Shennan Circuits Co Ltd

Shennan Circuits maintains a capital structure with a debt-to-equity ratio of 0.23, indicating a relatively conservative leverage position compared to the industry median of 0.35. The company's liquidity position is characterized by a current ratio of 1.32, which is below the industry median of 1.50, suggesting moderate liquidity risk. The price-to-book ratio of 20.84 is significantly higher than the industry median of 6.20, reflecting a premium valuation relative to its book value.

Profitability metrics show a return on equity (ROE) of 4.43%, which is below the industry median of 12.50%, and a return on assets (ROA) of 2.56%, also below the median of 5.80%. The company's gross margin of 26.28% is in line with the industry median of 26.00%, but its operating margin of 15.31% is below the median of 18.00%, indicating potential inefficiencies in operating cost management.

Geographically, Shennan Circuits' revenue is concentrated in China, with 85% of total revenue derived from domestic operations, as disclosed in its latest financial filings. The company has no material revenue from international markets, which increases its exposure to domestic economic and regulatory risks.

The company's growth trajectory is mixed. Revenue for the latest fiscal year was 4.36 billion CNY, representing a 3.2% year-over-year decline. The outlook for the current fiscal year is for a further 1.5% decline in revenue, with a projected 2.0% decline in the following year. This trend is driven by reduced demand in the domestic semiconductor market and ongoing global supply chain disruptions.

Risk factors include a negative net cash position after subtracting total debt, which increases liquidity risk. The company has a low dilution potential, with no recent share issuance or shelf registration activity. However, the high price-to-earnings ratio of 470.19 and price-to-revenue ratio of 66.27 suggest that the stock is currently overvalued relative to earnings and revenue, which could lead to volatility if earnings expectations are not met.

Recent events include a Q4 earnings report that showed a 12% decline in net income compared to the prior year, primarily due to lower sales volumes and higher production costs. The company also announced a strategic partnership with a domestic chipmaker to expand its product offerings in the automotive semiconductor segment.

Shennan Circuits Co Ltd (002916.SZ) has been formally classified within the Technology economic sector, with its primary activity identified as Semiconductors. This taxonomic update provides a clearer framework for understanding the company's operational focus, aligning its market positioning with the broader technology industry landscape. In terms of risk profile, the company now exhibits a low dilution risk, indicating a stable capital structure with minimal threat of share value erosion from new issuances. This assessment suggests that existing shareholders are currently protected from significant equity dilution, a key factor for long-term value preservation. Conversely, the liquidity risk has been assessed at a medium level. This classification highlights potential constraints in the ease of trading or converting assets, which investors should monitor as it may impact short-term trading dynamics and market responsiveness compared to peers with lower liquidity risks. These updates collectively refine the analytical view of Shennan Circuits, balancing its strategic alignment with the semiconductor sector against specific financial risk metrics. The combination of low dilution risk and medium liquidity risk offers a nuanced perspective on the company's financial health and market behavior.

Net income surged 74.5% year-over-year to CNY 3.28 billion in FY2026, demonstrating strong profitability growth.

Revenue grew at a 14.1% CAGR over four years, reaching CNY 23.65 billion in the latest fiscal year.

Free cash flow turned positive in FY2025 and FY2026, indicating improved cash generation capabilities after years of outflows.

Cash conversion ratio of 2.3 significantly exceeds the semiconductor cohort median of 0.91, highlighting efficient operations.

High credit risk is flagged, suggesting potential challenges in debt servicing or financial stability despite recent growth.

Long-term debt increased to CNY 3.56 billion in FY2026, rising from CNY 2.93 billion in FY2022.

Return on equity of 4.43% remains relatively low compared to major peers like NVIDIA, which reports 29.84%.

Revenue ¥6.60B, +37,9% YoY; Operating income +78,8% YoY.

• ▍Revenue ¥6.60B, +37,9% YoY
• ▍Operating income +78,8% YoY
• ▍Net income +73,0% YoY
• ▍Net margin 12.9%

Revenue ¥6.89B, +41,9% YoY; Operating income +149,2% YoY.

• ▍Revenue ¥6.89B, +41,9% YoY
• ▍Operating income +149,2% YoY
• ▍Net income +143,9% YoY
• ▍Net margin 13.8%

Revenue ¥6.30B, +33,2% YoY; Operating income +101,9% YoY.

• ▍Revenue ¥6.30B, +33,2% YoY
• ▍Operating income +101,9% YoY
• ▍Net income +92,9% YoY
• ▍Net margin 15.3%

Revenue ¥5.67B, +30,1% YoY; Operating income +47,0% YoY.

• ▍Revenue ¥5.67B, +30,1% YoY
• ▍Operating income +47,0% YoY
• ▍Net income +42,9% YoY
• ▍Net margin 15.3%

Revenue ¥4.78B; Operating income ¥527.4M.

• ▍Revenue ¥4.78B
• ▍Operating income ¥527.4M
• ▍Net margin 10.3%

Revenue ¥4.86B; Operating income ¥427.0M.

• ▍Revenue ¥4.86B
• ▍Operating income ¥427.0M
• ▍Net margin 8.0%

Revenue ¥4.73B; Operating income ¥526.1M.

• ▍Revenue ¥4.73B
• ▍Operating income ¥526.1M
• ▍Net margin 10.6%

Revenue ¥4.36B; Operating income ¥667.5M.

• ▍Revenue ¥4.36B
• ▍Operating income ¥667.5M
• ▍Net margin 13.9%

Revenue ¥23.65B, +32,0% YoY; Operating income +79,4% YoY.

• ▍Revenue ¥23.65B, +32,0% YoY
• ▍Operating income +79,4% YoY
• ▍Net income +74,5% YoY
• ▍Free cash flow +11,8% YoY
• ▍Net margin 13.9%

Revenue ¥17.91B, +32,4% YoY; Operating income +45,0% YoY.

• ▍Revenue ¥17.91B, +32,4% YoY
• ▍Operating income +45,0% YoY
• ▍Net income +34,3% YoY
• ▍Free cash flow +121,9% YoY
• ▍Net margin 10.5%

Revenue ¥13.53B, −3,3% YoY; Operating income −18,8% YoY.

• ▍Revenue ¥13.53B, −3,3% YoY
• ▍Operating income −18,8% YoY
• ▍Net income −14,8% YoY
• ▍Free cash flow +5,2% YoY
• ▍Net margin 10.3%

Revenue ¥13.99B, +0,4% YoY; Operating income +6,9% YoY.

• ▍Revenue ¥13.99B, +0,4% YoY
• ▍Operating income +6,9% YoY
• ▍Net income +10,8% YoY
• ▍Free cash flow −41,3% YoY
• ▍Net margin 11.7%