Chinney Alliance Group (0385.HK)

I’m looking at investing into this company.  I went through the financial statements and worked out the value ratios as follows (based on price $1.44 HKD)

PS - 0.19              (Top 4% of HK stock exchange)
PE – 4.08             (Top 4%)
PC – 4.4               (Top 4%)
PB – 0.61             (Top 13%)
Div – 4.17%        (Top 17%)
Ev/Ebitda – 0.36 according to Wall St Journal

These figures look remarkably strong.  I’m particularly encouraged by the Ev/Ebitda which I take very seriously when choosing.  This represents an extremely good leveraging/debt scenario.

The company looks like it has a board of directors with extremely strong experience – the chair has a number of positions on numerous other companies and strong experience.  Profits are well distributed between their companies.  The diversity of companies makes me feel confident.  5 major customers represent less than 30% of their clients.  Ethical outlook and environmental concern is encouraging.  And the company is worth £85m (UK pricing) which is not too small compared to other companies I typically invest in (this is my typical average size).  All looks rather good to me.

This would be my first investment in an Asian company and I am nervous about this.  I would love any thoughts from anyone with good experience in investing in Hong Kong.

The other companies under the same Chairman, Mr James Wong are :

Chinney Investments (00216.HK) - Controlling company /
Hon Kwok ( 00160.HK) - Property development
Chinney Kin Wing ( 01556.HK) - Foundation Piling ,

Chinney Alliance has good dividend record rising from 3 cents in 2012 to 6 cents in 2017.

Annual Dividend is announced around March so best time to buy the shares may be in January.

May I know which screener u all use to identify hk companies with potential? At least from financial ratios point of view.

Sent from my SM-N9005 using Tapatalk

Looks impressive over the last 5 years - steadily increasing dividend, positive cash flow every year (although highly variable), decent pile of cash.

https://markets.ft.com/data/equities/tea...?s=385:HKG

(14-08-2017, 07:52 AM)Life is a game Wrote: May I know which screener u all use to identify hk companies with potential? At least from financial ratios point of view.

Sent from my SM-N9005 using Tapatalk

Hey there. Well I live in the UK and using screeners is the cornerstone of my research.  I use a UK based one provided by the Financial Times which is our major UK financial newspaper. 

You can find it here: https://markets.ft.com/data/equities?exp...eener=true

You can choose your country and you can choose which variables you want to screen on this.

I warn you - be VERY careful with screeners.  I have found most of them to be bad.  There are lots of things to think about. 

1) Most importantly, many screens use stored information based on when each company's financial report was released.  Of course, if the share price has doubled since then, then all the stored information is COMPLETELY WRONG!! So check that it is updating its info as the share price moves. 

2) Look out for TTM.  This means that they have incorporated half-year results and quarterly results into their stats.  Many sites just use the annual returns.

After you have found a good screen and isolated a company you are interested in - you MUST MUST get hold of the annual report and work out the stats yourself to check they are accurate.  All screeners draw from info which occasionally contain mistakes.  YOU must work out the figures yourself to check what the figures are.  I have done this with the above figures. 

Hope that's helpful.  If you want any help in working out how to get the figures and ratios from the financial report just ask - I love doing those stats

(14-08-2017, 03:10 AM)soros Wrote: The other companies under the same Chairman, Mr James Wong are :

Chinney Investments  (00216.HK) -  Controlling company /
Hon Kwok ( 00160.HK) - Property development
Chinney Kin Wing ( 01556.HK) - Foundation Piling ,

Chinney Alliance has good dividend record rising from 3 cents in 2012 to 6 cents in 2017.  

Annual Dividend is announced around  March so best time to buy the shares  may be in January.

Yeah I think it looks good.  One slight concern is that I seem to remember the owner owns around 70% of the company (I'm happy to be corrected on this).  I'm not sure how bad this is really.  I once invested into Nord Gold with a similar situation - that went up 100% over the following month so I have good experience of this kind of situation    . I know people are complaining about Twitter because I think the owners own more than 50% of the shares and people don't like that the shareholders cannot over-rule the majority owners if they decide to do something that is not in the shareholders interest.  I guess its a slight risk, but then investing in a small company is a risk in its own right.  I am kinda trusting the owners know what they are doing and have proved themselves over previous years or I wouldn't be investing in the first place!  Some of the companies you mention above may be subsidiaries of Chinney Alliance - I noticed the owner (Mr Wong?) had interests in a lot of the subsidiaries.

I think all the companies are owned or controlled to the extent of over 70% by Mr James Wong.

If the dividend of Chinney Alliance keeps rising, you should be OK to buy in Jan

(13-08-2017, 12:24 AM)Supervalue Wrote: I’m looking at investing into this company.  I went through the financial statements and worked out the value ratios as follows (based on price $1.44 HKD)

PS - 0.19              (Top 4% of HK stock exchange)
PE – 4.08             (Top 4%)
PC – 4.4               (Top 4%)
PB – 0.61             (Top 13%)
Div – 4.17%        (Top 17%)
Ev/Ebitda – 0.36 according to Wall St Journal

These figures look remarkably strong.  I’m particularly encouraged by the Ev/Ebitda which I take very seriously when choosing.  This represents an extremely good leveraging/debt scenario.

The company looks like it has a board of directors with extremely strong experience – the chair has a number of positions on numerous other companies and strong experience.  Profits are well distributed between their companies.  The diversity of companies makes me feel confident.  5 major customers represent less than 30% of their clients.  Ethical outlook and environmental concern is encouraging.  And the company is worth £85m (UK pricing) which is not too small compared to other companies I typically invest in (this is my typical average size).  All looks rather good to me.

This would be my first investment in an Asian company and I am nervous about this.  I would love any thoughts from anyone with good experience in investing in Hong Kong.

I invested into this company too ... their operating track record is pretty good ... but have to say that the ROE in several years post 2008 GFC is not that great.

One danger that I can think of is the potential threat from contractor companies from mainland .. but I am not sure whether they compete head-to-head with Chinney Alliance (since mainland state-owned contractors are much bigger in size ... not sure if they are interested to bid smaller projects).

You might want to check into similar constructions/subcontactor companies too, like
China Railway Construction (1186.hk, much bigger size, state-owned) - PE 7x PBV 0.8x ROE about 11% Gearing about 30% (I am vested)
FSE Engineering (331.hk, recent IPO) - PE 6.7x ROE about 20% (I am vested)



===
I guess state-owned China Railway Construction company maybe a good start to invest in HK market, if you are not comfortable in investing in small caps in Asia ... its EPS has growned moderately, consistently over years ... but the ROE is not that great .. in the range of 10-11% over years..and PE-wise is higher. 


my 2 c

(21-11-2017, 11:10 AM)fundamentalman Wrote:

(13-08-2017, 12:24 AM)Supervalue Wrote: I’m looking at investing into this company.  I went through the financial statements and worked out the value ratios as follows (based on price $1.44 HKD)

PS - 0.19              (Top 4% of HK stock exchange)
PE – 4.08             (Top 4%)
PC – 4.4               (Top 4%)
PB – 0.61             (Top 13%)
Div – 4.17%        (Top 17%)
Ev/Ebitda – 0.36 according to Wall St Journal

These figures look remarkably strong.  I’m particularly encouraged by the Ev/Ebitda which I take very seriously when choosing.  This represents an extremely good leveraging/debt scenario.

The company looks like it has a board of directors with extremely strong experience – the chair has a number of positions on numerous other companies and strong experience.  Profits are well distributed between their companies.  The diversity of companies makes me feel confident.  5 major customers represent less than 30% of their clients.  Ethical outlook and environmental concern is encouraging.  And the company is worth £85m (UK pricing) which is not too small compared to other companies I typically invest in (this is my typical average size).  All looks rather good to me.

This would be my first investment in an Asian company and I am nervous about this.  I would love any thoughts from anyone with good experience in investing in Hong Kong.

I invested into this company too ... their operating track record is pretty good ... but have to say that the ROE in several years post 2008 GFC is not that great.

One danger that I can think of is the potential threat from contractor companies from mainland .. but I am not sure whether they compete head-to-head with Chinney Alliance (since mainland state-owned contractors are much bigger in size ... not sure if they are interested to bid smaller projects).

You might want to check into similar constructions/subcontactor companies too, like
China Railway Construction (1186.hk, much bigger size, state-owned) - PE 7x PBV 0.8x ROE about 11% Gearing about 30% (I am vested)
FSE Engineering (331.hk, recent IPO) - PE 6.7x ROE about 20% (I am vested)



===
I guess state-owned China Railway Construction company maybe a good start to invest in HK market, if you are not comfortable in investing in small caps in Asia ... its EPS has growned moderately, consistently over years ... but the ROE is not that great .. in the range of 10-11% over years..and PE-wise is higher. 


my 2 c

Thanks for your post Fundamentalism.  I'll take a look at the companies you have suggested     Right now I'm really concerned that Chinney's cashflow in their latest interim statement is  minus $80m compared to a positive $109m to the comparative period last year.  I would usually steer away from a company.  Any thoughts on this Fundamentalism - since you are also invested?  By the way I have also invested into Roadking which I am really happy with at the moment.

Sale of PRC assets :

http://www.hkexnews.hk/listedco/listcone...218905.pdf