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Sinosoft Technology Group

SEHK:1297
Snowflake Description

Very undervalued with excellent balance sheet.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
1297
SEHK
HK$2B
Market Cap
  1. Home
  2. HK
  3. Software
Company description

Sinosoft Technology Group Limited, an investment holding company, primarily provides software development and system integration services in the People's Republic of China. The last earnings update was 75 days ago. More info.


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  • Sinosoft Technology Group has significant price volatility in the past 3 months.
1297 Share Price and Events
7 Day Returns
2.8%
SEHK:1297
2%
HK Software
0.9%
HK Market
1 Year Returns
-28%
SEHK:1297
0.5%
HK Software
-1.5%
HK Market
1297 Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Sinosoft Technology Group (1297) 2.8% -6.3% -23.6% -28% -55.4% -45.3%
HK Software 2% -8.1% -4.6% 0.5% 9.7% -1.6%
HK Market 0.9% -4.2% -0.2% -1.5% 5.4% -2.2%
1 Year Return vs Industry and Market
  • 1297 underperformed the Software industry which returned 0.5% over the past year.
  • 1297 underperformed the Market in Hong Kong which returned -1.5% over the past year.
Price Volatility
1297
Industry
5yr Volatility vs Market

Value

 Is Sinosoft Technology Group undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Sinosoft Technology Group to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Sinosoft Technology Group.

SEHK:1297 Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 3 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 8.5%
Perpetual Growth Rate 10-Year HK Government Bond Rate 1.6%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for SEHK:1297
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year HK Govt Bond Rate 1.6%
Equity Risk Premium S&P Global 6.3%
Software Unlevered Beta Simply Wall St/ S&P Global 1.13
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 1.129 (1 + (1- 25%) (1.28%))
1.094
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
1.09
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 1.55% + (1.094 * 6.33%)
8.47%

Discounted Cash Flow Calculation for SEHK:1297 using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Sinosoft Technology Group is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

Note: Free cash flow to equity valuations ignore the company's cash or debt.

SEHK:1297 DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (CNY, Millions) Source Present Value
Discounted (@ 8.47%)
2020 152.83 Analyst x3 140.89
2021 230.97 Analyst x3 196.29
2022 292.64 Est @ 26.7% 229.27
2023 348.70 Est @ 19.16% 251.85
2024 397.08 Est @ 13.87% 264.39
2025 437.49 Est @ 10.18% 268.54
2026 470.69 Est @ 7.59% 266.34
2027 497.88 Est @ 5.78% 259.72
2028 520.33 Est @ 4.51% 250.23
2029 539.17 Est @ 3.62% 239.03
Present value of next 10 years cash flows CN¥2,366.00
SEHK:1297 DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2029 × (1 + g) ÷ (Discount Rate – g)
= CN¥539.17 × (1 + 1.55%) ÷ (8.47% – 1.55%)
CN¥7,907.32
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= CN¥7,907.32 ÷ (1 + 8.47%)10
CN¥3,505.59
SEHK:1297 Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= CN¥2,366.00 + CN¥3,505.59
CN¥5,871.59
Equity Value per Share
(CNY)
= Total value / Shares Outstanding
= CN¥5,871.59 / 1,222.38
CN¥4.8
SEHK:1297 Discount to Share Price
Calculation Result
Exchange Rate CNY/HKD
(Reporting currency to currency of SEHK:1297)
1.111
Value per Share
(HKD)
= Value per Share in CNY x Exchange Rate (CNY/HKD)
= CN¥4.8 x 1.111
HK$5.33
Value per share (HKD) From above. HK$5.33
Current discount Discount to share price of HK$1.49
= -1 x (HK$1.49 - HK$5.33) / HK$5.33
72.1%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

Current Discount
Amount off the current price Sinosoft Technology Group is available for.
Intrinsic value
>50%
Share price is HK$1.49 vs Future cash flow value of HK$5.33
Current Discount Checks
For Sinosoft Technology Group to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • Sinosoft Technology Group's share price is below the future cash flow value, and at a moderate discount (> 20%).
  • Sinosoft Technology Group's share price is below the future cash flow value, and at a substantial discount (> 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Sinosoft Technology Group's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Sinosoft Technology Group's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
SEHK:1297 PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-06-30) in CNY CN¥0.20
SEHK:1297 Share Price ** SEHK (2019-12-06) in HKD HK$1.49
SEHK:1297 Share Price converted to CNY reporting currency Exchange rate (HKD/ CNY) 0.9 CN¥1.34
Hong Kong Software Industry PE Ratio Median Figure of 14 Publicly-Listed Software Companies 10.15x
Hong Kong Market PE Ratio Median Figure of 1,470 Publicly-Listed Companies 10.14x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Sinosoft Technology Group.

SEHK:1297 PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= SEHK:1297 Share Price ÷ EPS (both in CNY)

= 1.34 ÷ 0.20

6.6x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Sinosoft Technology Group is good value based on earnings compared to the HK Software industry average.
  • Sinosoft Technology Group is good value based on earnings compared to the Hong Kong market.
Price based on expected Growth
Does Sinosoft Technology Group's expected growth come at a high price?
Raw Data
SEHK:1297 PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 6.6x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 3 Analysts
17.8%per year
Hong Kong Software Industry PEG Ratio Median Figure of 5 Publicly-Listed Software Companies 0.54x
Hong Kong Market PEG Ratio Median Figure of 479 Publicly-Listed Companies 0.75x

*Line of best fit is calculated by linear regression .

SEHK:1297 PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 6.6x ÷ 17.8%

0.37x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Sinosoft Technology Group is good value based on expected growth next year.
Price based on value of assets
What value do investors place on Sinosoft Technology Group's assets?
Raw Data
SEHK:1297 PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-06-30) in CNY CN¥1.18
SEHK:1297 Share Price * SEHK (2019-12-06) in HKD HK$1.49
SEHK:1297 Share Price converted to CNY reporting currency Exchange rate (HKD/ CNY) 0.9 CN¥1.34
Hong Kong Software Industry PB Ratio Median Figure of 30 Publicly-Listed Software Companies 1.16x
Hong Kong Market PB Ratio Median Figure of 2,203 Publicly-Listed Companies 0.82x
SEHK:1297 PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= SEHK:1297 Share Price ÷ Book Value per Share (both in CNY)

= 1.34 ÷ 1.18

1.13x

* Primary Listing of Sinosoft Technology Group.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Sinosoft Technology Group is good value based on assets compared to the HK Software industry average.
X
Value checks
We assess Sinosoft Technology Group's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Software industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Software industry average (and greater than 0)? (1 check)
  5. Sinosoft Technology Group has a total score of 6/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

 How is Sinosoft Technology Group expected to perform in the next 1 to 3 years based on estimates from 3 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
17.8%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Sinosoft Technology Group expected to grow at an attractive rate?
  • Sinosoft Technology Group's earnings growth is expected to exceed the low risk savings rate of 1.6%.
Growth vs Market Checks
  • Sinosoft Technology Group's earnings growth is expected to exceed the Hong Kong market average.
  • Sinosoft Technology Group's revenue growth is expected to exceed the Hong Kong market average.
Annual Growth Rates Comparison
Raw Data
SEHK:1297 Future Growth Rates Data Sources
Data Point Source Value (per year)
SEHK:1297 Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 3 Analysts 17.8%
SEHK:1297 Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 3 Analysts 14%
Hong Kong Software Industry Earnings Growth Rate Market Cap Weighted Average 50.8%
Hong Kong Software Industry Revenue Growth Rate Market Cap Weighted Average 25.5%
Hong Kong Market Earnings Growth Rate Market Cap Weighted Average 11.9%
Hong Kong Market Revenue Growth Rate Market Cap Weighted Average 9.7%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
SEHK:1297 Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (5 months ago) See Below
Future Estimates Average of up to 3 Analyst Estimates (S&P Global) See Below
All numbers in CNY Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
SEHK:1297 Future Estimates Data
Date (Data in CNY Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2021-12-31 1,066 369 382 3
2020-12-31 933 326 317 3
2019-12-31 816 326 270 3
2019-12-08
SEHK:1297 Past Financials Data
Date (Data in CNY Millions) Revenue Cash Flow Net Income *
2019-06-30 751 217 249
2019-03-31 735 185 242
2018-12-31 719 152 236
2018-09-30 683 150 240
2018-06-30 648 149 243
2018-03-31 625 161 236
2017-12-31 601 173 230
2017-09-30 577 194 215
2017-06-30 553 215 200
2017-03-31 536 193 196
2016-12-31 519 171 191
2016-09-30 496 141 180

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Sinosoft Technology Group's earnings are expected to grow by 17.8% yearly, however this is not considered high growth (20% yearly).
  • Sinosoft Technology Group's revenue is expected to grow by 14% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
SEHK:1297 Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (5 months ago) See Below
Future Estimates Average of up to 3 Analyst Estimates (S&P Global) See Below

All data from Sinosoft Technology Group Company Filings, last reported 5 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

SEHK:1297 Future Estimates Data
Date (Data in CNY Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2021-12-31 0.32 0.36 0.29 3.00
2020-12-31 0.27 0.30 0.25 3.00
2019-12-31 0.23 0.26 0.21 3.00
2019-12-08
SEHK:1297 Past Financials Data
Date (Data in CNY Millions) EPS *
2019-06-30 0.20
2019-03-31 0.20
2018-12-31 0.19
2018-09-30 0.19
2018-06-30 0.20
2018-03-31 0.19
2017-12-31 0.19
2017-09-30 0.17
2017-06-30 0.16
2017-03-31 0.16
2016-12-31 0.15
2016-09-30 0.15

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Sinosoft Technology Group is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
X
Future performance checks
We assess Sinosoft Technology Group's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the Hong Kong market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the Hong Kong market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Sinosoft Technology Group has a total score of 3/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Sinosoft Technology Group performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Sinosoft Technology Group's growth in the last year to its industry (Software).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Sinosoft Technology Group's year on year earnings growth rate has been positive over the past 5 years.
  • Sinosoft Technology Group's 1-year earnings growth is less than its 5-year average (2.2% vs 14.8%)
  • Sinosoft Technology Group's earnings growth has not exceeded the HK Software industry average in the past year (2.2% vs 5%).
Earnings and Revenue History
Sinosoft Technology Group's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Sinosoft Technology Group Company Filings, last reported 5 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

SEHK:1297 Past Revenue, Cash Flow and Net Income Data
Date (Data in CNY Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-06-30 751.27 248.53 99.40 51.23
2019-03-31 734.90 242.44 97.22 50.04
2018-12-31 718.53 236.36 95.04 48.85
2018-09-30 683.46 239.81 93.93 44.05
2018-06-30 648.39 243.25 92.83 39.26
2018-03-31 624.70 236.46 92.96 42.28
2017-12-31 601.02 229.68 93.10 45.30
2017-09-30 577.23 214.74 86.00 52.71
2017-06-30 553.44 199.80 78.90 60.12
2017-03-31 536.19 195.60 73.43 61.17
2016-12-31 518.94 191.39 67.95 62.22
2016-09-30 495.61 180.49 69.74 61.20
2016-06-30 472.29 169.58 71.53 60.19
2016-03-31 454.42 164.56 71.59 55.19
2015-12-31 436.55 159.53 71.65 50.18
2015-09-30 410.24 152.34 65.67 43.05
2015-06-30 383.93 145.15 59.70 35.91
2015-03-31 365.89 139.84 59.94 34.70
2014-12-31 347.85 134.53 60.17 33.49
2014-09-30 328.76 125.70 61.04 32.02
2014-06-30 309.67 116.87 61.92 30.56
2014-03-31 295.25 108.90 55.04 29.51
2013-12-31 280.84 100.94 48.17 28.46
2013-09-30 270.53 98.59 43.12 29.19
2013-06-30 260.23 96.25 38.08 29.91
2013-03-31 243.48 86.24 36.88 25.29
2012-12-31 226.73 76.23 35.68 20.67

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Sinosoft Technology Group has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Sinosoft Technology Group used its assets more efficiently than the HK Software industry average last year based on Return on Assets.
  • Sinosoft Technology Group has improved its use of capital last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Sinosoft Technology Group's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Software industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Sinosoft Technology Group has a total score of 3/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Sinosoft Technology Group's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Sinosoft Technology Group's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Sinosoft Technology Group is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Sinosoft Technology Group's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Sinosoft Technology Group's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • Low level of unsold assets.
  • Debt is covered by short term assets, assets are 68.4x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Sinosoft Technology Group Company Filings, last reported 5 months ago.

SEHK:1297 Past Debt and Equity Data
Date (Data in CNY Millions) Total Equity Total Debt Cash & Short Term Investments
2019-06-30 1,449.70 20.00 157.42
2019-03-31 1,449.70 20.00 157.42
2018-12-31 1,368.00 50.00 196.18
2018-09-30 1,368.00 50.00 196.18
2018-06-30 1,189.89 50.00 179.77
2018-03-31 1,189.89 50.00 179.77
2017-12-31 1,180.93 0.00 244.42
2017-09-30 1,180.93 0.00 244.42
2017-06-30 1,047.41 0.00 246.21
2017-03-31 1,047.41 0.00 246.21
2016-12-31 1,035.30 0.00 279.43
2016-09-30 1,035.30 0.00 279.43
2016-06-30 922.98 0.00 325.78
2016-03-31 922.98 0.00 325.78
2015-12-31 880.34 0.00 386.12
2015-09-30 880.34 0.00 386.12
2015-06-30 777.57 0.00 347.55
2015-03-31 777.57 0.00 347.55
2014-12-31 741.00 0.00 382.24
2014-09-30 741.00 0.00 382.24
2014-06-30 652.61 0.00 344.19
2014-03-31 652.61 0.00 344.19
2013-12-31 621.91 0.00 360.17
2013-09-30 621.91 0.00 360.17
2013-06-30 243.17 80.70 34.38
2013-03-31 243.17 80.70 34.38
2012-12-31 233.40 82.31 55.18
  • Sinosoft Technology Group's level of debt (1.4%) compared to net worth is satisfactory (less than 40%).
  • Unable to establish if Sinosoft Technology Group's debt level has increased without past 5-year debt data.
  • Debt is well covered by operating cash flow (1087.4%, greater than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 1075.7x coverage).
X
Financial health checks
We assess Sinosoft Technology Group's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Sinosoft Technology Group has a total score of 5/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is Sinosoft Technology Group's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
1.49%
Current annual income from Sinosoft Technology Group dividends. Estimated to be 2.66% next year.
If you bought HK$2,000 of Sinosoft Technology Group shares you are expected to receive HK$30 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Sinosoft Technology Group's pays a lower dividend yield than the bottom 25% of dividend payers in Hong Kong (2.24%).
  • Sinosoft Technology Group's dividend is below the markets top 25% of dividend payers in Hong Kong (6.31%).
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
SEHK:1297 Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 3 Analyst Estimates (S&P Global) See Below
Hong Kong Software Industry Average Dividend Yield Market Cap Weighted Average of 5 Stocks 0.7%
Hong Kong Market Average Dividend Yield Market Cap Weighted Average of 963 Stocks 3.7%
Hong Kong Minimum Threshold Dividend Yield 10th Percentile 1.3%
Hong Kong Bottom 25% Dividend Yield 25th Percentile 2.2%
Hong Kong Top 25% Dividend Yield 75th Percentile 6.3%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

SEHK:1297 Future Dividends Estimate Data
Date (Data in CN¥) Dividend per Share (annual) Avg. No. Analysts
2021-12-31 0.04 3.00
2020-12-31 0.04 3.00
2019-12-31 0.03 3.00
2019-12-08
SEHK:1297 Past Annualized Dividends Data
Date (Data in CN¥) Dividend per share (annual) Avg. Yield (%)
2019-04-24 0.020 1.142
2018-06-12 0.028 1.304
2017-04-25 0.023 1.125
2016-05-25 0.019 0.724
2015-05-22 0.016 0.569
2014-05-22 0.013 0.595

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Sinosoft Technology Group has been paying a dividend for less than 10 years and during this time payments have been volatile (annual drop of over 20%).
  • Dividend payments have increased, but Sinosoft Technology Group only paid a dividend in the past 6 years.
Current Payout to shareholders
What portion of Sinosoft Technology Group's earnings are paid to the shareholders as a dividend.
  • Dividends paid are thoroughly covered by earnings (10.2x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be thoroughly covered by earnings (7.7x coverage).
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Income/ dividend checks
We assess Sinosoft Technology Group's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 1.3%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Sinosoft Technology Group afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Sinosoft Technology Group has a total score of 2/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of Sinosoft Technology Group's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Yingmei Xin
COMPENSATION CN¥2,500,000
AGE 52
CEO Bio

Ms. Yingmei Xin founded Sinosoft Technology Plc in 1998 and serves as its Chief Executive Officer. Ms. Yingmei serves as the Chairlady and Chief Executive Officer at Sinosoft Technology Group Limited. She is primarily responsible for the overall business operations and strategies and policies formulation of Sinosoft Technology Group. Ms. Xin has over 20 years of experience in the IT industry and is a Professional Senior Engineer. Prior to co-founding Nanjing Skytech in 1998, she was a technician of the National Sports Commission Information Centre from 1987 to 1992. From 1992 to 1995, she served as the General Manager of Nanjing Olympic Computer Co., Limited. From 1995 to 1998, she served as General Manager and Vice Chairlady of Honest Electronics Corporation Ltd. She has been a Director of Sinosoft Technology plc since January 17, 2006. She has been an Executive Director at Sinosoft Technology Group Limited since October 31, 2012 and served as its Director since January 6, 2011. She serves as a Director of Nanjing Skytech, Infotech Holdings, Jiangsu Skyinformation, Wuxi Skytech, Nanjing Skytech Quan Shui Tong and Zhenjiang Skyinformation. She serves as a Director of Sinosoft UK. She served as a Professional Senior Engineer by Professional Senior Qualification Accredition Committee of Jiangsu Province since November 25, 2010. She is a Member of the Twelve Chinese People's Political Consultative Conference and has won several awards for her achievements including National Key Personnel in the Promotion of the Software Industry, National Outstanding Entrepreneur in the Software Industry and Jiangsu Province Outstanding Entrepreneur in the Software Industry. She holds an Master's Degree in Business Administration from Nanjing University in September 2008.

CEO Compensation
  • Yingmei's compensation has been consistent with company performance over the past year, both up more than 20%.
  • Yingmei's remuneration is about average for companies of similar size in Hong Kong.
Management Team

Yingmei Xin

TITLE
Chairlady & CEO
COMPENSATION
CN¥3M
AGE
52

Hui Su

TITLE
CFO & Executive Director
AGE
39
TENURE
0.9 yrs

Fang Xu

TITLE
Head of Human Resource Department
AGE
48

Xiaogang Wang

TITLE
Senior Vice President
AGE
56

Li Huiling Lee

TITLE
Co-Head of Internal Audit Department
AGE
45

Sulin Ding

TITLE
Co-Head of Internal Audit Department
AGE
62

Maurice Ngai

TITLE
Company Secretary
AGE
57
Board of Directors Tenure

Average tenure and age of the Sinosoft Technology Group board of directors in years:

7.2
Average Tenure
53.5
Average Age
  • The tenure for the Sinosoft Technology Group board of directors is about average.
Board of Directors

Yingmei Xin

TITLE
Chairlady & CEO
COMPENSATION
CN¥3M
AGE
52

Hui Su

TITLE
CFO & Executive Director
AGE
39
TENURE
0.9 yrs

Choon Kang

TITLE
Independent Non Executive Director
COMPENSATION
CN¥151K
AGE
55
TENURE
7.2 yrs

Walter Kwauk

TITLE
Independent Non Executive Director
COMPENSATION
CN¥151K
AGE
66
TENURE
7.2 yrs

Ping Zong

TITLE
Independent Non Executive Director
COMPENSATION
CN¥101K
AGE
62
TENURE
7.2 yrs

Geng Ren

TITLE
Non-Executive Director
AGE
36
TENURE
0.4 yrs
Who owns this company?
Recent Insider Trading
  • More shares have been bought than sold by Sinosoft Technology Group individual insiders in the past 3 months.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price (HK$) Value (HK$)
28. Nov 19 Buy Xiaogang Wang Individual 28. Nov 19 28. Nov 19 200,000 HK$1.48 HK$295,420
30. Apr 19 Buy FIL Limited Company 25. Apr 19 25. Apr 19 280,000 HK$2.80 HK$784,000
17. Apr 19 Buy Yingmei Xin Individual 17. Apr 19 17. Apr 19 200,000 HK$2.78 HK$555,899
18. Apr 19 Buy Yingmei Xin Individual 18. Apr 19 18. Apr 19 200,000 HK$2.82 HK$563,339
03. Apr 19 Buy Yingmei Xin Individual 03. Apr 19 03. Apr 19 200,000 HK$2.95 HK$590,719
28. Mar 19 Buy Yingmei Xin Individual 28. Mar 19 28. Mar 19 160,000 HK$2.68 HK$428,688
27. Mar 19 Buy Yingmei Xin Individual 27. Mar 19 27. Mar 19 160,000 HK$2.65 HK$424,736
26. Mar 19 Buy Yingmei Xin Individual 26. Mar 19 26. Mar 19 1,100,000 HK$2.66 HK$2,930,511
X
Management checks
We assess Sinosoft Technology Group's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Sinosoft Technology Group has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

Simply Wall St News

Read This Before Buying Sinosoft Technology Group Limited (HKG:1297) For Its Dividend

Today we'll take a closer look at Sinosoft Technology Group Limited (HKG:1297) from a dividend investor's perspective. Owning a strong business and reinvesting the dividends is widely seen as an attractive way of growing your wealth. Yet sometimes, investors buy a popular dividend stock because of its yield, and then lose money if the company's dividend doesn't live up to expectations. Investors might not know much about Sinosoft Technology Group's dividend prospects, even though it has been paying dividends for the last five years and offers a 1.3% yield. A 1.3% yield is not inspiring, but the longer payment history has some appeal. The company also bought back stock equivalent to around 2.5% of market capitalisation this year." There are a few simple ways to reduce the risks of buying Sinosoft Technology Group for its dividend, and we'll go through these below. Explore this interactive chart for our latest analysis on Sinosoft Technology Group! SEHK:1297 Historical Dividend Yield, September 2nd 2019Payout ratios Dividends are usually paid out of company earnings. If a company is paying more than it earns, then the dividend might become unsustainable - hardly an ideal situation. As a result, we should always investigate whether a company can afford its dividend, measured as a percentage of a company's net income after tax. Looking at the data, we can see that 9.8% of Sinosoft Technology Group's profits were paid out as dividends in the last 12 months. We like this low payout ratio, because it implies the dividend is well covered and leaves ample opportunity for reinvestment. We also measure dividends paid against a company's levered free cash flow, to see if enough cash was generated to cover the dividend. Unfortunately, while Sinosoft Technology Group pays a dividend, it also reported negative free cash flow last year. While there may be a good reason for this, it's not ideal from a dividend perspective. While the above analysis focuses on dividends relative to a company's earnings, we do note Sinosoft Technology Group's strong net cash position, which will let it pay larger dividends for a time, should it choose. Dividend Volatility One of the major risks of relying on dividend income, is the potential for a company to struggle financially and cut its dividend. Not only is your income cut, but the value of your investment declines as well - nasty. Sinosoft Technology Group has been paying a dividend for the past five years. During the past five-year period, the first annual payment was CN¥0.013 in 2014, compared to CN¥0.02 last year. Dividends per share have grown at approximately 9.9% per year over this time. Sinosoft Technology Group's dividend payments have fluctuated, so it hasn't grown 9.9% every year, but the CAGR is a useful rule of thumb for approximating the historical growth. It's good to see the dividend growing at a decent rate, but the dividend has been cut at least once in the past. Sinosoft Technology Group might have put its house in order since then, but we remain cautious. Dividend Growth Potential Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. It's good to see Sinosoft Technology Group has been growing its earnings per share at 16% a year over the past five years. Earnings per share are growing at a solid clip, and the payout ratio is low. We think this is an ideal combination in a dividend stock. Conclusion Dividend investors should always want to know if a) a company's dividends are affordable, b) if there is a track record of consistent payments, and c) if the dividend is capable of growing. … Sinosoft Technology Group has a low payout ratio, which we like, although it paid out virtually all of its generated cash. … While we're not hugely bearish on it, overall we think there are potentially better dividend stocks than Sinosoft Technology Group out there.

Simply Wall St -

Our Take On Sinosoft Technology Group Limited's (HKG:1297) CEO Salary

View our latest analysis for Sinosoft Technology Group How Does Yingmei Xin's Compensation Compare With Similar Sized Companies? … According to our data, Sinosoft Technology Group Limited has a market capitalization of HK$2.4b, and pays its CEO total annual compensation worth CN¥2.5m. … Given the total loss of 40% over three years, many shareholders in Sinosoft Technology Group Limited are probably rather dissatisfied, to say the least.

Simply Wall St -

Should You Like Sinosoft Technology Group Limited’s (HKG:1297) High Return On Capital Employed?

Analysts use this formula to calculate return on capital employed: Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities) Or for Sinosoft Technology Group: 0.22 = CN¥308m ÷ (CN¥1.7b - CN¥261m) (Based on the trailing twelve months to December 2018.) Therefore, Sinosoft Technology Group has an ROCE of 22%. … Sinosoft Technology Group's Current Liabilities And Their Impact On Its ROCE Liabilities, such as supplier bills and bank overdrafts, are referred to as current liabilities if they need to be paid within 12 months. … The Bottom Line On Sinosoft Technology Group's ROCE This is good to see, and with such a high ROCE, Sinosoft Technology Group may be worth a closer look.

Simply Wall St -

What Do Analysts Think About The Future Of Sinosoft Technology Group Limited's (HKG:1297)?

Based on Sinosoft Technology Group Limited's (HKG:1297) earnings update in December 2018, analyst consensus outlook appear cautiously optimistic, with earnings expected to grow by 22% in the upcoming year compared with the past 5-year average growth rate of 17%. … Check out our latest analysis for Sinosoft Technology Group How is Sinosoft Technology Group going to perform in the near future? … SEHK:1297 Past and Future Earnings, August 9th 2019 This results in an annual growth rate of 23% based on the most recent earnings level of CN¥236m to the final forecast of CN¥473m by 2022.

Simply Wall St -

Sinosoft Technology Group Limited (HKG:1297): What Can We Expect From This High Growth Stock?

The most recent earnings update Sinosoft Technology Group Limited's (HKG:1297) released in April 2019 signalled that the company gained from a small tailwind, leading to a single-digit earnings growth of 2.9%. … Below, I've laid out key numbers on how market analysts perceive Sinosoft Technology Group's earnings growth trajectory over the next few years and whether the future looks even brighter than the past. … Check out our latest analysis for Sinosoft Technology Group Market analysts' prospects for the coming year seems optimistic, with earnings expanding by a robust 22%.

Simply Wall St -

Why We Think Sinosoft Technology Group Limited (HKG:1297) Could Be Worth Looking At

Undervalued with high growth potential 1297 is an attractive stock for growth-seeking investors, with an expected earnings growth of 23% in the upcoming year which is expected to flow into an impressive return on equity of 22% over the next couple of years. … SEHK:1297 Past and Future Earnings, July 24th 2019 1297's strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. … Dividend Income vs Capital Gains: Does 1297 return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends?

Simply Wall St -

At HK$2.16, Is Sinosoft Technology Group Limited (HKG:1297) Worth Looking At Closely?

Sinosoft Technology Group Limited (HKG:1297), which is in the software business, and is based in China, saw significant share price movement during recent months on the SEHK, rising to highs of HK$2.95 and falling to the lows of HK$2.16. … I find that Sinosoft Technology Group’s ratio of 9.86x is trading slightly below its industry peers’ ratio of 11.37x, which means if you buy Sinosoft Technology Group today, you’d be paying a fair price for it. … In addition to this, it seems like Sinosoft Technology Group’s share price is quite stable, which could mean there may be less chances to buy low in the future now that it’s fairly valued.

Simply Wall St -

Do Insiders Own Shares In Sinosoft Technology Group Limited (HKG:1297)?

As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.' Sinosoft Technology Group is a smaller company with a market capitalization of HK$2.7b, so it may still be flying under the radar of many institutional investors. … View our latest analysis for Sinosoft Technology Group SEHK:1297 Ownership Summary, July 9th 2019 What Does The Institutional Ownership Tell Us About Sinosoft Technology Group? … Insider Ownership Of Sinosoft Technology Group The definition of company insiders can be subjective, and does vary between jurisdictions.

Simply Wall St -

Does Sinosoft Technology Group (HKG:1297) Have A Healthy Balance Sheet?

Check out our latest analysis for Sinosoft Technology Group What Is Sinosoft Technology Group's Debt? … SEHK:1297 Historical Debt, July 1st 2019 A Look At Sinosoft Technology Group's Liabilities According to the last reported balance sheet, Sinosoft Technology Group had liabilities of CN¥261.2m due within 12 months, and liabilities of CN¥51.1m due beyond 12 months. … Sinosoft Technology Group may have net cash on the balance sheet, but it is still interesting to look at how well the business converts its earnings before interest and tax (EBIT) to free cash flow, because that will influence both its need for, and its capacity to manage debt.

Simply Wall St -

How Does Sinosoft Technology Group Limited's (HKG:1297) Earnings Growth Stack Up Against Industry Performance?

When Sinosoft Technology Group Limited's (HKG:1297) announced its latest earnings (31 December 2018), I wanted to understand how these figures stacked up against its past performance. … The two benchmarks I used were Sinosoft Technology Group's average earnings over the past couple of years, and its industry performance. … However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 17%, indicating the rate at which 1297 is growing has slowed down.

Simply Wall St -

Company Info

Description

Sinosoft Technology Group Limited, an investment holding company, primarily provides software development and system integration services in the People's Republic of China. It operates through four segments: Tax Software and Related Services, Low Carbon & Ecology Software and Related Services, Government Big Data Software and Related Services, and System Integration Solutions. The company offers export tax software products, consultation services, and training courses. It also provides e-government solutions and products that are used by government agencies at various administrative levels, including the ministerial, provincial, municipal, and district levels. In addition, the company offers carbon management solutions that enable government agencies or enterprises to audit, calculate, and control their greenhouse gas emissions and energy consumption. Further, it provides system integration solutions to government agencies, including information systems consultation and feasibility analysis; sourcing of systems and equipment; LAN and Web-based network design and implementation; analysis, planning, and design of integrated wiring and network systems; design and implementation of video conferencing and multimedia education systems; and system management and supervision, as well as services comprising system architectures, intuitive graphical and multimedia user interfaces, Web services, and other Internet technologies. Additionally, the company sells computer products, as well as offers related services; provides investment and advisory services; and holds properties. Sinosoft Technology Group Limited was incorporated in 2011 and is headquartered in Nanjing, China.

Details
Name: Sinosoft Technology Group Limited
1297
Exchange: SEHK
Founded: 2011
HK$1,735,786,132
1,222,384,600
Website: http://www.sinosoft-technology.com
Address: Sinosoft Technology Group Limited
No. 26 Tianpu Road,
Jiangpu Street,
Nanjing,
Jiangsu Province, China
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
SEHK 1297 Ordinary Shares The Stock Exchange of Hong Kong Ltd. HK HKD 09. Jul 2013
DB 79S Ordinary Shares Deutsche Boerse AG DE EUR 09. Jul 2013
Number of employees
Current staff
Staff numbers
740
Sinosoft Technology Group employees.
Industry
Application Software
Software
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/12/08 13:02
End of day share price update: 2019/12/06 00:00
Last estimates confirmation: 2019/09/05
Last earnings filing: 2019/09/24
Last earnings reported: 2019/06/30
Last annual earnings reported: 2018/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.