Critical Analysis: Qiwi (QIWI) versus China Recycling Energy (CREG)

Qiwi (NASDAQ:QIWI) and China Recycling Energy (NASDAQ:CREG) are both small-cap business services companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, earnings and institutional ownership.

Profitability

This table compares Qiwi and China Recycling Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Qiwi 11.52% 14.40% 6.75%
China Recycling Energy N/A -6.97% -4.88%

Earnings and Valuation

This table compares Qiwi and China Recycling Energy’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Qiwi $363.00 million 1.81 $53.24 million $1.04 14.08
China Recycling Energy $10,000.00 1,071.20 -$8.99 million N/A N/A

Qiwi has higher revenue and earnings than China Recycling Energy.

Volatility and Risk

Qiwi has a beta of 2.29, meaning that its share price is 129% more volatile than the S&P 500. Comparatively, China Recycling Energy has a beta of 1.82, meaning that its share price is 82% more volatile than the S&P 500.

Institutional and Insider Ownership

29.7% of Qiwi shares are held by institutional investors. Comparatively, 0.2% of China Recycling Energy shares are held by institutional investors. 33.2% of China Recycling Energy shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current recommendations for Qiwi and China Recycling Energy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Qiwi 1 0 1 0 2.00
China Recycling Energy 0 0 0 0 N/A

Qiwi presently has a consensus price target of $18.00, indicating a potential upside of 22.95%. Given Qiwi’s higher possible upside, research analysts clearly believe Qiwi is more favorable than China Recycling Energy.

Summary

Qiwi beats China Recycling Energy on 9 of the 11 factors compared between the two stocks.

About Qiwi

Qiwi plc, together with its subsidiaries, operates electronic online payment systems primarily in the Russian Federation, Kazakhstan, Moldova, Belarus, Romania, the United Arab Emirates, and internationally. The company offers payment services across online, mobile, and physical channels through a network of approximately 109,000 kiosks and 43,000 terminals that run its proprietary software. It also provides Qiwi Wallet, which is an online and mobile payment processing, and money transfer system that allows customers to pay for the products and services of merchants, as well as perform peer-to-peer money transfers through a virtual wallet; and Visa-branded prepaid cards. In addition, the company offers payment-by installments card systems under the SOVEST brand name; and value added services. Qiwi plc was incorporated in 2007 and is based in Nicosia, Cyprus.

About China Recycling Energy

China Recycling Energy Corporation engages in the recycling energy business in China. It designs, finances, constructs, operates, and transfers waste energy recycling projects to mid- to large-size enterprises involved in high energy-consuming businesses. The company offers waste pressure-to-energy solutions, including the blast furnace top gas recovery turbine unit, a system that utilizes high pressure gas emitted from the blast furnace top to drive turbine units and generates electricity; and waste heat-to-energy solutions, such as heat power generation projects for applications in cement, steel, coking coal, and nonferrous metal industries, which collect the residual heat from various manufacturing processes. It also provides waste gas-to-energy solutions comprising the waste gas power generation system that utilizes flammable waste gas from coal mining, petroleum exploitation, refinery processing, or other sources as a fuel source to generate electricity; and the combined cycle power plant, which employs power generating cycle to utilize the waste gas that generates electricity by burning the flammable waste gas in a gas turbine, as well as uses the waste heat from burning the gas to make steam to generate additional electricity through a steam turbine. In addition, the company offers biomass power generation systems (BMPG); and waste heat power generation (WHPG) systems; and project investment, investment management, economic information consulting, technical, and financial leasing services, as well as leases energy saving systems and equipment. As of December 31, 2017, it had five recycling WHPG systems and four BMPG systems. The company was formerly known as China Digital Wireless, Inc. and changed its name to China Recycling Energy Corporation in March 2007. China Recycling Energy Corporation was incorporated in 1980 and is headquartered in Xi'an, China.

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