SGX:H22

Stock Analysis Report

Executive Summary

Hong Leong Asia Ltd., an investment holding company, manufactures and distributes diesel engines and related products, building materials, industrial packaging products, and air-conditioning systems in the People’s Republic of China, Singapore, Malaysia, and internationally.

Snowflake

Fundamentals

Flawless balance sheet and fair value.

Share Price & News

How has Hong Leong Asia's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: H22 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-8.1%

H22

-0.3%

SG Machinery

-0.6%

SG Market


1 Year Return

13.6%

H22

-14.0%

SG Machinery

3.8%

SG Market

Return vs Industry: H22 exceeded the SG Machinery industry which returned -14% over the past year.

Return vs Market: H22 exceeded the SG Market which returned 3.8% over the past year.


Shareholder returns

H22IndustryMarket
7 Day-8.1%-0.3%-0.6%
30 Day7.8%5.3%2.8%
90 Day10.6%6.0%2.9%
1 Year13.6%13.6%-12.1%-14.0%8.0%3.8%
3 Year-4.1%-7.4%14.9%7.5%19.8%7.0%
5 Year-50.1%-53.7%-33.3%-41.0%11.5%-7.1%

Price Volatility Vs. Market

How volatile is Hong Leong Asia's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Hong Leong Asia 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: H22 (SGD0.63) is trading below our estimate of fair value (SGD1.83)

Significantly Below Fair Value: H22 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: H22 is poor value based on its PE Ratio (13.1x) compared to the Machinery industry average (9.2x).

PE vs Market: H22 is good value based on its PE Ratio (13.1x) compared to the SG market (13.3x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate H22's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: H22 is overvalued based on its PB Ratio (0.6x) compared to the SG Machinery industry average (0.6x).


Next Steps

Future Growth

How is Hong Leong Asia forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

26.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: H22's forecast earnings growth (26.1% per year) is above the savings rate (2.3%).

Earnings vs Market: H22's earnings (26.1% per year) are forecast to grow faster than the SG market (5.5% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: Insufficient data to determine if H22's revenue is forecast to grow faster than the SG market.

High Growth Revenue: Insufficient data to determine if H22's revenue is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if H22's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Hong Leong Asia performed over the past 5 years?

3.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: H22 has high quality earnings.

Growing Profit Margin: H22's current net profit margins (0.8%) are lower than last year (1%).


Past Earnings Growth Analysis

Earnings Trend: H22's earnings have grown by 3.5% per year over the past 5 years.

Accelerating Growth: H22's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: H22 had negative earnings growth (-18.1%) over the past year, making it difficult to compare to the Machinery industry average (4.6%).


Return on Equity

High ROE: H22's Return on Equity (6.8%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Hong Leong Asia's financial position?


Financial Position Analysis

Short Term Liabilities: H22's short term assets (SGD3.9B) exceeds its short term liabilities (SGD2.6B)

Long Term Liabilities: H22's short term assets (3.9B) exceeds its long term liabilities (367.4M)


Debt to Equity History and Analysis

Debt Level: H22's debt to equity ratio (37.4%) is considered satisfactory

Reducing Debt: H22's debt to equity ratio has reduced from 40.1% to 37.4% over the past 5 years.

Debt Coverage: H22's debt is well covered by operating cash flow (31.7%).

Interest Coverage: H22's interest payments on its debt are well covered by EBIT (6.4x coverage).


Balance Sheet

Inventory Level: H22 has a high level of physical assets or inventory.

Debt Coverage by Assets: H22's debt is covered by short term assets (assets are 4.6x debt).


Next Steps

Dividend

What is Hong Leong Asia's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

company0%marketbottom25%2.5%markettop25%5.5%industryaverage4.4%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate H22's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate H22's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if H22's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if H22's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: H22 is not paying a notable dividend for the SG market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of H22's dividend in 3 years as they are not forecast to pay a notable one for the SG market.


Next Steps

Management

What is the CEO of Hong Leong Asia's salary, the management and board of directors tenure and is there insider trading?

3.8yrs

Average management tenure


CEO

Eng Kwee Tan (65yo)

1.8yrs

Tenure

0

Mr. Eng Kwee Tan has been Non Executive Director of Tasek Corporation Berhad since January 2, 2019. Mr. Tan has been Director of China Yuchai International Limited since February 22, 2019. He has been Chie ...


Management Age and Tenure

3.8yrs

Average Tenure

58yo

Average Age

Experienced Management: H22's management team is considered experienced (3.8 years average tenure).


Board Age and Tenure

2.5yrs

Average Tenure

63yo

Average Age

Experienced Board: H22's board of directors are not considered experienced ( 2.5 years average tenure), which suggests a new board.


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 been substantially diluted in the past year, with total shares outstanding growing by 67.5%.


Management Team

  • Leng Peck Kwek (63yo)

    Executive Chairman

    • Tenure: 2.6yrs
    • Compensation: S$883.00k
  • Weng Ming Hoh (58yo)

    President of Diesel Engines Unit & China Yuchai International Limited

    • Tenure: 6.3yrs
  • Joanne Yeo

    Company Secretary

    • Tenure: 0yrs
  • Jaslin Ng

    Company Secretary

    • Tenure: 0yrs
  • Eng Kwee Tan (65yo)

    CEO & Executive Director

    • Tenure: 1.8yrs
  • Harjanto Kwek (50yo)

    General Manager of Group Human Resources

    • Tenure: 0yrs
  • Siah Lee (54yo)

    Chief Operations Officer of Industrial Packaging Group

    • Tenure: 3.8yrs
  • Benedict Lee

    Head of Internal Audit

    • Tenure: 4yrs
  • Sook Han Leong

    Chief Financial Officer

    • Tenure: 1.1yrs
  • Raymond Lim

    General Manager of Airwell Air-conditioning Technology (China) Co.

    • Tenure: 0yrs

Board Members

  • Ernest Colin Lee (78yo)

    Lead Independent Director

    • Tenure: 6.8yrs
    • Compensation: S$134.00k
  • Leng Peck Kwek (63yo)

    Executive Chairman

    • Tenure: 2.6yrs
    • Compensation: S$883.00k
  • Eng Kwee Tan (65yo)

    CEO & Executive Director

    • Tenure: 1.8yrs
  • Sey Ming Ng (44yo)

    Independent Non-Executive Director

    • Tenure: 2.5yrs
    • Compensation: S$65.00k
  • Caroline Kwong (60yo)

    Non-Executive & Independent Director

    • Tenure: 3.8yrs
    • Compensation: S$100.00k
  • Chian Khong Tan (63yo)

    Independent Non-Executive Director

    • Tenure: 1.7yrs

Company Information

Hong Leong Asia Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Hong Leong Asia Ltd.
  • Ticker: H22
  • Exchange: SGX
  • Founded: 1941
  • Industry: Construction Machinery and Heavy Trucks
  • Sector: Capital Goods
  • Market Cap: S$467.386m
  • Shares outstanding: 747.82m
  • Website: https://www.hlasia.com.sg

Number of Employees


Location

  • Hong Leong Asia Ltd.
  • No. 26-00 Hong Leong Building
  • 16 Raffles Quay
  • Singapore
  • 48581
  • Singapore

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
H22SGX (Singapore Exchange)YesOrdinary SharesSGSGDMar 1998

Biography

Hong Leong Asia Ltd., an investment holding company, manufactures and distributes diesel engines and related products, building materials, industrial packaging products, and air-conditioning systems in the ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/16 12:40
End of Day Share Price2019/11/15 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.