June 20, 2021

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Should You Worry About Huscoke Holdings Limited’s (HKG:704) CEO Pay Cheque?

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Xu Guang Zhao became the CEO of Huscoke Holdings Limited (HKG:704) in 2017. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. The aim of all this is to consider the appropriateness of CEO pay levels.

Check out our latest analysis for Huscoke Holdings

How Does Xu Guang Zhao’s Compensation Compare With Similar Sized Companies?

At the time of writing, our data says that Huscoke Holdings Limited has a market cap of HK$273m, and reported total annual CEO compensation of HK$4.2m for the year to December 2018. While this analysis focuses on total compensation, it’s worth noting the salary is lower, valued at HK$3.3m. We looked at a group of companies with market capitalizations under HK$1.6b, and the median CEO total compensation was HK$1.8m.

As you can see, Xu Guang Zhao is paid more than the median CEO pay at companies of a similar size, in the same market. However, this does not necessarily mean Huscoke Holdings Limited is paying too much. We can get a better idea of how generous the pay is by looking at the performance of the underlying business.

You can see, below, how CEO compensation at Huscoke Holdings has changed over time.

SEHK:704 CEO Compensation, March 10th 2020

Is Huscoke Holdings Limited Growing?

Over the last three years Huscoke Holdings Limited has grown its earnings per share (EPS) by an average of 49% per year (using a line of best fit). Its revenue is up 4.9% over last year.

This shows that the company has improved itself over the last few years. Good news for shareholders. It’s nice to see a little revenue growth, as this is consistent with healthy business conditions. Although we don’t have analyst forecasts you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has Huscoke Holdings Limited Been A Good Investment?

With a three year total loss of 63%, Huscoke Holdings Limited would certainly have some dissatisfied shareholders. This suggests it would be unwise for the company to pay the CEO too generously.

In Summary…

We compared the total CEO remuneration paid by Huscoke Holdings Limited, and compared it to remuneration at a group of similar sized companies. We found that it pays well over the median amount paid in the benchmark group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. However, the returns to investors are far less impressive, over the same period. Considering the per share profit growth, but keeping in mind the weak returns, we’d need more time to form a view on CEO compensation. Looking into other areas, we’ve picked out 4 warning signs for Huscoke Holdings that investors should think about before committing capital to this stock.

Important note: Huscoke Holdings may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

If you spot an error that warrants correction, please contact the editor at [email protected] This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.

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