Sun Art Retail Group (OTCPK:SURR.F) - Share price, News & Analysis

SURR.F fundamental analysis
Snowflake Score
Valuation	6/6
Future Growth	2/6
Past Performance	2/6
Financial Health	6/6
Dividends	5/6

SURR.F Stock Overview

Sun Art Retail Group Limited, an investment holding company, operates brick-and-mortar stores and online sales channels in the People’s Republic of China.

Rewards

Trading at 82.3% below our estimate of its fair value

Earnings are forecast to grow 14.14% per year

Risk Analysis

Shares are highly illiquid

Unstable dividend track record

Sun Art Retail Group Competitors

Lianhua Supermarket Holdings

SEHK:980

HK$559.8m

Price History & Performance

Summary of all time highs, changes and price drops for Sun Art Retail Group
Historical stock prices
Current Share Price	HK$0.32
52 Week High	HK$0.77
52 Week Low	HK$0.31
Beta	0.44
1 Month Change	0.85%
3 Month Change	-17.08%
1 Year Change	-59.24%
3 Year Change	-64.18%
5 Year Change	n/a
Change since IPO	-72.88%

Shareholder Returns

	SURR.F	US Consumer Retailing	US Market
7D	0%	-0.8%	-2.5%
1Y	-59.2%	11.1%	-10.4%

Return vs Industry: SURR.F underperformed the US Consumer Retailing industry which returned 11.1% over the past year.

Return vs Market: SURR.F underperformed the US Market which returned -10.4% over the past year.

Price Volatility

Is SURR.F's price volatile compared to industry and market?
SURR.F volatility
SURR.F Average Weekly Movement	n/a
Consumer Retailing Industry Average Movement	6.6%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.7%
10% least volatile stocks in US Market	2.8%

Stable Share Price: Insufficient data to determine SURR.F's volatility over the past 3 months.

Volatility Over Time: Insufficient data to determine SURR.F's volatility change over the past year.

About the Company

Founded	Employees	CEO	Website
1998	123,413	Xiaohai Lin	https://www.sunartretail.com

Sun Art Retail Group Limited, an investment holding company, operates brick-and-mortar stores and online sales channels in the People’s Republic of China. It operates hypermarkets, superstores, and mini stores under RT-Mart, RT-Super, and RT-Mini names. As of March 31, 2021, it had a total of 490 hypermarkets, six superstores, and 32 mini stores.

Sun Art Retail Group Fundamentals Summary

How do Sun Art Retail Group's earnings and revenue compare to its market cap?
SURR.F fundamental statistics
Market Cap	CN¥19.39b
Earnings (TTM)	CN¥2.14b
Revenue (TTM)	CN¥97.30b

9.1x

P/E Ratio

0.2x

P/S Ratio

Is SURR.F overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
SURR.F income statement (TTM)
Revenue	CN¥97.30b
Cost of Revenue	CN¥73.24b
Gross Profit	CN¥24.05b
Other Expenses	CN¥21.91b
Earnings	CN¥2.14b

Last Reported Earnings

Sep 30, 2021

Next Earnings Date

May 24, 2022

Earnings per share (EPS)	0.22
Gross Margin	24.72%
Net Profit Margin	2.20%
Debt/Equity Ratio	0%

How did SURR.F perform over the long term?

See historical performance and comparison

Dividends

4.4%

Current Dividend Yield

39%

Payout Ratio

Valuation

Is Sun Art Retail Group undervalued compared to its fair value and its price relative to the market?

Valuation Score

6/6

Valuation Score 6/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

>50%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: SURR.F ($0.32) is trading below our estimate of fair value ($1.81)

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

Price To Earnings Ratio

PE vs Industry: SURR.F is good value based on its PE Ratio (9.1x) compared to the US Consumer Retailing industry average (19.2x).

PE vs Market: SURR.F is good value based on its PE Ratio (9.1x) compared to the US market (15.6x).

Price to Earnings Growth Ratio

PEG Ratio: SURR.F is good value based on its PEG Ratio (0.6x)

Price to Book Ratio

PB vs Industry: SURR.F is good value based on its PB Ratio (0.8x) compared to the US Consumer Retailing industry average (2.1x).

Future Growth

How is Sun Art Retail Group forecast to perform in the next 1 to 3 years based on estimates from 11 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

14.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: SURR.F's forecast earnings growth (14.1% per year) is above the savings rate (1.9%).

Earnings vs Market: SURR.F's earnings (14.1% per year) are forecast to grow faster than the US market (12.6% per year).

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

Revenue vs Market: SURR.F's revenue (2.7% per year) is forecast to grow slower than the US market (8% per year).

High Growth Revenue: SURR.F's revenue (2.7% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: SURR.F's Return on Equity is forecast to be low in 3 years time (9.6%).

Past Performance

How has Sun Art Retail Group performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

0.2%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: SURR.F has high quality earnings.

Growing Profit Margin: SURR.F's current net profit margins (2.2%) are lower than last year (3.1%).

Past Earnings Growth Analysis

Earnings Trend: SURR.F's earnings have grown by 0.2% per year over the past 5 years.

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

Earnings vs Industry: SURR.F had negative earnings growth (-28.6%) over the past year, making it difficult to compare to the Consumer Retailing industry average (1.5%).

Return on Equity

High ROE: SURR.F's Return on Equity (8.3%) is considered low.

Financial Health

How is Sun Art Retail Group's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: SURR.F's short term assets (CN¥36.1B) exceed its short term liabilities (CN¥35.6B).

Long Term Liabilities: SURR.F's short term assets (CN¥36.1B) exceed its long term liabilities (CN¥7.1B).

Debt to Equity History and Analysis

Debt Level: SURR.F is debt free.

Reducing Debt: SURR.F has no debt compared to 5 years ago when its debt to equity ratio was 0.1%.

Debt Coverage: SURR.F has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: SURR.F has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

Dividend

What is Sun Art Retail Group current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

4.43%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: SURR.F's dividend (4.43%) is higher than the bottom 25% of dividend payers in the US market (1.54%).

High Dividend: SURR.F's dividend (4.43%) is in the top 25% of dividend payers in the US market (4.05%)

Stability and Growth of Payments

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

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

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (39.2%), SURR.F's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its low cash payout ratio (11.5%), SURR.F's dividend payments are thoroughly covered by cash flows.

Next Steps

Explore strong dividend paying companies in the Consumer Retailing industry.

Management

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

1.9yrs

Average management tenure

CEO

Xiaohai Lin (49 yo)

Tenure

Mr. Xiaohai Lin has been an Executive Director of Sun Art Retail Group Limited since 22 December 2020 and has been its Chief Executive Officer since May 10, 2021. Mr. Lin is the vice-president of Alibaba G...

Leadership Team

Experienced Management: SURR.F's management team is not considered experienced ( 1.9 years average tenure), which suggests a new team.

Board Members

Experienced Board: SURR.F's board of directors are not considered experienced ( 1.4 years average tenure), which suggests a new board.

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.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/14 00:00
End of Day Share Price	2022/04/18 00:00
Earnings	2021/09/30
Annual Earnings	2021/03/31