Eaglerise Electric & Electronic China Co Ltd

Eaglerise Electric & Electronic China Co Ltd maintains a capital structure characterized by significant leverage and tight liquidity. The company reports total assets of 9.10 billion CNY against total liabilities of 5.31 billion CNY, resulting in a debt-to-equity ratio of 0.69. Long-term debt stands at 2.61 billion CNY, which exceeds the company's total equity of 3.79 billion CNY when considering the broader liability structure. Liquidity is constrained, evidenced by a current ratio of 0.99, indicating that current liabilities slightly exceed current assets. The risk assessment flags medium liquidity risk and notes that net cash is negative after subtracting total debt, highlighting a reliance on external financing or operational cash generation to meet obligations.

Profitability metrics indicate modest returns on capital. The company generated net income of 200.24 million CNY on revenue of 5.26 billion CNY, yielding a net margin of approximately 3.8%. Return on equity (ROE) is 7.29%, while return on assets (ROA) is 3.03%. These returns are generated against a high valuation multiple, with a price-to-earnings (P/E) ratio of 43.95 and an EV/EBITDA of 46.60. The price-to-book ratio is 3.2, suggesting the market prices in future growth expectations despite current moderate profitability levels.

The company's revenue base is substantial, totaling 5.26 billion CNY in the latest period. Gross profit is reported at 921.29 million CNY, implying a gross margin of approximately 17.5%. Operating income is 216.26 million CNY, reflecting operating leverage challenges or high operating expenses relative to gross profit. Without specific segment or geographic breakdowns in the provided data, the revenue concentration is assumed to be driven by its core heavy electrical equipment activities within the Chinese market, consistent with its ticker listing on the Shenzhen Stock Exchange.

Growth trajectory analysis is limited by the absence of historical period data in the input. However, the current valuation multiples suggest that the market anticipates significant future revenue or earnings expansion. The free cash flow is negative at -1.04 billion CNY, driven by capital expenditures of -1.28 billion CNY against operating cash flow of 640.52 million CNY. This negative free cash flow indicates a heavy investment phase, likely in capacity expansion or technology upgrades, which may support future growth but pressures current liquidity.

Risk factors are primarily centered on liquidity and leverage. The medium liquidity risk is compounded by the negative net cash position and a current ratio below 1.0. The dilution risk is assessed as low, with basic and diluted shares outstanding being identical at 422.58 million shares, indicating no immediate options or convertible securities impacting share count. The key flag of negative net cash after debt subtraction underscores the importance of maintaining access to credit markets or generating sufficient operating cash flow to service the 2.61 billion CNY in long-term debt.

Recent observations from investor relations data show strong analyst sentiment. The mean and median price targets are both 48.00 CNY, significantly above the current market price of 28.72 CNY, implying a potential upside of approximately 67%. The mean recommendation is 1.50, with two strong buy ratings and one buy rating, and no hold or sell ratings, indicating unanimous bullish sentiment among covering analysts. This consensus view likely reflects expectations for the company's heavy electrical equipment business to benefit from broader industrial or infrastructure trends in China.

Revenue reached 5.26 billion CNY in FY2026, demonstrating significant top-line growth despite broader economic headwinds.

Analysts assign a strong buy rating with a target price of 48.0 CNY, implying 8.6% upside from current levels.

Cash conversion ratio of 2.32 ranks above the 75th percentile of the cohort, highlighting strong operational cash generation.

Long-term debt surged to 2.61 billion CNY in FY2026, reflecting a substantial increase in financial leverage and obligations.

Debt-to-equity ratio of 0.69 places the company in the bottom quartile of its cohort, signaling elevated financial risk.

Free cash flow deteriorated to negative 1.04 billion CNY in FY2026, indicating severe cash burn and liquidity pressure.

High credit risk flags suggest potential difficulties in meeting debt obligations or securing favorable financing terms.

Revenue ¥5.26B, +13,5% YoY; Operating income −37,4% YoY.

• ▍Revenue ¥5.26B, +13,5% YoY
• ▍Operating income −37,4% YoY
• ▍Net income −31,6% YoY
• ▍Free cash flow +29,6% YoY
• ▍Net margin 3.8%

Revenue ¥4.64B, +27,8% YoY; Operating income +54,2% YoY.

• ▍Revenue ¥4.64B, +27,8% YoY
• ▍Operating income +54,2% YoY
• ▍Net income +39,8% YoY
• ▍Free cash flow −330,4% YoY
• ▍Net margin 6.3%

Revenue ¥3.63B, +28,7% YoY; Operating income +13,7% YoY.

• ▍Revenue ¥3.63B, +28,7% YoY
• ▍Operating income +13,7% YoY
• ▍Net income +9,3% YoY
• ▍Free cash flow −363,6% YoY
• ▍Net margin 5.8%