Shanghai stock alert

CHINA

Morning Alert: Founder Securities lifts 2.9% on strong volume 19 June 2018 10:49 CST

NEWS BITES - BRIC

Founder Securities Co Ltd. (SS:601901) traded on heavy volume of 3.1 times average so far today while the price lifted 17.0 fen (or 2.9%) to trade at CNY6.09.

SECTION 1: The past week

Current indications of bullish signals that support the trend in the unusual trading

1.1 At a glance

Weekly: Founder Securities increases 1.7% on weak volume June 15, 2018 15:30 CST

Founder Securities Co Ltd. (SS:601901), Shanghai's 5th largest Diversified financial services company by market cap, has increased 10.0 fen (or 1.7%) in the past week to close at CNY5.92, ending a three-week streak of losses. Compared with the SSE Composite Index which fell 44.2 points (or 1.4%) in the week, this represented a relative price increase of 3.2%. The volume was 0.4 times average trading per week of 108.8 million shares. In the past week the market cap has risen CNY823.2 million (US$128.3 million).

SECTION 2: Technical indicators

Bullish:

In the Shanghai market, the stock's relative price strength percentile is improving at 63 for 6 months, 72 for 3 months and 88 for 1 month.

Fundamental measures by comparison with the sector average [in brackets] indicate:

Overvaluation:

Price to Book of 1.5 [1.3]

Return on Equity 3.9% [7.9%]

Return on Assets 1% [2.1%]

Note

The stock is at a discount of 39.9% to the 12-month high of CNY10.14 on 29 Jun, 2017. It is also at a premium of 6.5% to the 12-month low of CNY5.72 on 23 Apr, 2018.

Bearish:

The negative 0.03 MACD (Moving Average Convergence Divergence) indicator suggests a bearish signal (12-day minus 26-day Exponential Moving Averages). Both the 12-day and the 26-day EMA are falling - another bearish signal. In the past week, the stock's MACD has been negative every day, a reinforcing bearish signal.

In the last three months the stock has hit a new 52-week low four times, pointing to a downtrend.

The price decreased 1.0% in the last month.

The present value of CNY1,000 invested one year ago is CNY637 [vs CNY945 for the SSE Composite Index], for a capital loss of CNY363. The total return to shareholders for 1 year is -36.3%.

SECTION 3: Ranking

DescriptionValueRank In Market
MCap $US billion7.8In Top 8%
52-week Range (in CNY)5.7-10.1
1-month Range (in CNY)5.8-6.3
Today's Volatility %5.1In Bottom Quartile

SECTION 4: Earnings

FY2017 Annual Report: Founder Securities profits hit by 43.5% fall

Founder Securities (SS:601901) reported net profit for the year-ended 31 December 2017 of CNY1.5b ($US223m), down 43.5% from CNY2.6b ($US370m) in the previous year.

Major changes compared with previous year:

Favourable Changes:

- Debt to Equity down 27.8% from 2.1 to 1.5

- Long-term investments to Total Assets up from 64.3% to 66.1%

- Current Debtors to Total Assets up from 2.6% to 3%

- Other non-current assets to Total Assets up from 2% to 2.5%

- Net tangible assets per share up 6.7% from CNY3.73 (US53.8c) to CNY3.98 (US61c)

Unfavourable Changes:

- Net profit slumps 43.5% from CNY2.6b ($US370.1m) to CNY1.5b ($US222.9m)

- Total revenue down 20.9% from CNY8.4b ($US1.2b) to CNY6.7b ($US1.0b)

- EBIT Margin down from 37.5% to 28.3%

- EBIT to total assets down from 2.1% to 1.3%

- Operating Cash Flow is negative

- Sales and marketing expenses to Sales up from 51.5% to 59.7%

- Profit before tax to Sales down from 37.5% to 28.3%

- Total Liabilities to EBITDA of 53.5 compares unfavourably with the Joseph Piotroski benchmark of less than 5. This ratio has deteriorated by 54.2% from the previous year's ratio of 34.7.

Note:

- Tax expenses to Sales down from 6.9% to 6.5%

- Total liabilities to Total assets steady at 0.8

- Intangibles to Total Assets up from 3.1% to 3.2%

- Fixed Assets to Total Assets steady at 0.3%

SECTION 5: Recent News of Founder Securities

June 11: Founder Securities: Announcement on Resolutions of Annual General Meeting of 2017

The Company held the Annual General Meeting of 2017 on June 4, 2018, which discussed and approved issues including the proposal of "Annual Report of 2017", the proposal of "Profit Distribution Scheme of 2017" and the proposal of engaging auditor and auditor for internal control of 2018.

Source: Shanghai Stock Exchange

May 23: Founder Securities: Notice of Convening Annual General Meeting of 2017

The Company's directorate decided to hold the Annual General Meeting of 2017 at 14:00 on June 4, 2018 to discuss issues including the proposal of "Annual Report of 2017", the proposal of "Scheme of Profit Distribution for 2017" and the proposal of engagement of auditor and auditor for internal control in 2018.

May 23: Founder Securities announces AGM

Founder Securities has announced its Annual General Meeting will take place on Monday, June 04.

Founder Securities Co Ltd. (SS:601901; SHA:601901; CH:601901)

ISIN: CNE1000015Y8

PermID: 5035088370

Source: www.BuySellSignals.com