Eastern Communications Co., Ltd. (600776) 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

Eastern Communications Co., Ltd.

Why is Eastern Communications Co., Ltd. ?

Poor Management Efficiency with a low ROCE of 0.21%

The company has been able to generate a Return on Capital Employed (avg) of 0.21% signifying low profitability per unit of total capital (equity and debt)

Poor long term growth as Net Sales has grown by an annual rate of -1.28% and Operating profit at -225.86% over the last 5 years

The company has declared Negative results for the last 4 consecutive quarters

INTEREST(HY) At CNY 1.62 MM has Grown at 39.16%
NET PROFIT(9M) At CNY 58.19 MM has Grown at -37.7%
NET SALES(HY) At CNY 1,176.84 MM has Grown at -15.83%

With ROE of -2.95%, it has a expensive valuation with a 3.64 Price to Book Value

Over the past year, while the stock has generated a return of 49.64%, its profits have fallen by -159.6%

Market Beating performance in long term as well as near term

Along with generating 49.64% returns in the last 1 year, the stock has outperformed China Shanghai Composite 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 Eastern Communications Co., Ltd. should be less than 10%
Overall Portfolio exposure to Telecom - Equipment & Accessories should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Telecom - Equipment & Accessories)

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

Is Eastern Communications Co., Ltd. for you?

High Risk, High Return

Absolute

Risk Adjusted

Volatility

Eastern Communications Co., Ltd.

26.26%

1.47

48.62%

China Shanghai Composite

13.33%

1.58

14.20%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

-1.28%

EBIT Growth (5y)

-225.86%

EBIT to Interest (avg)

-42.49

Debt to EBITDA (avg)

Negative Net Debt

Net Debt to Equity (avg)

-0.34

Sales to Capital Employed (avg)

0.82

Tax Ratio

50.44%

Dividend Payout Ratio

50.75%

Pledged Shares

Institutional Holding

ROCE (avg)

0.21%

ROE (avg)

3.53%

Valuation

Valuation Scorecard

Valuation grade scale :

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

Valuation Key Factors

Factor

Value

P/E Ratio

NA (Loss Making)

Industry P/E

Price to Book Value

3.64

EV to EBIT

-54.75

EV to EBITDA

-76.52

EV to Capital Employed

6.89

EV to Sales

4.24

PEG Ratio

Dividend Yield

0.45%

ROCE (Latest)

-12.59%

ROE (Latest)

-2.95%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bearish

Bullish

RSI

No Signal

Bollinger Bands

Bearish

Mildly Bullish

Moving Averages

Mildly Bullish (Daily)

KST

Mildly Bearish

Bullish

Dow Theory

Mildly Bearish

Mildly Bullish

OBV

No Trend

Bullish

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

20What is working for the Company

ROCE(HY)

Highest at 11.37%

RAW MATERIAL COST(Y)

Fallen by -50.22% (YoY

CASH AND EQV(HY)

Highest at CNY 3,470.23 MM

PRE-TAX PROFIT(Q)

Highest at CNY 42.19 MM

NET PROFIT(Q)

Highest at CNY 43.84 MM

EPS(Q)

Highest at CNY 0.18

-15What is not working for the Company

INTEREST(HY)

At CNY 1.62 MM has Grown at 39.16%

NET PROFIT(9M)

At CNY 58.19 MM has Grown at -37.7%

NET SALES(HY)

At CNY 1,176.84 MM has Grown at -15.83%

INVENTORY TURNOVER RATIO(HY)

Lowest at 3.46 times

DEBTORS TURNOVER RATIO(HY)

Lowest at 2.54 times

Here's what is working for Eastern Communications Co., Ltd.

Pre-Tax Profit

At CNY 42.19 MM has Grown at 585.65%

Year on Year (YoY)

MOJO Watch

Near term Pre-Tax Profit trend is very positive

Pre-Tax Profit (CNY MM)

Net Profit

At CNY 43.84 MM has Grown at 1,737.46%

Year on Year (YoY)

MOJO Watch

Near term Net Profit trend is very positive

Net Profit (CNY MM)

Pre-Tax Profit

Highest at CNY 42.19 MM

in the last five periods

MOJO Watch

Near term Pre-Tax Profit trend is positive

Pre-Tax Profit (CNY MM)

Net Profit

Highest at CNY 43.84 MM

in the last five periods

MOJO Watch

Near term Net Profit trend is positive

Net Profit (CNY MM)

EPS

Highest at CNY 0.18

in the last five periods

MOJO Watch

Increasing profitability; company has created higher earnings for shareholders

EPS (CNY)

Cash and Eqv

Highest at CNY 3,470.23 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is improving

Cash and Cash Equivalents

Raw Material Cost

Fallen by -50.22% (YoY)

MOJO Watch

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

Raw Material Cost as a percentage of Sales

Here's what is not working for Eastern Communications Co., Ltd.

Interest

At CNY 1.62 MM has Grown at 39.16%

over previous Semi-Annual period

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (CNY MM)

Net Sales

At CNY 1,176.84 MM has Grown at -15.83%

Year on Year (YoY)

MOJO Watch

Near term sales trend is very negative

Net Sales (CNY MM)

Inventory Turnover Ratio

Lowest at 3.46 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling inventory has slowed

Inventory Turnover Ratio

Debtors Turnover Ratio

Lowest at 2.54 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling Debtors has slowed

Debtors Turnover Ratio