Huangshan Tourism Development Co.,Ltd. engages in the tourism business in China. It is also involved in the hotel, Anhui cuisine catering, ropeways, travel agencies, and environmental sanitation and cleaning of scenic spots businesses. The company was founded in 1996 and is based in Huangshan, China.

China

Huangshan Tourism Development Co.,Ltd.

Consumer Cyclical

The company pays dividends from time to time. It has paid dividends in less than half the past ten years. Dividend per share (DPS) has grown yearly, but the dynamics are unclear. In the past 12 months, the dividend yield has barely been above zero and was substantially below that of its peers. 

600054.SS reported revenue of CNY 1 991mn in the last 12 months, up 3% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 4% from FY24 to CNY 0.45. Market expects EPS to reach CNY 0.42 in FY25.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 3ppts over past six months and grown 7ppts slower in the past month. At the same time, the stock's performance relative to its the peers from the same country and sector is different. It underperformed these peers by 7ppts over six months and grew 12ppts slower in the past month. With respect to the stock's valuation against its peers, its overall price performance is neutral.

The company has reported good EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to 30.3% in the last 12 months, a decline from 47.6% in FY23. 

Historically, 600054.SS has reported good net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 16.4%, down from 22.0% in FY23. 

Huangshan Tourism Development Co.,Ltd. reported a return on equity (RoE) of 7.1% in the last 12 months, down from 9.9% in FY23. The market consensus projects an RoE of 6.8% in FY24, again behind its peers. 

Another important profitability metric, return on assets (RoA), amounted to 5.7% in the last 12 months, a decrease from 7.8% in FY23. The market analysts predict that RoA will be 5.4% in FY24, though below its peers in this period. 

In the last 12 months, the return on capital employed (RoCE) declined to 6.4%, below the peers. The consensus estimate for FY24 for RoCE is 9.6%, again behind the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 1.1 in the past several years. This ratio implies a average shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are close to minimal. In combination with rigorous business standards, shareholder rights are well protected.

600054.SS has above average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is usually quite stable and remains extremely favourable on the days with the lowest activity. However, please consider that under highly turbulent market conditions, the trading volume tends to decrease significantly. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note resilient historical revenue growth, robust profitability, strong debt servicing capacity, adequate interest coverage, solid cash flow generation, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to weak positions in its industry, negligible return on capital, and excessive margin volatility.

In highly turbulent market conditions, 600054.SS is not overly volatile. In other words, the stock will fall less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be low. 

In normal market circumstances, 600054.SS is as volatile as an index. Put differently, without outstanding market volatility or shocking company news, the stock's price will move with the index. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to negligible. We would also like to highlight the negligible intraday volatility of the instrument. 

Considering past and projected metrics, the stock is neither 'expensive' nor 'cheap' compared to its peers. Specifically, the stock is fairly valued on P/E, neutral on EV/EBITDA, overpriced on P/FCF. 

Huangshan Tourism Development Co.,Ltd.

CN¥ 11.49

4

Huangshan Tourism Development Co.,Ltd.

CN¥ 11.49

4

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

CN¥ 11.49

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