Shanghai stock report - China Southern Airlines - A Share

CHINA

China Southern Airlines - A Share rises for a second consecutive day, a two-day rise of 1.4% January 19, 2018 15:30 CST

NEWS BITES - BRIC

China Southern Airlines Limited - A Share (SS:600029), Shanghai's 3rd largest Airline company by market cap, has risen 5.0 fen (0.5%) for a second consecutive day on Friday. This brought its two-day rise to 15.0 fen (1.4%), compared with the SSE 180 Index which rose 110.5 points (1.2%) in the two days for a relative price increase of 0.2%. The 2-day rise was fuelled by a cumulative volume of 2.8 times the average 2-day volume of 73.4 million shares. The stock last traded at CNY10.59.

Highlights in today's Report:

SECTION 1 BULLISH SIGNALS

Fundamentals, Undervaluation [compared with sector average], Technicals, Oversold/Bullish/Support Signals, High Performance Indicators, A positive finish to 2017

SECTION 2 BEARISH SIGNALS

Fundamentals, Overvaluation [compared with sector average], Low Performance Indicators

SECTION 3 PRICE VOLUME DYNAMICS

Technicals, Moving Annual Return, Turnover Rate & Turnover Period

SECTION 4 RANKING

Global, Independent Rating

SECTION 5 FINANCIALS

Financials Summary, Trailing 12 Months Dividends

SECTION 6 PROFILE

Activities, Industry & Sector, Issued Capital

SECTION 7 STOCK BUZZ

SECTION 1 CHINA SOUTHERN AIRLINES - A SHARE BULLISH SIGNALS

1.1 Fundamentals:

+ 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 brand value at CNY17.6 billion (US$2.8 billion). The Brand Value represents 7.7% of the estimated Enterprise Value of CNY227.8 billion (US$35.6 billion).

+ As per the Du Pont analysis, Return on Equity of 11.1% is better than sector average of 7.3%. 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.

+ Net Profit margin is positive and has seen consecutive rises in recent quarters. [Quarter ended, all figures in %]

QtrRevenue GrowthNet Profit GrowthNet Profit Margin
Sep 1722251.614
Jun 17-5.2-21.44.6

1.2 Undervaluation [compared with sector average]:

+ Return on Equity 11.1% [7.3%].

+ Return on Assets 2.9% [2.5%].

+ Return on Capital Employed 5.8% [4.9%].

+ Dividend yield of 0.9% [0.8%].

1.3 Technicals:

+ In the last three months the stock has hit a new 52-week high fourteen times, pointing to a significant uptrend.

+ The present value of CNY1,000 (PV1000) invested one year ago in China Southern Airlines - A Share is CNY1,494, comprising a capital gain of CNY476 and dividend reinvested of CNY18.

PV10001-week1-month1-year
600029.SS9429371,494
SSE 180 Index1,0221,0721,259

+ The present value of CNY1,000 (PV1000) invested five years ago in China Southern Airlines - A Share is CNY2,866, including a capital gain of CNY1,690 and dividend reinvested of CNY176.

+ 5 years Multiplier in CNY = 2.866x

+ Compound Annual Growth Rate (CAGR) in CNY = 23.4%

Present Value of USD1,000 invested 5 years ago:

+ The present value of USD1,000 (PV1000) invested five years ago in China Southern Airlines - A Share is $US2,785, including a capital gain of $US1,614 and dividend reinvested of $US171.

+ 5 years ago USD 1 equalled CNY 6.2189

+ 5 years Multiplier in USD = 2.785x

+ Compound Annual Growth Rate (CAGR) in USD = 22.7%

Jan 19, 2018: USD 1 equals CNY 6.4

1.4 Oversold/Bullish/Support Signals:

+ The stock is oversold according to the Williams % R indicator of -83.7, suggesting the price is close to its 14-day low of CNY10.29.

+ The Stochastic indicator of 12.7 has pierced the oversold line of 20; this indicates the price is close to its 14-day low and is likely to revert to an uptrend.

1.5 High Performance Indicators:

DescriptionValueRank In Market
Price/MAP2001.15In Top 8%
Today's TurnoverCNY3 billion (US$464.9 million)In Top 9%
Price to Sales0.9In Top Quartile

1.6 A positive finish to 2017

The stock has soared 71.9% in FY 2017 to close at CNY11.92. The % rise exceeded the % gain in the stock in each of the two preceding financial years. The average daily volume of 71.3 million shares in FY 2017 was 0.9 times the average daily volume in FY 2016.

SECTION 2 CHINA SOUTHERN AIRLINES - A SHARE BEARISH SIGNALS

2.1 Fundamentals:

+ The relative yield of the stock, defined by its yield of 0.9%, divided by average yield of dividend yielding stocks in the SSE 180 Index of 2.2% is 41.8%. This suggests the 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 Indicators:

DescriptionValueRank In Market
Total Debt to Equity2.5In Bottom 5%
Volatility %6.1In Bottom 7%

SECTION 3 PRICE VOLUME DYNAMICS

3.1 Technicals:

+ Volume: there were 280,860,000 shares worth CNY3 billion (US$464.9 million) traded today. In the past week, volume was 2.5 times average and the shares were down 5.8%. The rise has been propped up by extraordinary volume of 3.8 times the average daily volume of 73.4 million shares.

+ China Southern Airlines - A Share is at a discount of 14.9% to its 12-month high of CNY12.45 on December 26, 2017. It is also at a premium of 50.5% to the 12-month low of CNY7.03 on February 06, 2017.

3.2 Moving Annual Return

Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 4 of the last 5 years. An investment a year ago in 600029 would have produced a return of 49.0%.

600029Close (CNY)Dividends (CNY)Capital Gain / (Loss) %% YieldAnnual Return %
Jan 1910.590.147.61.449.0
1 Yr ago7.170.081.41.12.6
2 Yrs ago7.070.04340.834.8
3 Yrs ago5.280.04114.31.6115.9
4 Yrs ago2.460.05(37.5)1.3(36.2)

Close 5 years ago CNY3.94

3.3 Turnover Rate & Turnover Period:

+ The turnover rate in the 12 months to date was 150.7% (or a turnover period of 7 months). This average length of ownership of the stock at 0.5 times the average holding period of 1 year 3 months for stocks in the SSE 180 Index suggests a larger number of speculators on the share register, making it less safe for long-term investors.

SECTION 4 RANKING

4.1 Global Rank [out of 47,418 stocks] and Rank in the Asia Region [out of 22,530 stocks]

DescriptionValueGlobal RankIn Asia Region
MCap (US$)16.7B964287
Total Assets (US$)31.1B1,237392
Revenue (US$)17.8B795225
Net Profit (US$)785.2M1,249357
Return on Equity %11.111,7636,247
Net Profit Margin %5.117,7749,853
Price to Book2.722,07012,778
Yield %0.916,9398,350
PV$1000 (1Year) US$*1,6018,1724,164
US$* Change (1Year) %55.87,9564,062

* 1 year ago USD 1 = CNY 6.84

Jan 19, 2018: USD 1 equals CNY 6.4

4.2 Independent Rating

+ Forbes 2000:

China Southern Airlines Limited - A Share is the 544th largest by revenue in the Forbes Global 2000.

+ BSS/News Bites:

It is placed 73/1071 in BSS News Bites' ranking of Shanghai performers in the past year, a percentile ranking of 93.

SECTION 5 CHINA SOUTHERN AIRLINES - A SHARE FINANCIALS

5.1 Financials Summary

Year endedDec 2016Dec 2015Dec 2014
Sales (USD B)17.717.917.2
Pretax (USD)1.2B943.5M472.8M
Net (USD M)779.6576.2274.1
EPS (CNY)-0.380.18

Sales was down 0.8% from US$17.9 billion in 2015 to US$17.7 billion in 2016. Net profit was up 35.3% from US$576.2 million in 2015 to US$779.6 million in 2016.

5.2 Trailing 12 Months Dividends

Trailing 12 Months ToValue (fen)
19 Jan 201810
19 Jan 20178
19 Jan 20164
19 Jan 20154
19 Jan 20145

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 Industry & Sector

Classification LevelName of Sector
Business SectorTransportation
Industry GroupPassenger Transportation Services
IndustryAirlines
Economic SectorIndustrials

6.3 Issued Capital

Based on 10,088,170,000 issued shares the market capitalisation is CNY106.8 billion (US$16.7 billion).

SECTION 7 STOCK BUZZ

Corporate Wire

To view Recent Company Headlines, click here

December 27 2017: China Southern Airlines - A Share: Announcement on Resolutions of 1st Session of 8th Directorate Meeting

The Company held the 1st session of the 8th directorate meeting on December 20, 2017, which discussed and approved issues including the "Proposal of Electing Chair and Vice Chair of 8th Directorate", the proposal of renewing engagement of senior management members and the proposal of bank credit loan financing plan of 2018.

December 26 2017: China Southern Airlines - A Share: Announcement on Resolutions of 2nd Special Shareholders' Meeting of 2017

The Company held the 2nd special Shareholders' Meeting of 2017 on December 20, 2017, which discussed and approved issues including the issue of signing the "Framework Agreement on Financing and Leasing Services" with China Southern Airlines International Financing Lease Co., Ltd., the proposal of electing executive directors of the 8th directorate and the proposal of electing independent non-executive directors of the 8th directorate.

November 27 2017: China Southern Airlines - A Share: Announcement on Resolutions of Directorate Meeting

On November 23, 2017, the Company's 7th directorate unanimously approved the "Remuneration Standard of RMB150,000 before Tax per Non-executive Independent Director of 8th Directorate per Year or Implementing according to Relevant National Policies and Approval of Requesting Shareholders' Meeting for Discussion", the "Nomination of Wang Changshun, Tan Wangeng and Zhang Zifang as Candidates for Executive Directors of 8th Directorate and Approval of Requesting Shareholders' Meeting for Discussion" and the "Nomination of Zheng Fan, Gu Huizhong, Tan Jinsong and Jiao Shuge as Candidates for Non-executive Independent Directors of 8th Directorate and Approval of Requesting Shareholders' Meeting for Discussion" by way of signatures of directors for approval.

November 16 2017: China Southern Airlines - A Share: Announcement on Interest Payment of Phase I Corporate Bonds of 2015 in 2017

The interest of the Company's phase I corporate bonds of 2015 (with the short description of "15 China Southern Airlines 01") accruing from November 20, 2016 to November 19, 2017 will be paid from November 20, 2017.

Record date: November 17, 2017

Interest payable date: November 20, 2017

November 13 2017: China Southern Airlines - A Share: Announcement on Resolution of Directorate Meeting

The Company held the special meeting of the 7th directorate on November 9, 2017, which discussed and approved the "Audit Report of Zhuhai Free Trade Zone MTU Aero Engine Maintenance Co., Ltd. in 2016 and from January to August 2017" (Zhi Tong Shen Zi (2017) No. 441ZA6651) issued by Grant Thornton Accounting Firm (Special Ordinary Partnership).

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)

ISIN: CNE000001FG0

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

PermID: 4295864276

China Southern Airlines Co Ltd

Source: www.BuySellSignals.com