Shanghai stock report - China Southern Airlines - A Share
China Southern Airlines - A Share in 4th consecutive rise, nears four-month high June 15, 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 Friday, rising an additional 9.0 fen (0.8%) to trade at CNY10.85. China Southern Airlines - A Share's stock increased 0.4% on Wednesday and 0.7% on Thursday. This brought its 4-day rise to 3.4%, compared with the SSE Composite Index which fell 29.4 points (1.0%) in the four days for a relative price increase of 4.4%. Cumulative volume in the 4 days was 0.8 times the average 4-day volume of 89.7 million shares. China Southern Airlines - A Share's stock is now approaching its 87-day high of CNY11.14.
Highlights in today's Report:
SECTION 1 BULLISH SIGNALS
SECTION 2 BEARISH SIGNALS
SECTION 3 PRICE VOLUME DYNAMICS
SECTION 4 RELATED NEWS
SECTION 5 GLOBAL RANKING
SECTION 6 SUMMARY FINANCIALS
SECTION 7 PROFILE
SECTION 1 CHINA SOUTHERN AIRLINES - A SHARE BULLISH SIGNALS
+ Tobin's Q Ratio, defined as MCap divided by Total Assets, is 0.5. 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 CNY17.7 billion (US$2.8 billion). The Brand Value represents 7.7% of the estimated Enterprise Value of CNY230.4 billion (US$35.9 billion).
+ As per the Du Pont analysis, Return on Equity of 11.1% is better than sector average of 7.9%. This 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.
1.2 Undervaluation [compared with sector average]:
+ Return on Equity 11.1% [7.9%].
+ Return on Assets 2.9% [2.5%].
+ Return on Capital Employed 5.8% [5.2%].
+ Dividend yield of 0.9% [0.7%].
Uptrend: The stock rose on high volatility today and expanding price range.
+ The price lifted 3.2% in the last week and increased 1.2% in the last month.
+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 10.55 minus the 26-day EMA of 10.43 is positive 0.12 suggesting a bullish signal. Both EMA prices are rising, another bullish signal.
+ Rises to Falls: in the past month the number of rises outnumbered falls 15:9 or 1.7:1.
+ The present value of CNY1,000 (PV1000) invested one year ago in China Southern Airlines - A Share is CNY1,253, comprising a capital gain of CNY238 and dividend reinvested of CNY15.
|SSE Composite Index||987||958||965|
+ The present value of CNY1,000 (PV1000) invested ten years ago in China Southern Airlines - A Share is CNY1,487, including a capital gain of CNY336 and dividend reinvested of CNY152.
+ 10 years Multiplier in CNY = 1.487x
+ Compound Annual Growth Rate (CAGR) in CNY = 4.0%
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 $US1,598, including a capital gain of $US435 and dividend reinvested of $US163.
+ 10 years ago USD 1 equalled CNY 6.8918
+ 10 years Multiplier in USD = 1.598x
+ Compound Annual Growth Rate (CAGR) in USD = 4.8%
Jun 15, 2018: USD 1 equals CNY 6.41
1.4 High Performance Indicators:
|Description||Value||Rank In Market|
|Today's Turnover||CNY870.3 million (US$135.7 million)||In Top 3%|
|Price/MAP50||1.06||In Top 8%|
|Price/MAP200||1.06||In Top Quartile|
|Price Change %||0.8||In Top Quartile|
|Price to Sales||0.9||In Top Quartile|
SECTION 2 CHINA SOUTHERN AIRLINES - A SHARE BEARISH SIGNALS
+ The relative yield of China Southern Airlines - A Share, defined by its yield of 0.9%, divided by average yield of dividend yielding stocks in the SSE Composite Index of 2.4% is 39.0%. 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.
2.2 Overvaluation [compared with sector average]:
+ Price to Book of 2.7 [1.7].
2.3 Low Performance Indicator:
|Description||Value||Rank In Market|
|Total Debt to Equity||2.5||In Bottom 6%|
SECTION 3 CHINA SOUTHERN AIRLINES - A SHARE PRICE VOLUME DYNAMICS
+ Volume: there were 80,210,000 shares worth CNY870.3 million (US$135.7 million) traded today. In the past week, volume was 0.7 times average and the shares were up 3.2%. The volume was 0.9 times the average daily trading volume of 89.7 million shares.
+ China Southern Airlines - A Share is at a discount of 16.2% to its 12-month high of CNY12.95 on February 07. It is also at a premium of 38.2% to the 12-month low of CNY7.85 on August 09, 2017.
3.2 Moving Annual Return
Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 3 of the last 5 years. An investment a year ago in China Southern Airlines - A Share would have produced a return of 25.0%.
|SS:600029||Close (CNY)||Dividends (CNY)||Capital Gain / (Loss) %||% Yield||Annual Return %|
|1 Yr ago||8.76||0.08||30.6||1.2||31.8|
|2 Yrs ago||6.71||0.04||(44.5)||0.3||(44.2)|
|3 Yrs ago||12.09||0.04||441.7||1.8||443.5|
|4 Yrs ago||2.23||0.05||(29.6)||1.6||(28.0)|
Close 5 years ago CNY3.17
3.3 Turnover Rate & Turnover Period:
+ The turnover rate in the 12 months to date was 180.1% (or a turnover period of 6 months). This average length of ownership of the stock at 0.8 times the average holding period of 7 months for stocks in the SSE Composite Index suggests a larger number of speculators on the share register, making it less safe for long-term investors.
3.4 The Past Year
+ China Southern Airlines Limited - A Share (SS:600029), climbed CNY2.09 (or 23.8%) in the past year to close at CNY10.85 today. The stock is trading at a Price/NTA of 2.7 times, which is 4th lowest in the Airlines sector.
SECTION 4 CHINA SOUTHERN AIRLINES - A SHARE RELATED NEWS
+ BSS/News Bites:
China Southern Airlines Limited - A Share is placed 114/1197 in BSS News Bites' ranking of Shanghai performers in the past year, a percentile ranking of 91.
SECTION 5 CHINA SOUTHERN AIRLINES - A SHARE GLOBAL RANKING
Global Rank [out of 47,575 stocks] and Rank in the Asia Region [out of 22,828 stocks]
|Description||Value||Global Rank||In Asia Region|
|Total Assets (US$)||31.2B||1,272||409|
|Net Profit (US$)||788M||1,349||386|
|Return on Equity %||11.1||12,100||6,388|
|Net Profit Margin %||5.1||18,075||10,003|
|Price to Book||2.7||24,142||14,268|
|PV$1000 (1Year) US$*||1,329||8,316||3,959|
|US$* Change (1Year) %||31.4||7,989||3,824|
* 1 year ago USD 1 = CNY 6.79
Jun 15, 2018: USD 1 equals CNY 6.41
SECTION 6 CHINA SOUTHERN AIRLINES - A SHARE SUMMARY FINANCIALS
6.1 Dividend History
+ Trailing 12 months dividend has improved from 5.0 fen in 2014 to 10.0 fen in 2018.
6.2 Financials Summary
|Year ended||Dec 2016||Dec 2015||Dec 2014|
|Sales (USD B)||17.9||18.1||17.4|
|Net (USD M)||789.4||583.4||277.5|
+ Sales were down 0.8% from US$18.1 billion in 2015 to US$17.9 billion in 2016.
+ Net profit was up 35.3% from US$583.4 million in 2015 to US$789.4 million in 2016.
SECTION 7 CHINA SOUTHERN AIRLINES - A SHARE PROFILE
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).
7.2 Issued Capital
Based on 10,088,170,000 issued shares the market capitalisation is CNY109.5 billion (US$17.1 billion).
Physical Address: 278 Ji Chang Road Guangzhou, Guangdong, 510405 China
State/Province/Country: GNG, China
Country of Incorporation: China
Exchange: Shanghai Stock Exchange (SSE)
Business Sector: Transportation
Industry Group: Passenger Transportation Services
Economic Sector: Industrials
SS:600029; SHA:600029; CH:600029; 600029.SS
China Southern Airlines Co Ltd