Changhong Huayi Compressor Co Ltd
Changhong Huayi maintains a conservative capital structure with a debt-to-equity ratio of 0.4, below the median for its industry, and a current ratio of 1.35, indicating moderate liquidity. The company's price-to-book ratio of 1.37 and price-to-tangible-book ratio of 1.37 suggest market valuation is in line with tangible asset value. However, the company reports negative net cash after subtracting total debt, signaling potential liquidity constraints. Profitability metrics show a return on equity of 11.42% and return on assets of 3.33%, both below the industry median for industrial machinery firms. Gross margin of 13.05% (1.5376B gross profit on 11.78B revenue) is in line with sector norms, but operating margin of 6.65% (783.9M operating income) and net margin of 4.20% (494.8M net income) indicate moderate efficiency in converting revenue to profit. The company operates as a single-segment entity with all revenue derived from industrial compressor sales. Geographic exposure is not disclosed in the latest financials, but the company is headquartered in China and likely serves regional industrial markets. No material revenue concentration by geography is reported. Outlook for the current fiscal year shows revenue growth of 4.2% year-over-year, with a 6.1% increase in operating income. Free cash flow of 300.2M CNY is expected to support operations and dividends. For the next fiscal year, revenue is projected to grow by 3.8%, with operating income increasing by 5.3%. Risk assessment highlights medium liquidity risk due to negative net cash and a low dilution risk score. No material dilution events are expected in the near term, and the company has not issued new shares in the past 12 months. Adjustments to valuation metrics include a 10% discount for liquidity constraints. Recent filings include a 2023 annual report disclosing capital expenditures of 317.5M CNY and a 2024 Q1 earnings release showing stable operating performance. No material regulatory or litigation risks were disclosed in the latest 10-K equivalent filing.
Business. Changhong Huayi Compressor Co Ltd designs, manufactures, and sells compressors and related equipment for industrial applications.
Classification. The company is classified under the Industrial Machinery & Equipment industry within the Industrial Goods business sector, with a confidence level of 0.92.
- Conservative debt levels and moderate liquidity position support operational stability.
- Profitability metrics lag behind industry peers, particularly in operating and net margins.
- Revenue and operating income growth remain modest but consistent.
- No immediate dilution risk detected in capital structure or recent filings.
- Free cash flow generation supports dividend sustainability and reinvestment.
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- Net cash is negative after subtracting total debt.