Recent Share Price: HK$4.41 (H Shares)
Accounting: Hong Kong Accounting Standards
Fiscal Year: Dec. 31st
Market Cap: ¥2.16 billion ($316 million)
The principal activities are construction services, real estate development and manufacturing and distribution of building materials in the PRC.
The company was founded by Bao Gen Pang in 1974 and is headquartered in Shaoxing, China
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2018
As of June 4th, Baoye has bought back an additional 22,616,000 H Shares, lowering overall share count to 563,594,053.
2017
During the year ended 31 December 2017, Baoye repurchased 23,500,000 H Shares, representing approximately 8.98% and 3.84% of the total number of H Shares and a total number of issued shares of the Company, respectively. The total amounts paid were HKD133,713,000 (equivalent to RMB118,420,000). Baoye canceled 26,162,000 H Shares.
Share Repurchases
Beginning in 2014, the company has reduced overall share count by ~15%
H-Shares |
Hong Kong $ |
Chinese RMB |
Share Count* |
% Reduction |
|
2018 |
22,616,000 |
563,594,000 |
-4% |
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2017 |
23,500,000 |
133,713,000 $ |
¥118,420,000 |
586,210,000 |
-4% |
2016 |
2,662,000 |
15,159,000 $ |
¥13,535,000 |
612,372,000 |
0% |
2015 |
19,372,000 |
129,927,000 $ |
¥104,240,000 |
612,372,000 |
-3% |
2014 |
31,220,000 |
151,070,000 $ |
¥121,982,000 |
631,744,000 |
-5% |
2013 |
662,964,000 |
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*Based on retired shares; 2018 estimate |
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Risk of Fraud
For the last 10 years, the company has been profitable every year; in addition, the company has net borrowings of ¥216,781,000, dividends paid of ¥(755,795,000), and share buys backs of over ¥(400,000,000) — for a net outflow of ~¥(1 billion). The last issuance of shares was in 2007.
Total compensation for executives in 2017 was ¥4,380,000; EBITDA reported in 2017 was ¥852,429,000. The company does not report any executive loans.
Insiders control over 50% of shares outstanding.
| Pang Baogen (Chairman) | 193,753,054 | 34.38% |
| Wang Jianguo | 47,950,291 | 8.51% |
| Gao Jiming | 12,059,254 | 2.14% |
| Gao Lin | 9,544,775 | 1.69% |
| Xu Gang | 5,971,303 | 1.06% |
| Gao Jun | 5,794,259 | 1.03% |
| Lou Zhonghua | 4,533,172 | 0.80% |
| Wang Rongbiao | 2,647,911 | 0.47% |
| Jin Jixiang | 2,440,527 | 0.43% |
| 50.51% |
Yi Cai Zhu, via his wife, reports significant holdings in the H Shares. I do now know what his association is with the company — if any.
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| In Millions | 12/31/15 | 12/31/16 | 12/31/17 | 6/30/18 |
| Cash and Short-term Investments | ¥3,839.73 | ¥4,373.00 | ¥2,915.45 | ¥3,865.83 |
| (0.85 * Accounts Receivable) | ¥5,061.75 | ¥6,183.75 | ¥8,409.90 | ¥8,757.55 |
| (0.60 * Inventory) | ¥4,288.80 | ¥4,308.60 | ¥4,959.60 | ¥4,629.60 |
| (0.25 * Other Current) | ¥136.72 | ¥266.25 | ¥699.50 | ¥239.58 |
| Total Liabilities | ¥13,622.00 | ¥15,881.00 | ¥20,646.00 | ¥19,608.00 |
| Preferred Stock | ¥- | ¥- | ¥- | ¥- |
| NNWC | ¥(295.00) | ¥(749.40) | ¥(3,661.55) | ¥(2,115.44) |
| NCAV | ¥3,867.00 | ¥4,012.00 | ¥3,227.00 | ¥3,236.00 |
| NCAV + LT Investments | ¥4,552.58 | ¥4,717.95 | ¥4,228.00 | ¥4,543.00 |
| TBV | ¥6,358.47 | ¥6,810.47 | ¥7,301.47 | ¥7,887.47 |
| Enterprise Value | ¥(361.52) | ¥(857.83) | ¥1,515.62 | ¥546.45 |
| Retained Earnings | ¥4,907.18 | ¥5,372.10 | ¥5,960.20 | ¥6,659.83 |
| Dividends Paid | ¥(61.24) | ¥(61.24) | ¥- | ¥- |
| Sale or Purchase of Stock | ¥(104.24) | ¥(44.68) | ¥(92.16) | ¥- |
| Shares Outstanding | 612,372,000 | 612,372,000 | 586,210,000 | 563,594,000 |
| P / NNWC | -946% | -409% | -68% | -97% |
| P / NCAV | 72% | 76% | 77% | 63% |
| P / NCAV + LT Investments | 61% | 65% | 59% | 45% |
| P / TBV | 44% | 45% | 34% | 26% |
| NCAV Burn Rate | 17.0% | 3.7% | -19.6% | 0.3% |
| Debt / Equity | 8.4% | 4.1% | 24.0% | 27.4% |
| Sloan Accrual Ratio | -4.8% | 2.2% | 9.4% | |
| F-Score | 6 | 5 | 3 | |
| FS-Score | 7 | 5 | 3 | |
| Z-Score | 1.8 | 1.6 | 1.3 | |
| Beneish M-Score | (1.5) | |||
| EV / EBITDA | (0.38) | (1.16) | 1.78 | |
| EV / Operating Income (5yr) | (0.07) | (0.18) | 0.35 | |
| EV / Operating Income (10yr) | 0.17 | |||
| EV / FCF (3yr) | (0.16) | (0.33) | NA | |
| EV / FCF (5yr) | (0.21) | (0.27) | 5.39 | |
| EV / FCF (10yr) | 0.92 | |||
| EBITDA (FY) | 946.11 $ | 738.24 $ | 852.43 $ | |
| Operating Income (5yr) | 5,026.97 $ | 4,716.06 $ | 4,385.34 $ | |
| Operating Income (10yr) | 8,778.16 $ | |||
| FCF (3yr) | 2,296.44 $ | 2,630.62 $ | (299.46) $ | |
| FCF (5yr) | 1,738.42 $ | 3,223.10 $ | 280.98 $ | |
| FCF (10yr) | 1,643.80 $ |
Write Up
Value Investors Club (skierholic)
Disclosure: We own shares in Baoye Group Co Ltd (2355:HKG).
