnings Growth Ratio

PEG Ratio: 135 is poor value based on its PEG Ratio (1.1x)


Price to Book Ratio

PB vs Industry: 135 is good value based on its PB Ratio (1.1x) compared to the HK Gas Utilities industry average (1.2x).


Next Steps

Future Growth

How is Kunlun Energy forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?

10.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 135's forecast earnings growth (10% per year) is above the savings rate (1.6%).

Earnings vs Market: 135's earnings (10% per year) are forecast to grow slower than the Hong Kong market (11.3% per year).

High Growth Earnings: 135's earnings are forecast to grow, but not significantly.

Revenue vs Market: 135's revenue (10.7% per year) is forecast to grow faster than the Hong Kong market (10.2% per year).

High Growth Revenue: 135's revenue (10.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 135's Return on Equity is forecast to be low in 3 years time (13.6%).


Next Steps

Past Performance

How has Kunlun Energy performed over the past 5 years?

5.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 135 has high quality earnings.

Growing Profit Margin: 135's current net profit margins (4.3%) are lower than last year (5.4%).


Past Earnings Growth Analysis

Earnings Trend: 135's earnings have grown by 5.7% per year over the past 5 years.

Accelerating Growth: 135's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 135 had negative earnings growth (-11.7%) over the past year, making it difficult to compare to the Gas Utilities industry average (-4.6%).


Return on Equity

High ROE: 135's Return on Equity (11.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Kunlun Energy's financial position?


Financial Position Analysis

Short Term Liabilities: 135's short term assets (CN¥28.8B) do not cover its short term liabilities (CN¥38.5B).

Long Term Liabilities: 135's short term assets (CN¥28.8B) exceed its long term liabilities (CN¥27.7B).


Debt to Equity History and Analysis

Debt Level: 135's debt to equity ratio (49%) is considered high.

Reducing Debt: 135's debt to equity ratio has increased from 42.5% to 49% over the past 5 years.

Debt Coverage: 135's debt is well covered by operating cash flow (47.4%).

Interest Coverage: 135's interest payments on its debt are well covered by EBIT (17.2x coverage).


Balance Sheet

Inventory Level: 135 has a high level of physical assets or inventory.

Debt Coverage by Assets: 135's debt is not covered by short term assets (assets are 0.8x debt).


Next Steps

Dividend

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

3.83%

Current Dividend Yield


Dividend Yield vs Market

company3.8%marketbottom25%2.2%markettop25%6.2%industryaverage1.9%forecastin3Years5.0%

Current dividend yield vs market & industry

Notable Dividend: 135's dividend (3.7%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.17%).

High Dividend: 135's dividend (3.7%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.02%).


Stability and Growth of Payments

Stable Dividend: 135's dividend payments have been volatile in the past 10 years.

Growing Dividend: 135's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (39.6%), 135's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 135's dividends in 3 years are forecast to be well covered by earnings (32% payout ratio).


Next Steps

Management

What is the CEO of Kunlun Energy's salary, the management and board of directors tenure and is there insider trading?

7.2yrs

Average management tenure


CEO

Zhao Yongqi (58yo)

6.1yrs

Tenure

CN¥795,000

Compensation

Mr. Zhao Yongqi has been the Chief Executive Officer of Kunlun Energy Company Limited since December 5, 2013 and had been its General Manager since February 2016. Mr. Yongqi has been the President of Kunlu ...


CEO Compensation Analysis

Compensation vs Market: Zhao's total compensation ($USD115.39K) is below average for companies of similar size in the Hong Kong market ($USD547.05K).

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


Management Age and Tenure

7.2yrs

Average Tenure

55yo

Average Age

Experienced Management: 135's management team is seasoned and experienced (7.2 years average tenure).


Board Age and Tenure

3.7yrs

Average Tenure

56yo

Average Age

Experienced Board: 135's board of directors are considered experienced (3.7 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

  • Cheng Cheng (51yo)

    VP & Company Secretary

    • Tenure: 3.5yrs
    • Compensation: CN¥1.03m
  • Yuxiao Fa (55yo)

    Senior Vice President

    • Tenure: 8.3yrs
  • Wenxu Zhong (55yo)

    Senior Vice President

    • Tenure: 8.3yrs
  • Xia Yu (56yo)

    Assistant Chief Executive Officer

    • Tenure: 8.3yrs
  • Zhao Yongqi (58yo)

    President

    • Tenure: 6.1yrs
    • Compensation: CN¥795.00k
  • Zhongxun Zhao (53yo)

    Executive Director

    • Tenure: 3.7yrs
  • Xiao Ling (55yo)

    Executive Chairman

    • Tenure: 2yrs
  • Yong Miao (46yo)

    CFO & Executive Director

    • Tenure: 2yrs
  • Yuanhong Zhou (51yo)

    Executive Director

    • Tenure: 2yrs

Board Members

  • Aubrey Li (69yo)

    Independent Non-Executive Director

    • Tenure: 22yrs
    • Compensation: CN¥257.00k
  • Patrick Sun (61yo)

    Independent Non-Executive Director

    • Tenure: 3.9yrs
    • Compensation: CN¥215.00k
  • Xiaofeng Liu (56yo)

    Independent Non-Executive Director

    • Tenure: 15.8yrs
    • Compensation: CN¥215.00k
  • Zhao Yongqi (58yo)

    President

    • Tenure: 6.1yrs
    • Compensation: CN¥795.00k
  • Zhongxun Zhao (53yo)

    Executive Director

    • Tenure: 3.7yrs
  • Xiao Ling (55yo)

    Executive Chairman

    • Tenure: 2yrs
  • Yong Miao (46yo)

    CFO & Executive Director

    • Tenure: 2yrs
  • Yuanhong Zhou (51yo)

    Executive Director

    • Tenure: 2yrs
  • Jasper Tsang (72yo)

    Independent Non-Executive Director

    • Tenure: 0.4yrs

Company Information

Kunlun Energy Company Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Kunlun Energy Company Limited
  • Ticker: 135
  • Exchange: SEHK
  • Founded:
  • Industry: Gas Utilities
  • Sector: Utilities
  • Market Cap: HK$58.274b
  • Shares outstanding: 8.66b
  • Website: https://www.kunlun.com.hk

Number of Employees


Location

  • Kunlun Energy Company Limited
  • 118 Connaught Road West
  • 39th Floor
  • Hong Kong
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
KUNU.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1992
CTJ1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
135SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDJan 1992
135SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJan 1992
135SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDJan 1992
KLYC.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDJan 2009

Biography

Kunlun Energy Company Limited, an investment holding company, engages in the exploration, development, production, and sale of crude oil and natural gas. It operates through four segments: Exploration and Production, Natural Gas Sales, Liquefied Natural Gas (LNG) Processing and Terminal, and Natural Gas Pipeline. The company is also involved in the processing, unloading, storing, gasification, and transportation of LNG; transmission of natural gas through pipeline; and wholesale and retail of various natural gas and LPG products. It operates in the People’s Republic of China, Kazakhstan, the Sultanate of Oman, Peru, Thailand, and Azerbaijan. The company was formerly known as CNPC (Hong Kong) Limited and changed its name to Kunlun Energy Company Limited in March 2010. The company is headquartered in Hong Kong, Hong Kong, and is considered as a Red Chip company due to its listing on the Hong Kong Stock Exchange. Kunlun Energy Company Limited is a subsidiary of Sun World Limited. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/01/25 12:38
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.