Soochow Securities Co Ltd

Soochow Securities maintains a capital structure characterized by high leverage, with a debt-to-equity ratio of 2.45. Total liabilities stand at 172.95 billion CNY against total equity of 43.27 billion CNY, resulting in a negative net cash position after subtracting total debt. The firm holds 106.00 billion CNY in long-term debt. Liquidity is assessed as medium risk. Operating cash flow is robust at 13.99 billion CNY, but free cash flow is compressed to 735.75 million CNY due to capital expenditures of 232.91 million CNY. The market capitalization is 39.75 billion CNY, trading at a price-to-book ratio of 0.92, indicating the market values the firm below its book value.

Profitability metrics show a return on equity of 7.8% and a return on assets of 1.56%. The company generated net income of 3.55 billion CNY on revenue of 10.39 billion CNY, yielding a net margin of approximately 34.2%. Operating income was 4.54 billion CNY, suggesting significant operating leverage relative to gross profit of 9.03 billion CNY. The price-to-earnings ratio is 11.78, while the EV/EBITDA ratio is 34.22, reflecting the high debt load in the enterprise value calculation.

Segment and geographic revenue breakdowns are not provided in the available data. The analysis relies on consolidated financial figures. The company operates in the Capital Markets industry, which typically involves diversified revenue streams from transaction-based fees and asset management, but specific concentration risks cannot be quantified from the current input.

Historical growth trajectories and quarterly trends are not available in the provided data. The analysis is based on the latest normalized period. Without historical context, the sustainability of the current revenue base of 10.39 billion CNY cannot be trended against prior periods.

Risk assessment highlights medium liquidity risk and low dilution risk. A key flag is the negative net cash position after subtracting total debt, which underscores the leverage inherent in the securities business model. The debt-to-equity ratio of 2.45 is a primary driver of financial risk, requiring careful management of interest coverage and refinancing cycles.

Recent analyst observations indicate a mean price target of 9.55 CNY, with a high of 11.80 CNY and a low of 7.31 CNY. The mean recommendation is 2.67, with two buy ratings and no strong buy or hold ratings recorded in the sample. This suggests moderate upside potential from the current market price of 8.00 CNY.

Analysts project 26.2% upside to a mean price target of 9.83, suggesting undervaluation relative to current market price.

Free cash flow surged 1,317.2% year-over-year to 735.7 million CNY, demonstrating a strong recovery in cash generation.

Cash conversion ratio of 4.15 is best-in-class, significantly outperforming the cohort median of 1.21.

Debt-to-equity ratio of 2.45 places the company in the bottom quartile, indicating significantly higher leverage than peers.

High credit risk flag suggests potential difficulties in meeting financial obligations or servicing substantial debt levels.

Long-term debt increased to 106.0 billion CNY in FY2026, reflecting a substantial and growing liability burden.

Return on equity of 7.8% falls slightly below the cohort median of 7.9%, indicating average capital efficiency.

Medium liquidity risk flag indicates potential challenges in meeting short-term financial obligations or operational needs.

Revenue ¥2.05B, −9,4% YoY; Operating income −21,5% YoY.

• ▍Revenue ¥2.05B, −9,4% YoY
• ▍Operating income −21,5% YoY
• ▍Net income −18,2% YoY
• ▍Net margin 39.1%

Revenue ¥1.76B, +228,7% YoY; Operating income +2,4% YoY.

• ▍Revenue ¥1.76B, +228,7% YoY
• ▍Operating income +2,4% YoY
• ▍Net income +15,5% YoY
• ▍Net margin 35.1%

Revenue ¥2.85B, −15,9% YoY; Operating income +50,2% YoY.

• ▍Revenue ¥2.85B, −15,9% YoY
• ▍Operating income +50,2% YoY
• ▍Net income +50,6% YoY
• ▍Net margin 35.3%

Revenue ¥1.34B, −52,7% YoY; Operating income +40,1% YoY.

• ▍Revenue ¥1.34B, −52,7% YoY
• ▍Operating income +40,1% YoY
• ▍Net income +34,2% YoY
• ▍Net margin 71.3%

Revenue ¥2.26B; Operating income ¥1.28B.

• ▍Revenue ¥2.26B
• ▍Operating income ¥1.28B
• ▍Net margin 43.4%

Revenue -¥1.37B; Operating income ¥667.3M.

• ▍Revenue -¥1.37B
• ▍Operating income ¥667.3M
• ▍Net margin -39.2%

Revenue ¥3.39B; Operating income ¥868.4M.

• ▍Revenue ¥3.39B
• ▍Operating income ¥868.4M
• ▍Net margin 19.7%

Revenue ¥2.83B; Operating income ¥904.3M.

• ▍Revenue ¥2.83B
• ▍Operating income ¥904.3M
• ▍Net margin 25.1%

Revenue ¥10.39B, +27,0% YoY; Operating income +48,6% YoY.

• ▍Revenue ¥10.39B, +27,0% YoY
• ▍Operating income +48,6% YoY
• ▍Net income +50,1% YoY
• ▍Free cash flow +1 317,2% YoY
• ▍Net margin 34.2%

Revenue ¥8.18B, −32,3% YoY; Operating income +16,9% YoY.

• ▍Revenue ¥8.18B, −32,3% YoY
• ▍Operating income +16,9% YoY
• ▍Net income +18,2% YoY
• ▍Free cash flow +85,7% YoY
• ▍Net margin 28.9%

Revenue ¥12.09B, +7,3% YoY; Operating income +18,4% YoY.

• ▍Revenue ¥12.09B, +7,3% YoY
• ▍Operating income +18,4% YoY
• ▍Net income +15,4% YoY
• ▍Free cash flow −195,1% YoY
• ▍Net margin 16.6%

Revenue ¥11.28B, +9,3% YoY; Operating income −31,9% YoY.

• ▍Revenue ¥11.28B, +9,3% YoY
• ▍Operating income −31,9% YoY
• ▍Net income −27,4% YoY
• ▍Free cash flow −131,7% YoY
• ▍Net margin 15.4%