SEHK:855

Stock Analysis Report

China Water Affairs Group

Executive Summary

China Water Affairs Group Limited, an investment holding company, engages in the water supply, sewage treatment, and property businesses in the People’s Republic of China.

Snowflake

Fundamentals

Good value with proven track record and pays a dividend.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: 855 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-2.3%

855

-1.8%

HK Water Utilities

-1.9%

HK Market


1 Year Return

-21.5%

855

7.0%

HK Water Utilities

1.0%

HK Market

Return vs Industry: 855 underperformed the Hong Kong Water Utilities industry which returned 7% over the past year.

Return vs Market: 855 underperformed the Hong Kong Market which returned 1% over the past year.


Shareholder returns

855IndustryMarket
7 Day-2.3%-1.8%-1.9%
30 Day-0.8%1.0%2.3%
90 Day-0.2%2.1%7.4%
1 Year-18.3%-21.5%11.2%7.0%4.7%1.0%
3 Year25.1%11.8%24.6%12.0%22.6%10.3%
5 Year65.4%42.4%30.4%12.7%21.5%1.3%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is China Water Affairs Group undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: 855 (HK$6.05) is trading below our estimate of fair value (HK$38.86)

Significantly Below Fair Value: 855 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: 855 is poor value based on its PE Ratio (7.1x) compared to the Water Utilities industry average (5.7x).

PE vs Market: 855 is good value based on its PE Ratio (7.1x) compared to the Hong Kong market (10.4x).


Price to Earnings Growth Ratio

PEG Ratio: 855 is good value based on its PEG Ratio (0.5x)


Price to Book Ratio

PB vs Industry: 855 is overvalued based on its PB Ratio (1.2x) compared to the HK Water Utilities industry average (0.6x).


Next Steps

Future Growth

How is China Water Affairs Group forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

14.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: 855's forecast earnings growth (14.5% per year) is above the savings rate (2%).

Earnings vs Market: 855's earnings (14.5% per year) are forecast to grow faster than the Hong Kong market (11% per year).

High Growth Earnings: 855's earnings are forecast to grow, but not significantly.

Revenue vs Market: 855's revenue (12% per year) is forecast to grow faster than the Hong Kong market (10.2% per year).

High Growth Revenue: 855's revenue (12% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: 855's Return on Equity is forecast to be low in 3 years time (18.7%).


Next Steps

Past Performance

How has China Water Affairs Group performed over the past 5 years?

30.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: 855 has high quality earnings.

Growing Profit Margin: 855's current net profit margins (16.5%) are higher than last year (15%).


Past Earnings Growth Analysis

Earnings Trend: 855's earnings have grown significantly by 30.6% per year over the past 5 years.

Accelerating Growth: 855's earnings growth over the past year (20.1%) is below its 5-year average (30.6% per year).

Earnings vs Industry: 855 earnings growth over the past year (20.1%) exceeded the Water Utilities industry 16.5%.


Return on Equity

High ROE: 855's Return on Equity (16.5%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is China Water Affairs Group's financial position?


Financial Position Analysis

Short Term Liabilities: 855's short term assets (HK$11.3B) exceeds its short term liabilities (HK$10.0B)

Long Term Liabilities: 855's short term assets (11.3B) do not cover its long term liabilities (12.9B)


Debt to Equity History and Analysis

Debt Level: 855's debt to equity ratio (118%) is considered high

Reducing Debt: 855's debt to equity ratio has increased from 86.1% to 118% over the past 5 years.

Debt Coverage: 855's debt is not well covered by operating cash flow (6.7%).

Interest Coverage: 855's interest payments on its debt are well covered by EBIT (13.1x coverage).


Balance Sheet

Inventory Level: 855 has a low level of unsold assets or inventory.

Debt Coverage by Assets: 855's debt is not covered by short term assets (assets are 0.7x debt).


Next Steps

Dividend

What is China Water Affairs Group's current dividend yield, its reliability and sustainability?

4.63%

Current Dividend Yield


Dividend Yield vs Market

company4.6%marketbottom25%2.2%markettop25%6.3%industryaverage3.7%forecastin3Years6.0%

Current dividend yield vs market & industry

Notable Dividend: 855's dividend (4.63%) is higher than the bottom 25% of dividend payers in the Hong Kong market (2.19%).

High Dividend: 855's dividend (4.63%) is low compared to the top 25% of dividend payers in the Hong Kong market (6.28%).


Stability and Growth of Payments

Stable Dividend: 855's dividend payments have been volatile in the past 10 years.

Growing Dividend: 855's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (32.9%), 855's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: 855's dividends in 3 years are forecast to be well covered by earnings (32.3% payout ratio).


Next Steps

Management

What is the CEO of China Water Affairs Group's salary, the management and board of directors tenure and is there insider trading?

7.3yrs

Average board tenure


CEO

China Water Affairs Group has no CEO, or we have no data on them.


Board Age and Tenure

7.3yrs

Average Tenure

55.5yo

Average Age

Experienced Board: 855's board of directors are considered experienced (7.3 years average tenure).


Insider Trading

Insider Buying: 855 insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyHK$610,00027 Sep 19
Yu Jie Liu
EntityIndividual
Role
Member of the Board of Directors
Executive Director
Shares100,000
Max PriceHK$6.10
BuyHK$1,683,68003 Sep 19
Chuan Liang Duan
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares272,000
Max PriceHK$6.19
BuyHK$467,40003 Sep 19
Yu Jie Liu
EntityIndividual
Role
Member of the Board of Directors
Executive Director
Shares76,000
Max PriceHK$6.15
BuyHK$730,80030 Aug 19
Yu Jie Liu
EntityIndividual
Role
Member of the Board of Directors
Executive Director
Shares120,000
Max PriceHK$6.09
BuyHK$2,058,41930 Aug 19
Chuan Liang Duan
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares338,000
Max PriceHK$6.09
BuyHK$1,500,00029 Aug 19
Chuan Liang Duan
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares250,000
Max PriceHK$6.00
BuyHK$1,156,00028 Aug 19
Yu Jie Liu
EntityIndividual
Role
Member of the Board of Directors
Executive Director
Shares200,000
Max PriceHK$5.78
BuyHK$2,307,99928 Aug 19
Chuan Liang Duan
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares400,000
Max PriceHK$5.77
BuyHK$2,754,99827 Aug 19
Chuan Liang Duan
EntityIndividual
Role
Chairman of the Board
Executive Chairman
Shares500,000
Max PriceHK$5.51
BuyHK$823,50027 Aug 19
Yu Jie Liu
EntityIndividual
Role
Member of the Board of Directors
Executive Director
Shares150,000
Max PriceHK$5.49
BuyHK$714,50008 Jul 19
Zhong Li
EntityIndividual
Role
Member of the Board of Directors
Executive Director
Shares100,000
Max PriceHK$7.14

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.4%.


Management Team

  • Chuan Liang Duan (56yo)

    Executive Chairman

    • Tenure: 0yrs
    • Compensation: HK$22.04m
  • Michelle Liu (55yo)

    Executive Director

    • Tenure: 5.2yrs
    • Compensation: HK$4.42m
  • Aston Lie (41yo)

    Company Secretary

    • Tenure: 8.8yrs
  • Bin Ding (43yo)

    Executive Director

    • Tenure: 6.4yrs
    • Compensation: HK$2.12m
  • Zhong Li (51yo)

    Executive Director

    • Tenure: 4.4yrs
    • Compensation: HK$4.24m
  • Jerry Linnan Duan (28yo)

    Executive Director

    • Tenure: 0.08yrs

Board Members

  • Hai Hu Zhao (64yo)

    Non-Executive Director

    • Tenure: 16.3yrs
    • Compensation: HK$678.00k
  • Chuan Liang Duan (56yo)

    Executive Chairman

    • Tenure: 0yrs
    • Compensation: HK$22.04m
  • Donald Chau (56yo)

    Independent Non Executive Director

    • Tenure: 12.7yrs
    • Compensation: HK$348.00k
  • Makoto Inoue (67yo)

    Non-Executive Director

    • Tenure: 7.3yrs
    • Compensation: HK$60.00k
  • King Keung Ong (43yo)

    Independent Non-Executive Director

    • Tenure: 12.7yrs
    • Compensation: HK$300.00k
  • Wen Zhi Zhou (78yo)

    Non-Executive Director

    • Tenure: 15.1yrs
    • Compensation: HK$120.00k
  • Michelle Liu (55yo)

    Executive Director

    • Tenure: 5.2yrs
    • Compensation: HK$4.42m
  • Bin Ding (43yo)

    Executive Director

    • Tenure: 6.4yrs
    • Compensation: HK$2.12m
  • Zhong Li (51yo)

    Executive Director

    • Tenure: 4.4yrs
    • Compensation: HK$4.24m
  • Jerry Linnan Duan (28yo)

    Executive Director

    • Tenure: 0.08yrs

Company Information

China Water Affairs Group Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: China Water Affairs Group Limited
  • Ticker: 855
  • Exchange: SEHK
  • Founded:
  • Industry: Water Utilities
  • Sector: Utilities
  • Market Cap: HK$9.624b
  • Shares outstanding: 1.60b
  • Website: https://www.chinawatergroup.com

Number of Employees


Location

  • China Water Affairs Group Limited
  • Central Plaza
  • 64th Floor
  • Wanchai
  • Hong Kong

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
855SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDOct 1999
CUBBDB (Deutsche Boerse AG)YesOrdinary SharesDEEUROct 1999
CWAF.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDOct 1999
855SZSC (The Stock Exchange of Hong Kong - Shenzhen - Hong Kong Stock Connect)YesOrdinary SharesHKHKDOct 1999
CUBXTRA (XETRA Trading Platform)HKD0.01DEEURApr 2006

Biography

China Water Affairs Group Limited, an investment holding company, engages in the water supply, sewage treatment, and property businesses in the People’s Republic of China. The company’s City Water Supply O ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/12 12:35
End of Day Share Price2019/11/12 00:00
Earnings2019/03/31
Annual Earnings2019/03/31


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.