Lee & Man Chemical Co. Ltd. (746) 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

Lee & Man Chemical Co. Ltd.

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Why is Lee & Man Chemical Co. Ltd. ?

High Management Efficiency with a high ROE of 14.01%

Company's ability to service its debt is strong with a healthy EBIT to Interest (avg) ratio of 23.22

Poor long term growth as Operating profit has grown by an annual rate 2.18% of over the last 5 years

OPERATING CASH FLOW(Y) Lowest at HKD 2,030.12 MM
NET SALES(Q) Lowest at HKD 1,822.81 MM
CASH AND EQV(HY) Lowest at HKD 162.83 MM

With ROE of 9.13%, it has a Fair valuation with a 0.71 Price to Book Value

Over the past year, while the stock has generated a return of 32.96%, its profits have risen by 4.7% ; the PEG ratio of the company is 1.6

Market Beating Performance

The stock has generated a return of 32.96% in the last 1 year, much higher than market (Hang Seng Hong Kong) returns of 8.76%

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Lee & Man Chemical 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 Lee & Man Chemical Co. Ltd. for you?

High Risk, High Return

Absolute

Risk Adjusted

Volatility

Lee & Man Chemical Co. Ltd.

32.96%

0.50

39.93%

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)

4.40%

EBIT Growth (5y)

2.18%

EBIT to Interest (avg)

23.22

Debt to EBITDA (avg)

0.71

Net Debt to Equity (avg)

0.06

Sales to Capital Employed (avg)

0.70

Tax Ratio

19.23%

Dividend Payout Ratio

49.50%

Pledged Shares

Institutional Holding

ROCE (avg)

14.94%

ROE (avg)

14.01%

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

0.71

EV to EBIT

6.99

EV to EBITDA

5.08

EV to Capital Employed

0.72

EV to Sales

1.19

PEG Ratio

1.64

Dividend Yield

6.45%

ROCE (Latest)

10.27%

ROE (Latest)

9.13%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Bearish

Bullish

RSI

No Signal

Bollinger Bands

Mildly Bearish

Mildly Bullish

Moving Averages

Bearish (Daily)

KST

Bearish

Bullish

Dow Theory

Mildly Bearish

OBV

Mildly Bullish

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

RAW MATERIAL COST(Y)

Fallen by -7.93% (YoY

INVENTORY TURNOVER RATIO(HY)

Highest at 4.13 times

-9What is not working for the Company

OPERATING CASH FLOW(Y)

Lowest at HKD 2,030.12 MM

NET SALES(Q)

Lowest at HKD 1,822.81 MM

CASH AND EQV(HY)

Lowest at HKD 162.83 MM

DEBT-EQUITY RATIO (HY)

Highest at 9.86 %

DEBTORS TURNOVER RATIO(HY)

Lowest at 8.32 times

NET PROFIT(Q)

Lowest at HKD 235.01 MM

EPS(Q)

Lowest at HKD 0.28

Here's what is working for Lee & Man Chemical Co. Ltd.

Inventory Turnover Ratio

Highest at 4.13 times

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its inventory faster

Inventory Turnover Ratio

Raw Material Cost

Fallen by -7.93% (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

Depreciation

At HKD 46.78 MM has Grown at 7.67%

period on period (QoQ)

MOJO Watch

The expenditure on assets done by the company has gone into productive use which should positively reflect in the future sales

Depreciation (HKD MM)

Here's what is not working for Lee & Man Chemical Co. Ltd.

Net Sales

Lowest at HKD 1,822.81 MM and Fallen

In each period in the last five periods

MOJO Watch

Near term sales trend is very negative

Net Sales (HKD MM)

Operating Cash Flow

Lowest at HKD 2,030.12 MM

in the last three years

MOJO Watch

The company's cash revenues from business operations are falling

Operating Cash Flows (HKD MM)

Net Profit

Lowest at HKD 235.01 MM

in the last five periods

MOJO Watch

Near term Net Profit trend is negative

Net Profit (HKD MM)

EPS

Lowest at HKD 0.28

in the last five periods

MOJO Watch

Declining profitability; company has created lower earnings for shareholders

EPS (HKD)

Cash and Eqv

Lowest at HKD 162.83 MM

in the last six Semi-Annual periods

MOJO Watch

Short Term liquidity is deteriorating

Cash and Cash Equivalents

Debt-Equity Ratio

Highest at 9.86 %

in the last five Semi-Annual periods

MOJO Watch

The company is borrowing more to fund its operations; it's liquidity situation may be stressed

Debt-Equity Ratio

Debtors Turnover Ratio

Lowest at 8.32 times

in the last five Semi-Annual periods

MOJO Watch

Company's pace of selling Debtors has slowed

Debtors Turnover Ratio

Non Operating Income

Highest at HKD 0.13 MM

in the last five periods

MOJO Watch

Increased income from non business activities may not be sustainable

Non Operating income