Guoquan Food Shanghai Co Ltd

Guoquan Food maintains a conservative capital structure with a debt-to-equity ratio of 0.07 and a current ratio of 1.79, indicating strong short-term liquidity coverage despite a medium liquidity risk flag. The balance sheet shows total assets of 5.24 billion CNY against total liabilities of 2.20 billion CNY, resulting in total equity of 3.04 billion CNY. Long-term debt stands at 216.5 million CNY, which is minimal relative to equity. However, the company reports negative free cash flow of -27.9 million CNY, driven by capital expenditures of 195.9 million CNY that exceed operating cash flow of 588.4 million CNY. This negative free cash flow position contributes to the key risk flag noting that net cash is negative after subtracting total debt.

Profitability metrics demonstrate solid returns, with a return on equity (ROE) of 14.25% and a return on assets (ROA) of 8.26%. The company generated net income of 432.9 million CNY on revenue of 7.81 billion CNY, resulting in a net margin of approximately 5.5%. Operating income was 597.2 million CNY, yielding an operating margin of roughly 7.6%. The gross profit of 1.69 billion CNY indicates a gross margin of approximately 21.6%. These returns are supported by a valuation profile that includes a price-to-earnings ratio of 10.51 and an EV/EBITDA of 7.98, suggesting the market prices the company at a reasonable multiple relative to its earnings power. The price-to-book ratio of 1.5 aligns with the tangible book value multiple, reflecting a modest premium over the company's net asset value.

Analysts project 67.8% upside to a mean target price of HK$4.55, reflecting strong buy consensus.

Debt-to-equity ratio of 0.07 is significantly lower than the cohort median of 0.40.

Long-term debt more than doubled to 216.5 million CNY in FY2026, increasing leverage significantly.

The company faces medium liquidity risk, which could constrain operational flexibility during downturns.

Revenue ¥7.81B, +20,7% YoY; Operating income +84,3% YoY.

• ▍Revenue ¥7.81B, +20,7% YoY
• ▍Operating income +84,3% YoY
• ▍Net income +87,8% YoY
• ▍Free cash flow −146,4% YoY
• ▍Net margin 5.5%

Revenue ¥6.47B, +6,2% YoY; Operating income −12,7% YoY.

• ▍Revenue ¥6.47B, +6,2% YoY
• ▍Operating income −12,7% YoY
• ▍Net income −3,8% YoY
• ▍Free cash flow −71,3% YoY
• ▍Net margin 3.6%

Revenue ¥6.09B, −15,1% YoY; Operating income +9,4% YoY.

• ▍Revenue ¥6.09B, −15,1% YoY
• ▍Operating income +9,4% YoY
• ▍Net income +4,2% YoY
• ▍Free cash flow +14,7% YoY
• ▍Net margin 3.9%