Linkage Software Co., Ltd. (688588) 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

Linkage Software Co., Ltd.

Why is Linkage Software Co., Ltd. ?

Poor long term growth as Net Sales has grown by an annual rate of 13.67% and Operating profit at 18.56% over the last 5 years

INTEREST COVERAGE RATIO(Q) Lowest at 940.06
RAW MATERIAL COST(Y) Grown by 6.76% (YoY)
NET SALES(Q) Lowest at CNY 251.68 MM

With ROE of 18.57%, it has a fair valuation with a 3.58 Price to Book Value

Over the past year, while the stock has generated a return of -0.55%, its profits have risen by 432.4% ; the PEG ratio of the company is 0
At the current price, the company has a high dividend yield of 1.8

Underperformed the market in the last 1 year

Even though the market (China Shanghai Composite) has generated returns of 14.77% in the last 1 year, the stock has hugely underperformed and has generate negative returns of -0.55% returns

Real-Time Research Report

Verdict Report

How much should you sell?

All quantity irrespective of whether you are making profits or losses

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

When to re-enter? - We will constantly monitor the company and review our call based on new data

Is Linkage Software Co., Ltd. for you?

High Risk, High Return

Absolute

Risk Adjusted

Volatility

Linkage Software Co., Ltd.

-0.55%

1.92

52.00%

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)

13.67%

EBIT Growth (5y)

18.56%

EBIT to Interest (avg)

100.00

Debt to EBITDA (avg)

Net Debt to Equity (avg)

-0.50

Sales to Capital Employed (avg)

0.59

Tax Ratio

16.19%

Dividend Payout Ratio

62.74%

Pledged Shares

Institutional Holding

ROCE (avg)

27.40%

ROE (avg)

10.43%

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

3.58

EV to EBIT

24.72

EV to EBITDA

20.33

EV to Capital Employed

6.59

EV to Sales

3.46

PEG Ratio

0.04

Dividend Yield

1.80%

ROCE (Latest)

26.65%

ROE (Latest)

18.57%

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

No Trend

OBV

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

21What is working for the Company

PRE-TAX PROFIT(Q)

At CNY 74.05 MM has Grown at 996.38%

OPERATING CASH FLOW(Y)

Highest at CNY 202.56 MM

NET SALES(9M)

At CNY 832.41 MM has Grown at 32.79%

ROCE(HY)

Highest at 15.82%

NET PROFIT(9M)

Higher at CNY 179.51 MM

INVENTORY TURNOVER RATIO(HY)

Highest at 99.25%

-17What is not working for the Company

INTEREST COVERAGE RATIO(Q)

Lowest at 940.06

RAW MATERIAL COST(Y)

Grown by 6.76% (YoY

NET SALES(Q)

Lowest at CNY 251.68 MM

INTEREST(Q)

Highest at CNY 2.25 MM

OPERATING PROFIT(Q)

Lowest at CNY 21.19 MM

OPERATING PROFIT MARGIN(Q)

Lowest at 8.42 %

Here's what is working for Linkage Software Co., Ltd.

Pre-Tax Profit

At CNY 74.05 MM has Grown at 996.38%

Year on Year (YoY)

MOJO Watch

Near term Pre-Tax Profit trend is very positive

Pre-Tax Profit (CNY MM)

Net Profit

At CNY 64.43 MM has Grown at 643.73%

Year on Year (YoY)

MOJO Watch

Near term Net Profit trend is very positive

Net Profit (CNY MM)

Operating Cash Flow

Highest at CNY 202.56 MM

in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (CNY MM)

Inventory Turnover Ratio

Highest at 99.25%

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its inventory faster

Inventory Turnover Ratio

Here's what is not working for Linkage Software Co., Ltd.

Interest

At CNY 2.25 MM has Grown at 20.22%

period on period (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (CNY MM)

Interest Coverage Ratio

Lowest at 940.06

in the last five periods

MOJO Watch

The company's ability to manage interest payments is deteriorating

Operating Profit to Interest

Net Sales

Lowest at CNY 251.68 MM

in the last five periods

MOJO Watch

Near term sales trend is negative

Net Sales (CNY MM)

Interest

Highest at CNY 2.25 MM

in the last five periods and Increased by 20.22% (QoQ)

MOJO Watch

Rising interest cost signifies increased borrowings

Interest Paid (CNY MM)

Operating Profit

Lowest at CNY 21.19 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is negative

Operating Profit (CNY MM)

Operating Profit Margin

Lowest at 8.42 %

in the last five periods

MOJO Watch

Company's profit margin has deteriorated

Operating Profit to Sales

Raw Material Cost

Grown by 6.76% (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