Key Insights

• HK Asia Holdings to hold its Annual General Meeting on 5th of September
• Salary of HK$627.0k is part of CEO Chi Fai Chung's total remuneration
• The total compensation is 60% less than the average for the industry
• HK Asia Holdings' EPS grew by 11% over the past three years while total shareholder loss over the past three years was 89%

The performance at HK Asia Holdings Limited (HKG:1723) has been rather lacklustre of late and shareholders may be wondering what CEO Chi Fai Chung is planning to do about this. They will get a chance to exercise their voting power to influence the future direction of the company in the next AGM on 5th of September. Setting appropriate executive remuneration to align with the interests of shareholders may also be a way to influence the company performance in the long run. In our opinion, CEO compensation does not look excessive and we discuss why.

How Does Total Compensation For Chi Fai Chung Compare With Other Companies In The Industry?

According to our data, HK Asia Holdings Limited has a market capitalization of HK$104m, and paid its CEO total annual compensation worth HK$845k over the year to March 2024. That is, the compensation was roughly the same as last year. Notably, the salary which is HK$627.0k, represents most of the total compensation being paid.

For comparison, other companies in the Hong Kong Electronic industry with market capitalizations below HK$1.6b, reported a median total CEO compensation of HK$2.1m. In other words, HK Asia Holdings pays its CEO lower than the industry median.

Speaking on an industry level, nearly 78% of total compensation represents salary, while the remainder of 22% is other remuneration. Although there is a difference in how total compensation is set, HK Asia Holdings more or less reflects the market in terms of setting the salary. If salary is the major component in total compensation, it suggests that the CEO receives a higher fixed proportion of the total compensation, regardless of performance.

HK Asia Holdings Limited's Growth

HK Asia Holdings Limited's earnings per share (EPS) grew 11% per year over the last three years. Its revenue is up 23% over the last year.

Overall this is a positive result for shareholders, showing that the company has improved in recent years. It's a real positive to see this sort of revenue growth in a single year. That suggests a healthy and growing business. We don't have analyst forecasts, but you could get a better understanding of its growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Has HK Asia Holdings Limited Been A Good Investment?

Few HK Asia Holdings Limited shareholders would feel satisfied with the return of -89% over three years. This suggests it would be unwise for the company to pay the CEO too generously.

To Conclude...

The fact that shareholders are sitting on a loss is certainly disheartening. This diverges with the robust growth in EPS, suggesting that there is a large discrepancy between share price and fundamentals. A key question may be why the fundamentals have not yet been reflected into the share price. In the upcoming AGM, shareholders should take this opportunity to raise these concerns with the board and revisit their investment thesis with regards to the company.

We can learn a lot about a company by studying its CEO compensation trends, along with looking at other aspects of the business. In our study, we found 2 warning signs for HK Asia Holdings you should be aware of, and 1 of them is a bit unpleasant.

Important note: HK Asia Holdings is an exciting stock, but we understand investors may be looking for an unencumbered balance sheet and blockbuster returns. You might find something better in this list of interesting companies with high ROE and low debt.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.