China Hanking Holdings Ltd. : Neutral assessment

China Hanking Holdings Ltd. moves from OVERVALUED to NEUTRAL

It has a Fundamental Analysis Score of 75 and a Capital Cube Implied Price of 1.32 HKD

Relative Valuation

China Hanking Holdings Ltd. is currently neutrally valued, as its previous close of HKD 1.39 lies within the CapitalCube estimate range of HKD 1.25 to HKD 1.40. Over the last 52 week period, China Hanking Holdings Ltd. has fluctuated between HKD 0.97 and HKD 1.50.

Relative Valuation

Company Overview

  • Relative outperformance over the last year and the last month suggest a leading position.
  • China Hanking Holdings Ltd. currently trades at a higher Price/Book ratio (1.38) than its peer median (1.00).
  • 3788-HK outperforms its peers with a relatively high operating performance and the market also expects faster growth relative to its peers
  • 3788-HK has relatively high profit margins while operating with median asset turns.
  • Changes in annual revenues (relative to peers) are better than the change in its earnings (relative to peers), implying the company is focused more on revenues.
  • Over the last five years, 3788-HK’s return on assets has declined from above median to about median among its peers, indicating declining relative operating performance.
  • The company’s relatively high gross and pre-tax margins suggest a differentiated product portfolio and tight control on operating costs relative to peers.
  • While 3788-HK’s revenues growth has been around the peer median in recent years, the market seems to see faster growth ahead and gives its shares a higher than peer median PE ratio.
  • The company’s level of capital investment seems appropriate to support the company’s growth.
  • 3788-HK seems to be constrained by the current level of debt.

Investment Outlook

China Hanking Holdings Ltd. has a fundamental score of 75 and has a relative valuation of NEUTRAL.

China Hanking Holdings Ltd. appears on the top right hand quadrant of CapitalCube’s Value – Price Matrix. We classify this as ‘Safety’. In other words, China Hanking Holdings Ltd. has a relatively high Fundamental Analysis score of 75, while being potentially overvalued and trading higher than its CapitalCube Implied Price of 1.32. There might be some safety in this stock where it’s fundamental strength perhaps justifies its relatively higher price.

Fundamentals Vs Relative Valuation

Drivers of Valuation

3788-HK has an Outperforming profile relative to peers.

3788-HK achieved a better operating performance than the median of its chosen peers (ROE of 10.46% compared to the peer median ROE of 8.30%) and the market still expects faster growth from it than from those peers (PE of 14.00 compared to peer median of 10.48).

The company currently trades at a higher Price/Book ratio of 1.38 compared to its peer median of 1.00.

Valuation Drivers

3788-HK has moved to an Outperforming from an Harvesting profile at the prior year-end.

ROE % (On Common Equity)
 

Peer Analysis

A complete list of valuation metrics is available on the company page.

Company Profile

China Hanking Holdings Ltd. operates as holding company, which engages exploration, mining, processing and selling the product of iron ore concentrates. It operates through one segment is the iron ore mining and processing operation. The company’s products are used among local steel-making customers. China Hanking Holdings was founded by Yang Min and Yang Jiye on August 2, 2010 and is headquartered in Shenyang, China.

Disclaimer

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