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Why Fundamental Investors Might Love Shenzhen International Holdings Limited (HKG:152)

Simply Wall St

I've been keeping an eye on Shenzhen International Holdings Limited (HKG:152) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe 152 has a lot to offer. Basically, it is a financially-sound company with a great history of performance, trading at a great value. Below, I've touched on some key aspects you should know on a high level. For those interested in digging a bit deeper into my commentary, take a look at the report on Shenzhen International Holdings here.

Good value with proven track record and pays a dividend

152 delivered a bottom-line expansion of 25% in the prior year, with its most recent earnings level surpassing its average level over the last five years. Not only did 152 outperformed its past performance, its growth also surpassed the Infrastructure industry expansion, which generated a 2.2% earnings growth. This is an optimistic signal for the future. 152 is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This suggests prudent control over cash and cost by management, which is a key determinant of the company’s health. 152’s earnings amply cover its interest expense. Paying interest on time and in full can help the company get favourable debt terms in the future, leading to lower cost of debt and helps 152 expand.

SEHK:152 Income Statement, September 5th 2019

152's shares are now trading at a price below its true value based on its discounted cash flows, indicating a relatively pessimistic market sentiment. According to my intrinsic value of the stock, which is driven by analyst consensus forecast of 152's earnings, investors now have the opportunity to buy into the stock to reap capital gains. Also, relative to the rest of its peers with similar levels of earnings, 152's share price is trading below the group's average. This bolsters the proposition that 152's price is currently discounted.

SEHK:152 Price Estimation Relative to Market, September 5th 2019

Next Steps:

For Shenzhen International Holdings, I've put together three fundamental factors you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for 152’s future growth? Take a look at our free research report of analyst consensus for 152’s outlook.
  2. Dividend Income vs Capital Gains: Does 152 return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from 152 as an investment.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of 152? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.