Hengli Petrochemical Co., Ltd. (600346) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

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Comparison

Company

Score

Quality

Valuation

Financial

Technical

Hengli Petrochemical Co., Ltd.

Why is Hengli Petrochemical Co., Ltd. ?

High Debt Company with a Debt to Equity ratio (avg) at times

Poor long term growth as Net Sales has grown by an annual rate of 12.42% and Operating profit at -14.42% over the last 5 years
High Debt Company with a Debt to Equity ratio (avg) at times
The company has been able to generate a Return on Equity (avg) of 15.69% signifying low profitability per unit of shareholders funds

Poor long term growth as Net Sales has grown by an annual rate of 12.42% and Operating profit at -14.42% over the last 5 years

The company has declared Negative results for the last 3 consecutive quarters

NET PROFIT(9M) At CNY 4,560.24 MM has Grown at -23.71%
INTEREST(Q) At CNY 1,018.31 MM has Grown at 20.04%
INTEREST COVERAGE RATIO(Q) Lowest at 291.28

With ROE of 8.99%, it has a very attractive valuation with a 1.83 Price to Book Value

Over the past year, while the stock has generated a return of 30.42%, its profits have fallen by -28.2%
At the current price, the company has a high dividend yield of 3.2

Market Beating Performance

The stock has generated a return of 30.42% in the last 1 year, much higher than market (China Shanghai Composite) returns of 14.77%

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Hengli Petrochemical Co., Ltd. should be less than 10%
Overall Portfolio exposure to Specialty Chemicals should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Specialty Chemicals)

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

Is Hengli Petrochemical Co., Ltd. for you?

Medium Risk, High Return

Absolute

Risk Adjusted

Volatility

Hengli Petrochemical Co., Ltd.

30.42%

1.25

27.32%

China Shanghai Composite

14.77%

1.01

14.58%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

12.42%

EBIT Growth (5y)

-14.42%

EBIT to Interest (avg)

3.16

Debt to EBITDA (avg)

6.46

Net Debt to Equity (avg)

2.21

Sales to Capital Employed (avg)

0.97

Tax Ratio

20.26%

Dividend Payout Ratio

44.97%

Pledged Shares

Institutional Holding

ROCE (avg)

8.50%

ROE (avg)

15.69%

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

1.83

EV to EBIT

27.43

EV to EBITDA

11.96

EV to Capital Employed

1.26

EV to Sales

1.15

PEG Ratio

Dividend Yield

3.22%

ROCE (Latest)

4.60%

ROE (Latest)

8.98%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bullish

RSI

No Signal

Bearish

Bollinger Bands

Bullish

Moving Averages

Bullish (Daily)

KST

Bullish

Dow Theory

Mildly Bearish

No Trend

OBV

Mildly Bearish

No Trend

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 CNY 65,218.13 MM

DEBT-EQUITY RATIO (HY)

Lowest at 224.43 %

-11What is not working for the Company

NET PROFIT(9M)

At CNY 4,560.24 MM has Grown at -23.71%

INTEREST(Q)

At CNY 1,018.31 MM has Grown at 20.04%

INTEREST COVERAGE RATIO(Q)

Lowest at 291.28

OPERATING PROFIT(Q)

Lowest at CNY 2,966.15 MM

RAW MATERIAL COST(Y)

Grown by 5.38% (YoY

DEBTORS TURNOVER RATIO(HY)

Lowest at 32.2%

OPERATING PROFIT MARGIN(Q)

Lowest at 5.38 %

Here's what is working for Hengli Petrochemical Co., Ltd.

Cash and Eqv

Highest at CNY 65,218.13 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is improving

Cash and Cash Equivalents

Debt-Equity Ratio

Lowest at 224.43 %

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 Hengli Petrochemical Co., Ltd.

Interest

At CNY 1,018.31 MM has Grown at 20.04%

period on period (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (CNY MM)

Interest Coverage Ratio

Lowest at 291.28

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 CNY 2,966.15 MM and Fallen

In each period in the last five periods

MOJO Watch

Near term Operating Profit trend is quite negative

Operating Profit (CNY MM)

Net Profit

At CNY 4,560.24 MM has Grown at -23.71%

Year on Year (YoY)

MOJO Watch

Near term Net Profit trend is negative

Net Profit (CNY MM)

Operating Profit Margin

Lowest at 5.38 %

in the last five periods

MOJO Watch

Company's profit margin has deteriorated

Operating Profit to Sales

Debtors Turnover Ratio

Lowest at 32.2%

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 5.38% (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