Stock Analysis

JiaXing Gas Group Co., Ltd.'s (HKG:9908) CEO Will Probably Find It Hard To See A Huge Raise This Year

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Key Insights

  • JiaXing Gas Group to hold its Annual General Meeting on 7th of June
  • Salary of CN¥321.0k is part of CEO Lianqing Sun's total remuneration
  • Total compensation is similar to the industry average
  • Over the past three years, JiaXing Gas Group's EPS grew by 30% and over the past three years, the total loss to shareholders 16%

The underwhelming share price performance of JiaXing Gas Group Co., Ltd. (HKG:9908) in the past three years would have disappointed many shareholders. However, what is unusual is that EPS growth has been positive, suggesting that the share price has diverged from fundamentals. The AGM coming up on the 7th of June could be an opportunity for shareholders to bring these concerns to the board's attention. They could also influence management through voting on resolutions such as executive remuneration. We think shareholders might be reluctant to increase compensation for the CEO at the moment, according to our analysis below.

View our latest analysis for JiaXing Gas Group

Comparing JiaXing Gas Group Co., Ltd.'s CEO Compensation With The Industry

At the time of writing, our data shows that JiaXing Gas Group Co., Ltd. has a market capitalization of HK$1.0b, and reported total annual CEO compensation of CN¥637k for the year to December 2023. Notably, that's a decrease of 8.3% over the year before. Notably, the salary which is CN¥321.0k, represents a considerable chunk of the total compensation being paid.

In comparison with other companies in the Hong Kong Gas Utilities industry with market capitalizations under HK$1.6b, the reported median total CEO compensation was CN¥577k. So it looks like JiaXing Gas Group compensates Lianqing Sun in line with the median for the industry. Moreover, Lianqing Sun also holds HK$226m worth of JiaXing Gas Group stock directly under their own name, which reveals to us that they have a significant personal stake in the company.

Component20232022Proportion (2023)
Salary CN¥321k CN¥230k 50%
Other CN¥316k CN¥465k 50%
Total CompensationCN¥637k CN¥695k100%

Speaking on an industry level, nearly 67% of total compensation represents salary, while the remainder of 33% is other remuneration. In JiaXing Gas Group's case, non-salary compensation represents a greater slice of total remuneration, in comparison to the broader industry. If total compensation veers towards salary, it suggests that the variable portion - which is generally tied to performance, is lower.

SEHK:9908 CEO Compensation May 31st 2024

A Look at JiaXing Gas Group Co., Ltd.'s Growth Numbers

JiaXing Gas Group Co., Ltd.'s earnings per share (EPS) grew 30% per year over the last three years. It saw its revenue drop 15% over the last year.

This demonstrates that the company has been improving recently and is good news for the shareholders. It's always a tough situation when revenues are not growing, but ultimately profits are more important. Although we don't have analyst forecasts, you might want to assess this data-rich visualization of earnings, revenue and cash flow.

Has JiaXing Gas Group Co., Ltd. Been A Good Investment?

Given the total shareholder loss of 16% over three years, many shareholders in JiaXing Gas Group Co., Ltd. are probably rather dissatisfied, to say the least. Therefore, it might be upsetting for shareholders if the CEO were paid generously.

To Conclude...

Despite the growth in its earnings, the share price decline in the past three years is certainly concerning. The fact that the stock price hasn't grown along with earnings may indicate that other issues may be affecting that stock. If there are some unknown variables that are influencing the stock's price, surely shareholders would have some concerns. At the upcoming AGM, shareholders will get the opportunity to discuss any issues with the board, including those related to CEO remuneration and assess if the board's plan will likely improve performance in the future.

CEO compensation is a crucial aspect to keep your eyes on but investors also need to keep their eyes open for other issues related to business performance. We've identified 1 warning sign for JiaXing Gas Group that investors should be aware of in a dynamic business environment.

Of course, you might find a fantastic investment by looking at a different set of stocks. So take a peek at this free list of interesting companies.

Valuation is complex, but we're helping make it simple.

Find out whether JiaXing Gas Group is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.