Asian Dividend Gems: Eagle Nice International Holdings

• Eagle Nice International Holdings' dividend yield averaged 9.2% from FY 2019 to FY 2023. Its annual dividend payout averaged 72.2% in the same period.

• Eagle Nice (Intl) Hldgs is mainly engaged in the design and manufacture of sportswear for adults and children on an OEM basis. Yue Yuen Industrial Holdings is the largest shareholder.

• Eagle Nice Holdings also has attractive valuations and consistent growth in sales and profits.

Conclusion First

Eagle Nice (Intl) Hldgs (2368 HK), which is mainly engaged in the design and manufacture of sportswear for adults and children on an OEM basis, provides high dividend yields, with attractive valuations and consistent growth in sales and profits. The company has generated positive operating and net profits every year in the past decade. The company's dividend yield averaged 9.2% from FY 2019 to FY 2023. Yue Yuen Industrial Holdings (551 HK) is the largest shareholder of Eagle Nice Holdings with a 35.97% stake.

The appreciation of the USD versus non-US currencies including RMB, IDR, and VND have helped to improve its profit margins as the company's production costs are mainly settled in RMB, IDR, and VND. From FY 2017 to FY 2023, the company's revenue and net profit increased at CAGR of 14.9% and 11.2%, respectively.

Eagle Nice International Holdings DPS, Dividend Yield, & Dividend Payout

Eagle Nice International Holdings' dividend yield averaged 9.2% from FY 2019 to FY 2023. Its annual dividend payout averaged 72.2% in the same period. The company's DPS ranged from HKD 0.20 to HKD 0.44 in the past five years. The company's dividend yield increased from 8.1% in FY 2022 to 10.2% in FY 2023.

Eagle Nice Holdings Earnings & Dividends (Source: Smartkarma)

How Did We Find Eagle Nice Holdings?

We found Eagle Nice (Intl) Hldgs (2368 HK) using Smartkarma's Smart Score Screener system. We used the following screening methodology:

• Market cap - More than $300 million

• Countries - Hong Kong only

• Sector - All sectors

• Dividends = Only 5

• Resilience, Value, Growth, and Momentum = 3 to 5

Using the criteria above resulted in a list of 22 stocks. Among these companies, we thought Eagle Nice Holdings was the most interesting company to write about at this time.

Source: Smartkarma

Among the 22 stocks in the table above, we have written about four of the companies including Precision Tsugami China (1651 HK), Dream International (1126 HK), Golden Throat Holdings (6896 HK), and Yue Yuen Industrial Holdings (551 HK). These four stocks are up on average 18.2% from the date of our insights to current (26 April 2024).

Eagle Nice International Holdings Company Background

Eagle Nice (Intl) Hldgs (2368 HK) is mainly engaged in the design and manufacture of sportswear for adults and children on an OEM basis. The sportswear supplied by the company include T-shirts, jackets, pants, tracksuits, and sweaters. The easing of COVID-19 pandemic restrictions have helped most countries to resume to normal for activities such as sports and outbound travel, resulting in a rebound in consumer demand for sportswear.

Expansion of Capacity - The company continued to expand its production facilities in China, Indonesia, and Vietnam in the past several years. The company acquired two production bases in Foshan PRC and Bandung Regency, Indonesia in FY 2022. It acquired another production plant in Long An Province, Vietnam in FY 2023. These three new production bases have contributed to the company's internal growth and improved in sharing of resources and technologies. In FY 2023, the Bandung Factory was upgraded with the introduction of more advanced automated production equipment and technologies. Local staffs received specialised training in automation and digitalisation.

In the past several years, the company has expanded its production bases in different countries to expand its production capacities to meet different customer requirements while hedging against potential political and economic risks. In other words, it has expanded in non-China countries such as Indonesia and Vietnam more aggressively in the past several years to mitigate potential risks associated with higher political risks in China.

Eagle Nice International Holdings (Source: Company data)

Revenue Breakdown - Mainland China accounted for 48.5% of total revenue in FY 2023, down from 51.3% in FY 2022. USA accounted for 21.7% of total revenue followed by Europe (15.5%) in FY 2023. Revenue contribution in the USA increased in FY 2023 while revenue contribution in Europe declined in the same period.

Eagle Nice International Holdings Revenue Breakdown (Source: Company data)

Eagle Nice International Holdings Major Shareholders

Yue Yuen Industrial Holdings (551 HK) is the largest shareholder of Eagle Nice Holdings with a 35.97% stake. Yuk Sing Chung is the largest single individual shareholder with a 17.26% stake, followed by Hsiao Ying Chen (6.84%), and Yong Biao Huang (6.08%). Invesco, Goldman Sachs, and Dimensional Fund Advisors are some of the institutional investors of Eagle Nice Holdings.

We wrote about Yue Yuen Industrial Holdings (551 HK) in our insight Asian Dividend Gems: Yue Yuen Industrial (6 November 2023). Since our insight, Yue Yuen Industrial's share price is up 53%.