China Xinhua Education Group Ltd. (2779) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

JH Educational Technology, Inc.

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Beauty Farm Medical & Health Industry, Inc.

China Xinhua Education Group Ltd.

Edvantage Group Holdings Ltd.

Shanghai Gench Education Group Ltd.

The Cross-Harbour (Holdings) Ltd.

Shoucheng Holdings Ltd.

Fosun Tourism Group

China Travel International Investment Hong Kong Ltd.

Huayi Tencent Entertainment Co., Ltd.

Why is China Xinhua Education Group Ltd. ?

Company's ability to service its debt is strong with a healthy EBIT to Interest (avg) ratio of 18.17

Poor long term growth as Operating profit has grown by an annual rate 14.90% of over the last 5 years

ROCE(HY) Lowest at 8.62%
INTEREST COVERAGE RATIO(Q) Lowest at 1,760.06
RAW MATERIAL COST(Y) Grown by 32.29% (YoY)

With ROE of 9.25%, it has a Very Attractive valuation with a 0.21 Price to Book Value

Over the past year, while the stock has generated a return of -26.72%, its profits have risen by 9.7% ; the PEG ratio of the company is 0.2

Below par performance in long term as well as near term

Along with generating -26.72% returns in the last 1 year, the stock has also underperformed Hang Seng Hong Kong in the last 3 years, 1 year and 3 months

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to China Xinhua Education Group Ltd. should be less than 10%
Overall Portfolio exposure to Tour, Travel Related Services should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Tour, Travel Related Services)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is China Xinhua Education Group Ltd. for you?

Medium Risk, Low Return

Absolute

Risk Adjusted

Volatility

China Xinhua Education Group Ltd.

-100.0%

-1.06

39.36%

Hang Seng Hong Kong

8.76%

0.45

19.63%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

6.99%

EBIT Growth (5y)

14.90%

EBIT to Interest (avg)

18.17

Debt to EBITDA (avg)

0.13

Net Debt to Equity (avg)

-0.02

Sales to Capital Employed (avg)

0.16

Tax Ratio

2.15%

Dividend Payout Ratio

Pledged Shares

Institutional Holding

ROCE (avg)

8.50%

ROE (avg)

9.60%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

0.21

EV to EBIT

2.50

EV to EBITDA

2.11

EV to Capital Employed

0.20

EV to Sales

1.23

PEG Ratio

0.23

Dividend Yield

ROCE (Latest)

8.06%

ROE (Latest)

9.25%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bearish

RSI

No Signal

Bollinger Bands

Bearish

Moving Averages

Bearish (Daily)

KST

Bearish

Dow Theory

Mildly Bearish

No Trend

OBV

Mildly Bearish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

2What is working for the Company

CASH AND EQV(HY)

Highest at HKD 781.75 MM

DEBT-EQUITY RATIO (HY)

Lowest at -4.01 %

-11What is not working for the Company

ROCE(HY)

Lowest at 8.62%

INTEREST COVERAGE RATIO(Q)

Lowest at 1,760.06

RAW MATERIAL COST(Y)

Grown by 32.29% (YoY

DEBTORS TURNOVER RATIO(HY)

Lowest at 16.94 times

OPERATING PROFIT(Q)

Lowest at HKD 111.06 MM

OPERATING PROFIT MARGIN(Q)

Lowest at 34.33 %

PRE-TAX PROFIT(Q)

Lowest at HKD 92.79 MM

NET PROFIT(Q)

Lowest at HKD 89.46 MM

EPS(Q)

Lowest at HKD 0.06

Here's what is working for China Xinhua Education Group Ltd.

Cash and Eqv

Highest at HKD 781.75 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is improving

Cash and Cash Equivalents

Debt-Equity Ratio

Lowest at -4.01 %

in the last five Semi-Annual periods

MOJO Watch

The company has been reducing its borrowing as compared to equity capital

Debt-Equity Ratio

Here's what is not working for China Xinhua Education Group Ltd.

Interest Coverage Ratio

Lowest at 1,760.06

in the last five periods

MOJO Watch

The company's ability to manage interest payments is deteriorating

Operating Profit to Interest

Operating Profit

Lowest at HKD 111.06 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is negative

Operating Profit (HKD MM)

Operating Profit Margin

Lowest at 34.33 %

in the last five periods

MOJO Watch

Company's profit margin has deteriorated

Operating Profit to Sales

Pre-Tax Profit

Lowest at HKD 92.79 MM

in the last five periods

MOJO Watch

Near term Pre-Tax Profit trend is negative

Pre-Tax Profit (HKD MM)

Net Profit

Lowest at HKD 89.46 MM

in the last five periods

MOJO Watch

Near term Net Profit trend is negative

Net Profit (HKD MM)

EPS

Lowest at HKD 0.06

in the last five periods

MOJO Watch

Declining profitability; company has created lower earnings for shareholders

EPS (HKD)

Debtors Turnover Ratio

Lowest at 16.94 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling Debtors has slowed

Debtors Turnover Ratio

Raw Material Cost

Grown by 32.29% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has deteriorated; this may lead to a fall in profit margin

Raw Material Cost as a percentage of Sales