Emperor Capital Group Limited (0717.HK) is a small but renowned financial institution in Hong Kong. The company offers a wide range of financial services. This includes commercial and personal lending, margin and IPO financing, brokerage, wealth and asset management, placing and underwriting services for listed issuers, and corporate finance advisory services. Emperor Capital has eleven offices in Hong Kong and three in mainland China. The company was founded in 1993 and listed on the Hong Kong Stock Exchange since April 2007. Its shares can be furthermore traded in Germany.
Emperor Capital Group has received several local and international awards for its products and services. The company is one of the best securities agencies in Hong Kong according to magazines such as Asiamoney, Capital, Prime, and Eastweek.
Although overtaken by Singapore recently as the third leading global financial center, Hong Kong remains still strong in equities and IPOs. The former British colony has the world’s largest IPO market with a total of 263bn HKD (33.9bn USD) in funds raised in 2015. Hong Kong Stock Exchange has more than 1,800 listed companies, including over 950 mainland enterprises, with a market capitalization of 31.6tr HKD (4.1tr USD) and an average daily turnover of around 105.6bn HKD (13.6bn USD). Hong Kong is the largest offshore RMB business hub and also one of the largest asset management centers in Asia. The combined fund management industry in Hong Kong oversaw more than 17.7tr HKD (2.3tr USD) worth of assets in 2015.
Emperor Capital is benefiting from this development as Hong Kong will continue to attract international investors and to grow as a platform for investments in the region. Since November 2014 the new Shanghai-Hong Kong Stock Connect program, provided Emperor Capital with a strong influx of new customers as policy makers loosened restrictions on the mainland and Hong Kong citizens trading in each other’s markets. The company introduced various innovations and optimized its financial services, such as 24-hour online trading platform and special investment immigration services.
With a staff of 274 employees, Emperor Capital generated revenues of 460m HKD (59m USD) and a profit before tax of 311m HKD (40m USD) for the first six months of its fiscal year. An increase of 59% and 79% respectively compared to the same period a year ago. In 2015 revenues and profits were already up 53% and 93% respectively. Emperor Capital’s shares are currently trading at only eight times their earnings, which is only half of its industry peers. The company has cash and equivalents of 760m HKD (98m USD) and comes with an equity ratio of more than 50% by the end of March.
Emperor Capital’s shares are in an uptrend since their lows in January and gained 50% since. Negative headlines in May, after the company released way too positive buy recommendations for more than 170 analyzed companies, had only short-term effects on the share price. The next three months are statistically the most profitable months for stock investments. This should also further boost Emperor Capital’s brokerage and margin-lending revenues.
AIS Rating: ★★★☆☆
| 2011 | 2012 | 2013 | 2014 | 2015 | 2016 H1 only |
|
|---|---|---|---|---|---|---|
| EPS (HKDcents) | 4.4 | 2.4 | 6.0 | 6.0 | 10.0 | 4.5 |
| Change | -36% | -44% | 146% | 0% | 68% | 13% |
| P/E | P/E SECTOR |
P/B | P/CF | Equity Ratio* |
ROE | Debt/ Equity** |
Div YLD |
|---|---|---|---|---|---|---|---|
| 8 | 17 | 1.3 | 9.4 | 54% | 20% | 85% | 3.4% |
* Equity / Total Assets, ** Total Liabilities / Equity
