Shanghai stock report - China Southern Airlines - A Share

CHINA

China Southern Airlines - A Share keeps rising, up 4.4% in 3 days September 20, 2018 15:30 CST

NEWS BITES - BRIC

China Southern Airlines Limited - A Share (SS:600029), Shanghai's 3rd largest Airline company by market cap, extended its gains on Thursday, rising an additional 2.0 fen (0.3%) to close at CNY6.47. The shares have climbed 27.0 fen (4.4%) over the past three trading days, compared with the SSE Composite Index which rose 77.5 points (2.9%) in the three days for a relative price increase of 1.4%. Cumulative volume in the 3 days was 0.7 times the average 3-day volume of 93.4 million shares. Its MCap is CNY65.3 billion (US$9.5 billion).

Highlights in today's Report:

SECTION 1 BULLISH SIGNALS

SECTION 2 BEARISH SIGNALS

SECTION 3 PRICE VOLUME DYNAMICS

SECTION 4 RELATED NEWS

SECTION 5 SUMMARY FINANCIALS

SECTION 6 PROFILE

SECTION 1 CHINA SOUTHERN AIRLINES - A SHARE BULLISH SIGNALS

1.1 Technicals:

+ The present value of CNY1,000 (PV1000) invested ten years ago in China Southern Airlines - A Share is CNY2,114, including a capital gain of CNY956 and dividend reinvested of CNY159.

+ 10 years Multiplier in CNY = 2.114x

+ Compound Annual Growth Rate (CAGR) in CNY = 7.8%

Present Value of USD1,000 invested 10 years ago:

+ The present value of USD1,000 (PV1000) invested ten years ago in China Southern Airlines - A Share is $US2,104, including a capital gain of $US946 and dividend reinvested of $US158.

+ 10 years ago USD 1 equalled CNY 6.8166

+ 10 years Multiplier in USD = 2.104x

+ Compound Annual Growth Rate (CAGR) in USD = 7.7%

Sep 20, 2018: USD 1 equals CNY 6.85

High Performance Indicators and rank of China Southern Airlines - A Share in the Shanghai market:

DescriptionValueRank In Market
Today's Trading TurnoverCNY316 million (US$46.1 million)In Top 3%
Volatility %1.1In Top Quartile
Price Change %0.3In Top Quartile

1.2 Fundamentals:

+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.3. Compared with the rest of the market the stock is undervalued and ranks in the top quartile of stock by value of Q Ratio.

+ Brandirectory have estimated China Southern Airlines - A Share's brand value at CNY18.9 billion (US$2.8 billion). The Brand Value represents an impressive 10.1% of the estimated Enterprise Value of CNY186.2 billion (US$27.2 billion).

+ As per the Du Pont analysis, Return on Equity [ROE] of 11.1% is better than sector average of 8.5%. ROE is computed as net profit margin of 5.1% times asset turnover [sales/assets] of 0.57 times leverage factor [total assets/shareholders' equity] of 4.6.

Quarterly Trend in Revenue and Net Profit Margin:

+ Revenue growth has shown signs of recovery in recent quarters. [All figures in %]

Qtr-endedRevenue GrowthNet Profit Margin
Mar 18 [Q1]8.7-
Dec 17 [Q4]-12.4-4.4

1.3 Undervaluation [compared with sector average]:

+ Return on Equity 11.1% [8.5%].

+ Return on Assets 2.9% [2.3%].

+ Return on Capital Employed 5.8% [5.2%].

SECTION 2 CHINA SOUTHERN AIRLINES - A SHARE BEARISH SIGNALS

2.1 Technicals:

+ The price decreased 2.0% in the last month.

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

+ The 5.0% premium to 12-month low of CNY6.16 against the 49.4% discount to high of CNY12.78 suggests the stock continues to push for new lows.

+ The present value of CNY1,000 (PV1000) invested one year ago in China Southern Airlines - A Share is CNY782, comprising a capital loss of CNY229 and dividend reinvested of CNY10.

PV10001-week1-month1-year
600029.SS1,019980782
SSE Composite Index1,016986811

Low Performance Indicator and rank of China Southern Airlines - A Share in the Shanghai market:

DescriptionValueRank In Market
Price/MAP2000.68In Bottom 8%

2.2 Fundamentals:

+ The relative yield of China Southern Airlines - A Share, defined by its yield of 1.6%, divided by average yield of dividend yielding stocks in the SSE Composite Index of 2.5% is 61.5%. This suggests China Southern Airlines - A Share stock is overvalued in dividend yield terms.

+ Total Liabilities/EBITDA of 19.9 which compares unfavourably with the Joseph Piotroski benchmark of 5.

+ Net profit margin has averaged 3.9% in the last 3 years. This suggests the company is less profitable with a low margin of safety.

2.3 Overvaluation [compared with sector average]:

+ Price to Book of 1.6 [1.1].

SECTION 3 CHINA SOUTHERN AIRLINES - A SHARE PRICE VOLUME DYNAMICS

3.1 Momentum:

+ Volume: there were 48,840,000 shares worth CNY316 million (US$46.1 million) traded today. In the past week, volume was 0.5 times average and the shares were up 1.9%. The volume was 0.5 times the average daily trading volume of 93.4 million shares.

Moving Annual Return (Past 5 years)

Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 3 out of 5 years.

SS:600029Close (CNY)Dividends (CNY)Capital Gain / (Loss) %% YieldAnnual Return %
Sep 206.470.1(22.9)1.2(21.7)
1 Yr ago8.390.1211.422.5
2 Yrs ago6.930.08(4.6)1.1(3.5)
3 Yrs ago7.270.04159.11.4160.5
4 Yrs ago2.80.040.61.42.0

Close 5 years ago CNY2.79

3.2 Year-To-Date

+ China Southern Airlines Limited - A Share (SS:600029), crashed CNY4.78 (or 42.5%) year-to-date (YTD) in 2018 to close at CNY6.47 today. This makes the stock the hundred-eighty-first lowest performer in the SSE Composite Index which is down 17.5% in 2018. This also indicates a relative price change of -25%.

SECTION 4 CHINA SOUTHERN AIRLINES - A SHARE RELATED NEWS

Other News

+ BSS/News Bites:

China Southern Airlines Limited - A Share is placed 311/1300 in BSS News Bites' ranking of Shanghai performers in the past year, a percentile ranking of 76.

SECTION 5 CHINA SOUTHERN AIRLINES - A SHARE SUMMARY FINANCIALS

5.1 Dividend History

+ Trailing 12 months dividend has improved from 4.0 fen in 2014 to 10.0 fen in 2018.

5.2 Financials Summary (Past 3 years)

Year endedDec 2016Dec 2015Dec 2014
Sales (USD B)16.816.916.3
Pretax (USD)1.1B893.2M447.6M
Net (USD M)738545.5259.4
EPS (CNY)-0.380.18

+ Sales were down 0.8% from US$16.9 billion in 2015 to US$16.8 billion in 2016.

+ Net profit was up 35.3% from US$545.5 million in 2015 to US$738 million in 2016.

SECTION 6 CHINA SOUTHERN AIRLINES - A SHARE PROFILE

6.1 Activities

China Southern Airlines Company provides commercial airline services throughout China, Hong Kong and Macau regions, Southeast Asia and other parts of the world. The Company conducts a portion of its airline operations through its airline subsidiaries, including Xiamen Airlines, Southern Airlines (Group) Shantou Airlines Company Limited (Shantou Airlines), Zhuhai Airlines Company Limited (Zhuhai Airlines), Guizhou Airlines Company Limited (Guizhou Airlines) and Chongqing Airlines (collectively, the Airline Subsidiaries).

6.2 Issued Capital

Based on 10,088,170,000 issued shares the market capitalisation is CNY65.3 billion (US$9.5 billion).

COMPANY IDENTIFIERS

Contact: 86-20-86124736

Physical Address: 278 Ji Chang Road Guangzhou, Guangdong, 510405 China

State/Province/Country: GNG, China

Country of Incorporation: China

Exchange: Shanghai Stock Exchange (SSE)

Economic Sector: Industrials

Business Sector: Transportation

Industry Group: Passenger Transportation Services

Industry: Airlines

ISIN: CNE000001FG0

SS:600029; SHA:600029; CH:600029; 600029.SS

PermID: 4295864276

RIC: 600029.SS

China Southern Airlines Co Ltd

Source: www.BuySellSignals.com