Review of Two FTSE 350 Buzzing Stocks – HSBC Holdings Plc and QinetiQ Group Plc

  • Nov 26, 2019 GMT
  • Team Kalkine
Review of Two FTSE 350 Buzzing Stocks – HSBC Holdings Plc and QinetiQ Group Plc

HSBC Holdings Plc

HSBC Holdings Plc (LON: HSBA) a part of the Hong Kong and Shanghai Banking Corporation (HSBC) Group is a London, based banking and finance-related services organisation. The organisation is probably the biggest business segment of the HSBC Group, serving over 40 million clients all around the globe, covering 65 nations altogether. The organisation has four prominent divisions through which it works- Global banking and markets, Global private banking, Commercial banking and Retail banking and wealth management. In this segment, the organisation supports its clients through four significant services, which incorporate the likes of Global Trade and Receivables Finance, giving services like working capital and the management of trade risk to both purchasers as well as suppliers all around the exchange cycle, Global Liquidity and Cash Management is another important service of the bank, which empowers the clients to deal with their cash and receipts all through the liquidity cycle and furthermore bolstering simple and fast payments process. The worldwide banking service in the business banking segment provides services like debt financing, equity financing advisory services to clients across the world. Providing security from finance-related and different other business hazards is the function of its Insurance and Investments services segment.

HSBA Financial Performance

On 28th October 2019, the company released its earnings for the 3Q and 9M ended 30th September 2019. The company announced that reported profit before tax in the Asian area was up by 4 per cent YoY to USD 4.7 billion in Q3 2019, supported by a strong and consistent show in the Hong Kong area.

For the quarter under review, the PBT was lower by 18 per cent YoY to USD 4.8 billion in Q3 2019, as compared to a Profit before tax of USD 6.194 billion in Q2 2019. The profit after tax for the Q3 ended 30th September 2019 declined by 24.50 per cent year on year to USD 3.795 billion from USD 5.027 billion of Q2 2019. The Return on tangible equity annualised (RoTE) for Q3 2019 was reported to be at 6.4 per cent.

  Nine Months Ended   Quarter Ended
  30 Sep 2019 30 Sep 2018   30 Sep 2019 30 Jun 2019 30 Sep 2018
Reported results            
Reported revenue ($m)          42,727       41,085            13,355          14,944          13,798
Reported profit before tax ($m)          17,244       16,634               4,837             6,194             5,922
Reported profit after tax ($m)          13,732       12,932               3,795             5,027             4,516
Profit attributable to the ordinary stockholders of the parent company ($m)          11,478       11,071               2,971             4,373             3,899
Basic earnings per stock ($)               0.57           0.56                 0.15               0.22               0.19
Diluted earnings per stock ($)               0.57           0.55                 0.15               0.22               0.19
Return on average ordinary stockholders' equity (annualised) (%)               9.20           9.00                 7.00             10.50               9.60
Return on average tangible equity (annualised) (%)               9.50         10.10                 6.40             11.70             10.90
Net interest margin (%)               1.59           1.67        
             
Adjusted results            
Adjusted revenue ($m)          41,762       39,868            13,267          13,881          13,486
Adjusted profit before tax ($m)          17,864       17,814               5,348             6,101             6,092
Adjusted jaws (%)               2.20                  -2.40    
Adjusted cost efficiency ratio (%)             56.80         57.90               56.90             57.30             55.50
Expected credit losses and other credit impairment charges ('ECL') as % of average gross loans and advances to customers (%)               0.27           0.12                 0.34               0.22               0.20

Source: Company Website

HSBA Stock Price Performance

(Source: Thomson Reuters) Daily Chart as on 25-November-19, after the close of the market

On 25th November 2019, at the close of market, HSBC Holdings Plc’s stock’s current market price was reported to be at GBX 582.80 per stock, compared to the previous day’s closing price at GBX 579.80 per stock. This was a positive change of 0.52 per cent or GBX 3.00 per stock. At the time of writing, the HSBC Holdings Plc stock was reported to be 2.99 per cent above the 52-week low stock price, which was at GBX 565.90 per stock, that the company’s stocks reached on November 15, 2019. At the current market price, the stock was also 15.25 per cent below the 52-week high price of GBX 687.7 per stock, which the company’s stock achieved on May 03, 2019. The market capitalisation (M-Cap) of HSBC Holdings Plc stood at GBP 117.771 billion.

The company’s stock has witnessed a downside of 13.51 per cent in value in the last one year, from the price of GBX 673.80 per stock that the stocks closed at, on November 26, 2018.

QinetiQ Group Plc

QinetiQ Group Plc (QQ.) is a Farnborough; the United Kingdom headquartered design-based company working across every aspect of the life cycle of critical equipment and infrastructure. It is engaged in the business of providing aerospace and defence related services to security departments of different governments and also to military organisations around the globe. The company’s core capabilities are in the areas of Tests and Evaluation of various defence based products such as C4ISR, Robotics as well as in providing support to acquisition and transformation programmes.

Financial Performance

On 14th November 2019, the organisation reported its interim results for the half-year completed on 30th September 2019. The organisation revealed a strong 16 per cent year on year increase in the revenue of the company (10 per cent on an organic basis). The organisation likewise announced a year on year increase of 16 per cent in the operating profit during the reporting period marking a consistent performance. In terms of its operational update, the company reported that it was on the way to delivery of new Long-Term Partnering Agreement (LTPA) contract for Ministry of Defence of the United Kingdom. The company also highlighted that there was a growth in the international revenue to £150.8 million for the period, as compared to the H1 2019 international revenue of £129.7 million. The international revenue now sums up to 31 per cent of the total revenue post the reported results. The company also stated that the management expects to win more contracts and take on various campaigns internationally.

  Statutory results Underlying* results
  H1 2020 H1 2019   H1 2020   H1 2019
Revenue £486.5 m £420.3 m £486.5 m £420.3 m
Operating profit £68.5 m £47.8 m £59.7 m £51.6 m
Profit after tax £62.2 m £50.1 m £52.0 m £45.8 m
Earnings per stock 11.0 p 8.9 p 9.2 p 8.1 p
Interim dividend per stock 2.2 p 2.1 p 2.2 p 2.1 p
         
Total funded order backlog     £3,083.6 m £1,882.1 m
Total orders in the period1     £410.8 m £298.1 m
         
Net cash flow from operations £77.0 m £54.9 m £77.0 m £54.9 m
Net cash £173.5 m £220.8 m £173.5 m £220.8 m

Source: Company Website

Stock Price Performance

(Source: Thomson Reuters) Daily Chart as on 25-November-19, after the close of the market

On 25th November 2019, at the close of market, QinetiQ Group Plc’s stock’s current market price was reported to be  at GBX 341.00 per stock, compared to the previous day’s closing price at GBX 339.80 per stock. This was a positive change of 0.35 per cent or GBX 1.20 per stock. At the time of writing, the QinetiQ Group Plc stock was 28.57 per cent above the 52-week low stock price, which was at GBX 265.22 per stock, that the company’s stocks reached on August 14, 2019. At the current market price, the stock was also 3.94 per cent below the 52-week high price at GBX 355.00 per stock, which the company’s stock achieved on November 15, 2019. The market capitalisation (M-Cap) of QinetiQ Group Plc stood at GBP 1.929 billion.

For the day 799,800 of the company’s stocks were traded in the market. The company’s stock has displayed an upside of 22.31 per cent in value in the last one year, from the price of GBX 278.80 that the stock closed at, on November 26, 2018.

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