SEHK:2688

Stock Analysis Report

ENN Energy Holdings

Executive Summary

ENN Energy Holdings Limited, an investment holding company, engages in the investment, construction, operation, and management of gas pipeline infrastructures, vehicle and ship refuelling stations, and integrated energy stations in the People’s Republic of China.

Rewards

Trading at 46.6% below its fair value

Earnings are forecast to grow 13.25% per year

Earnings grew by 49.8% over the past year

Pays a reliable dividend of 1.25%

Risk Analysis

Has a high level of debt

Shareholders have been diluted in the past year



Snowflake Analysis

Solid track record with adequate balance sheet and pays a dividend.

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 2688 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

3.2%

2688

0.8%

HK Gas Utilities

0.6%

HK Market


1 Year Return

11.6%

2688

-1.2%

HK Gas Utilities

-4.5%

HK Market

Return vs Industry: 2688 exceeded the Hong Kong Gas Utilities industry which returned -1.2% over the past year.

Return vs Market: 2688 exceeded the Hong Kong Market which returned -4.5% over the past year.


Shareholder returns

2688IndustryMarket
7 Day3.2%0.8%0.6%
30 Day-3.0%-5.8%-5.2%
90 Day7.7%-3.4%2.3%
1 Year13.5%11.6%0.8%-1.2%-1.0%-4.5%
3 Year141.7%129.8%60.0%50.7%14.4%2.9%
5 Year144.2%123.9%57.1%42.6%15.5%-3.8%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

46.6%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 2688 (HK$90.1) is trading below our estimate of fair value (HK$168.57)

Significantly Below Fair Value: 2688 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 2688 is poor value based on its PE Ratio (20.7x) compared to the Gas Utilities industry average (16.4x).

PE vs Market: 2688 is poor value based on its PE Ratio (20.7x) compared to the Hong Kong market (10.1x).


Price to Earnings Growth Ratio

PEG Ratio: 2688 is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: 2688 is overvalued based on its PB Ratio (3.9x) compared to the HK Gas Utilities industry average (1.1x).


Next Steps

Future Growth

How is ENN Energy Holdings forecast to perform in the next 1 to 3 years based on estimates from 21 analysts?

13.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2688's forecast earnings growth (13.2% per year) is above the savings rate (1.6%).

Earnings vs Market: 2688's earnings (13.2% per year) are forecast to grow faster than the Hong Kong market (11.8% per year).

High Growth Earnings: 2688's earnings are forecast to grow, but not significantly.

Revenue vs Market: 2688's revenue (15.5% per year) is forecast to grow faster than the Hong Kong market (10.5% per year).

High Growth Revenue: 2688's revenue (15.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 2688's Return on Equity is forecast to be low in 3 years time (18.9%).


Next Steps

Past Performance

How has ENN Energy Holdings performed over the past 5 years?

8.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 2688 has high quality earnings.

Growing Profit Margin: 2688's current net profit margins (6.3%) are higher than last year (5.5%).


Past Earnings Growth Analysis

Earnings Trend: 2688's earnings have grown by 8% per year over the past 5 years.

Accelerating Growth: 2688's earnings growth over the past year (49.8%) exceeds its 5-year average (8% per year).

Earnings vs Industry: 2688 earnings growth over the past year (49.8%) exceeded the Gas Utilities industry -4.6%.


Return on Equity

High ROE: 2688's Return on Equity (19.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is ENN Energy Holdings's financial position?


Financial Position Analysis

Short Term Liabilities: 2688's short term assets (CN¥19.3B) do not cover its short term liabilities (CN¥29.8B).

Long Term Liabilities: 2688's short term assets (CN¥19.3B) exceed its long term liabilities (CN¥17.6B).


Debt to Equity History and Analysis

Debt Level: 2688's debt to equity ratio (68.5%) is considered high.

Reducing Debt: 2688's debt to equity ratio has reduced from 95.1% to 68.5% over the past 5 years.

Debt Coverage: 2688's debt is well covered by operating cash flow (55.7%).

Interest Coverage: 2688's interest payments on its debt are well covered by EBIT (16.5x coverage).


Balance Sheet

Inventory Level: 2688 has a high level of physical assets or inventory.

Debt Coverage by Assets: 2688's debt is covered by short term assets (assets are 1x debt).


Next Steps

Dividend

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

1.25%

Current Dividend Yield


Dividend Yield vs Market

company1.2%marketbottom25%2.3%markettop25%6.4%industryaverage2.0%forecastin3Years2.4%

Current dividend yield vs market & industry

Notable Dividend: 2688's dividend (1.25%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.28%).

High Dividend: 2688's dividend (1.25%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.38%).


Stability and Growth of Payments

Stable Dividend: 2688's dividends per share have been stable in the past 10 years.

Growing Dividend: 2688's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (26.5%), 2688's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 2688's dividends in 3 years are forecast to be well covered by earnings (37.9% payout ratio).


Next Steps

Management

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

1.3yrs

Average management tenure


CEO

Jishen Han (54yo)

2.1yrs

Tenure

CN¥7,823,000

Compensation

Mr. Han Jishen is the Chief Executive Officer of ENN Energy Holdings Limited since January 12, 2018. Mr. Han served as the President of ENN Energy Holdings Limited until January 12, 2018 and served as its  ...


CEO Compensation Analysis

Compensation vs Market: Jishen's total compensation ($USD1.12M) is about average for companies of similar size in the Hong Kong market ($USD987.80K).

Compensation vs Earnings: Jishen's compensation has increased by more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Yusuo Wang
Co-Founder & Chairman0yrsCN¥3.46m3.55% CN¥3.6b
Zizheng Wang
Executive Chairman0yrsCN¥2.65mno data
Jishen Han
CEO & Executive Director2.1yrsCN¥7.82mno data
Yip Sang Cheung
Vice Chairman5.9yrsCN¥4.81mno data
Dongzhi Wang
Executive Director8.9yrsCN¥2.25m0.0013% CN¥1.3m
Yuying Zhang
Chief Strategy Officer0.2yrsno datano data
Jianfeng Liu
Chief Financial Officer1.3yrsno datano data
Yunfeng Niu
Chief Information Officer0yrsno datano data
Jin Zhang
Chief Human Resources Officer0yrsno datano data
Xiaojing Wu
Senior Vice President0yrsno datano data

1.3yrs

Average Tenure

47.5yo

Average Age

Experienced Management: 2688's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Yusuo Wang
Co-Founder & Chairman0yrsCN¥3.46m3.55% CN¥3.6b
Zizheng Wang
Executive Chairman0yrsCN¥2.65mno data
Jishen Han
CEO & Executive Director2.1yrsCN¥7.82mno data
Yip Sang Cheung
Vice Chairman5.9yrsCN¥4.81mno data
Dongzhi Wang
Executive Director8.9yrsCN¥2.25m0.0013% CN¥1.3m
Yuying Zhang
Chief Strategy Officer0.2yrsno datano data
Yu Yu Yien
Independent Non-Executive Director1.3yrsCN¥33.00k0.0094% CN¥9.5m
Yee Kwan Law
Independent Non-Executive Director5.8yrsCN¥489.00kno data
Zhixiang Ma
Independent Non-Executive Director5.9yrsCN¥489.00kno data
Po Kwong Yuen
Independent Non-Executive Director5.9yrsCN¥489.00kno data

5.9yrs

Average Tenure

51.5yo

Average Age

Experienced Board: 2688's board of directors are considered experienced (5.9 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 been diluted in the past year, with total shares outstanding growing by 3.3%.


Top Shareholders

Company Information

ENN Energy Holdings Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: ENN Energy Holdings Limited
  • Ticker: 2688
  • Exchange: SEHK
  • Founded: 1992
  • Industry: Gas Utilities
  • Sector: Utilities
  • Market Cap: HK$100.957b
  • Shares outstanding: 1.13b
  • Website: https://www.xinaogas.com

Number of Employees


Location

  • ENN Energy Holdings Limited
  • Building A
  • ENN Industrial Park
  • Langfang
  • Hebei Province
  • 65001
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
XNGS.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMay 2001
XGHDB (Deutsche Boerse AG)YesOrdinary SharesDEEURMay 2001
2688SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDMay 2001
2688SHSC (Stock Exchange of Hong Kong Limited - Shanghai - Hong Kong Stock Connect)YesOrdinary SharesHKHKDMay 2001
2688SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDMay 2001
XNGS.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDOct 2008

Biography

ENN Energy Holdings Limited, an investment holding company, engages in the investment, construction, operation, and management of gas pipeline infrastructures, vehicle and ship refuelling stations, and integrated energy stations in the People’s Republic of China. It operates through Construction and Installation, Sales of Piped Gas, Vehicle Gas Refueling Stations, Wholesale of Gas, Sales of Integrated Energy and Services, Sales of Gas Appliances, and Sales of Material segments. The company also sells and distributes piped gas, liquefied natural gas, and other multi-energy products; and provides other services in relation to energy supply, as well as engages in energy trading business. In addition, it retails gas pipelines, and related materials and equipment; transports oil products and gas; and sources compressed pipeline gas, as well as involved in the wholesale and retail of compressed natural gas, gas equipment, appliances, and others; and provision of financial services. As of December 31, 2018, the company served 18,522,733 residential customers and 121,105 commercial/industrial customers with installed designed daily capacity of 106,552,583 cubic meters. The company was formerly known as XinAo Gas Holdings Limited and changed its name to ENN Energy Holdings Limited in September 2010. ENN Energy Holdings Limited was founded in 1992 and is headquartered in Langfang, 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 Analysis2020/02/19 12:37
End of Day Share Price2020/02/19 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.