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Hangzhou Jiebai Group Co., Ltd. : Neutral outlook but great fundamentals

Hangzhou Jiebai Group Co., Ltd. relative valuation is now NEUTRAL. It was previously rated UNDERVALUED, and has a fundamental analysis score of 88.

Our analysis is based on comparing Hangzhou Jiebai Group Co., Ltd. with the following peers – Lanzhou Minbai Shareholding (Group) Co., Ltd. Class A, Fujian Dongbai (Group) Co., Ltd. Class A, Dashang Co., Ltd. Class A, Baida Group Co., Ltd. Class A, Kunming Sinobright (Group) Co., Ltd. Class A, Shanghai New World Co., Ltd. Class A and Wuhan Hanshang Group Co., Ltd. Class A (600738-CN, 600693-CN, 600694-CN, 600865-CN, 000560-CN, 600628-CN and 600774-CN).

Relative Valuation

Hangzhou Jiebai Group Co., Ltd. is currently neutrally valued, as its previous close of CNY 12.61 lies within the CapitalCube estimate range of CNY 12.51 to CNY 18.82. Over the last 52 week period, Hangzhou Jiebai Group Co., Ltd. has fluctuated between CNY 7.23 and CNY 20.56.

Company Overview

  • Taking peer performance into consideration, relative performance over the last month and last year is around the peer median.
  • Hangzhou Jiebai Group Co., Ltd. Class A’s current Price/Book of 3.50 is about median in its peer group.
  • 600814-CN‘s operating performance is relatively good compared to its peers. The market currently does not expect high earnings growth relative to its peers but seems to expect the company to maintain its relatively high rates of return.
  • 600814-CN‘s median net profit margins and relatively high asset efficiency give it some operating leverage.
  • The company’s year-on-year change in revenues and earnings are better than the median among its peer group.
  • 600814-CN‘s return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable.
  • The company’s relatively high pre-tax margin suggests tight control on operating costs versus peers.
  • While 600814-CN‘s revenues in recent years have grown faster than the peer median, the market gives the stock a P/E ratio that is around peer median suggesting that the market has some questions about the company’s long-term strategy.
  • The company’s level of capital investment seems appropriate to support the company’s growth.

Investment Outlook

Hangzhou Jiebai Group Co., Ltd. has a fundamental score of 88 and has a relative valuation of NEUTRAL.

Hangzhou Jiebai Group Co., Ltd. is on the top left quadrant of the CapitalCube Value – Price Matrix. We classify this space a ‘Value Play’. Here, Hangzhou Jiebai Group Co., Ltd. is potentially undervalued, since it trades below its CapitalCube Implied Price of 15.66. At the same time, Hangzhou Jiebai Group Co., Ltd. is also fundamentally strong with a score of 88. This is a classic value stock definition.

Quadrant label definitions. Hover to know more

Safety, Value Play, Value Trap, Speculative

Drivers of Valuation

The market seems to expect 600814-CN to maintain its relatively high returns.

600814-CN‘s operating performance is higher than the median of its chosen peers (ROE of 13.63% compared to the peer median ROE of 9.02%) but the market does not seem to expect higher growth relative to peers (P/E of 38.91 compared to peer median of 44.77) but simply to maintain its relatively high rates of return.

The company’s current Price/Book of 3.50 is about median in its peer group.

Quadrant label definitions. Hover to know more

Outperforming, Harvesting, Challenged, Turnaround

600814-CN has maintained its relatively high ROE profile from the recent year-end.

Peer Analysis

A complete list of valuation metrics is available on the company page.

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Company Profile

Hangzhou Jiebai Group Co., Ltd. is engaged in the retail and wholesale of general merchandise. The company retails gold and silver jewelry, cigarette, books and periodicals, magazine, calligraphy and painting. Its other activities include operations of hotel, tourism, import/export, advertisement, music teahouse, swimming pool, rental of bicycle and film development and provisions of etiquette services, public relationship strategies and repair of daily appliances. The company was founded in 1918 and is headquartered in Hangzhou, China.

Disclaimer

The information presented in this report has been obtained from sources deemed to be reliable, but AnalytixInsight does not make any representation about the accuracy, completeness, or timeliness of this information. This report was produced by AnalytixInsight for informational purposes only and nothing contained herein should be construed as an offer to buy or sell or as a solicitation of an offer to buy or sell any security or derivative instrument. This report is current only as of the date that it was published and the opinions, estimates, ratings and other information may change without notice or publication. Past performance is no guarantee of future results. Prior to making an investment or other financial decision, please consult with your financial, legal and tax advisors. AnalytixInsight shall not be liable for any party’s use of this report. AnalytixInsight is not a broker-dealer and does not buy, sell, maintain a position, or make a market in any security referred to herein. One of the principal tenets for us at AnalytixInsight is that the best person to handle your finances is you. By your use of our services or by reading any our reports, you’re agreeing that you bear responsibility for your own investment research and investment decisions. You also agree that AnalytixInsight, its directors, its employees, and its agents will not be liable for any investment decision made or action taken by you and others based on news, information, opinion, or any other material generated by us and/or published through our services. For a complete copy of our disclaimer, please visit our website www.analytixinsight.com.

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