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Henderson Land Development Co Ltd 00012

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Stock XHKG Rating as of
HKD 21.10 −0.10 (0.47%)
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Company Report

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Hong Kong Developers: Housing Market Retreats After Initial Rebound, Sector Remains Undervalued

Xinfu Lee

We still see value in Hong Kong developers despite the recent slowdown in home sale transactions. Our preferred pick in the sector is Henderson Land, which trades at a 37% discount to our fair value estimate and offers an attractive 2024 dividend yield of 8.4% at the current price. We also like its diversified recurring income stream generated by its investment properties portfolio and stable contribution from its utility associate.

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Price vs Fair Value

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00012 is trading at a 636% premium.
Price
HKD 21.20
Fair Value
HKD 23.00
Uncertainty
Medium
1-Star Price
HKD 68.10
5-Star Price
HKD 58.40
Economic Moat
Dmxp
Capital Allocation
Tcsmhfcls

Bulls Say, Bears Say

Bulls

The Hong Kong government is expected to speed up the farmland conversion process as part of its effort to increase housing supply

Bears

The farmland conversion process remains challenging, given the number of stakeholders involved. Urban redevelopment is slow by its very nature. Hence, asset turn is expected to remain slow.

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Trading Information

Previous Close Price
HKD 21.20
Day Range
HKD 21.00–21.30
52-Week Range
HKD 19.32–27.60
Bid/Ask
HKD 21.05 / HKD 21.10
Market Cap
HKD 102.15 Bil
Volume/Avg
1.5 Mil / 3.8 Mil

Key Statistics

Price/Earnings (Normalized)
12.58
Price/Sales
3.72
Dividend Yield (Trailing)
8.49%
Dividend Yield (Forward)
8.49%
Total Yield
8.49%

Company Profile

Henderson Land Development is a leading property developer in Hong Kong with a focus on urban redevelopment and farmland conversion. The company was founded in 1976, listed in 1981. Founder Lee Shau Kee is the controlling shareholder, and a series of disposals in December 2017 reduced his stake to below 72.8%. The share disposals were the first since 1993, lessening the possibility of a privatization. Lee stepped down in May 2019, succeeded by his two sons as joint chairmen and managing directors. Henderson Land also controls four listed entities directly, including a 69% stake in Henderson Investment, a 41.5% stake in Hong Kong and China Gas, a 33.4% stake in Hong Kong Ferry, and a 50.1% stake in Miramar Hotel & Investment.
Sector
Real Estate
Industry
Real Estate - Diversified
Stock Style Box
Large Value
Total Number of Employees
9,835
Website
https://www.hld.com

Competitors

Valuation

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Metric
00012
00101
01972
Price/Earnings (Normalized)
 12.587.029.98
Price/Book Value
 0.310.220.27
Price/Sales
 3.722.865.23
Price/Cash Flow
 —7.8311.51
Price/Earnings
00012
00101
01972

Financial Strength

Metric
00012
00101
01972
Quick Ratio
 0.540.580.48
Current Ratio
 2.231.521.03
Interest Coverage
 6.2911.017.92
Quick Ratio
00012
00101
01972

Profitability

Metric
00012
00101
01972
Return on Assets (Normalized)
 1.81%1.94%2.11%
Return on Equity (Normalized)
 2.97%3.14%2.54%
Return on Invested Capital (Normalized)
 2.49%2.39%2.33%
Return on Assets
00012
00101
01972
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Real Estate - Diversified Industry Comparables

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1-Day Chart
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Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
Gould Investors LP
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—Fvl$26.4 Bil
 Mitsubishi Estate Co Ltd ADR
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—Pyzf$20.6 Bil
 Mitsubishi Estate Co Ltd
MITEF
—Jcg$20.6 Bil
 SM Prime Holdings Inc
SPHXF
—Xcp$14.1 Bil
 Henderson Land Development Co Ltd
HLDVF
—Qhh$13.1 Bil
 Henderson Land Development Co Ltd ADR
HLDCY
—Ffn$13.1 Bil
 Fastighets AB Balder Class B
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—Jjl$8.7 Bil

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