Hunan Valin Steel Co Ltd

Hunan Valin Steel Co Ltd maintains a capital structure characterized by a debt-to-equity ratio of 0.35 and a current ratio of 0.91, indicating moderate leverage but tight short-term liquidity. The company holds total assets of 148.5 billion CNY against total liabilities of 92.8 billion CNY, with long-term debt standing at 19.3 billion CNY. Operating cash flow of 6.6 billion CNY supports the balance sheet, though free cash flow is constrained to 714 million CNY due to capital expenditures of 6.1 billion CNY. 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 asset liquidation for short-term obligations.

Profitability metrics reveal a return on equity of 3.95% and a return on assets of 1.48%, suggesting modest efficiency in capital deployment. The company generated net income of 2.6 billion CNY on revenue of 121.7 billion CNY, resulting in a net margin of approximately 2.1%. Operating income of 5.2 billion CNY indicates that core operations remain profitable despite the thin margins typical of the steel industry. Without cohort median data for direct comparison, these returns must be evaluated against the broader context of cyclical commodity producers, where low single-digit ROE is common during periods of subdued demand or high input costs.

Analysts project 87.7% upside to a consensus target price of 7.6 CNY, signaling strong market confidence.

Free cash flow surged 210.8% year-over-year to 713.5 million CNY, demonstrating significant improvement in cash generation.

Net income grew 28.5% year-over-year to 2.61 billion CNY, indicating a recovery in profitability trends.

Cash conversion ratio of 2.99 exceeds the 75th percentile of the cohort, highlighting superior operational efficiency.

Debt-to-equity ratio of 0.35 is below the cohort median of 0.4, suggesting a relatively conservative leverage position.

Revenue declined 8.2% annually over four years, reflecting a persistent and significant contraction in top-line growth.

The company faces high credit risk, posing a substantial threat to financial stability and potential default probabilities.

Return on equity of 3.95% lags the cohort median of 7.87%, suggesting inefficient use of shareholder capital.

Long-term debt increased to 26.06 billion CNY in 2025, raising concerns about rising financial obligations and leverage.

Revenue ¥121.74B, −15,9% YoY; Operating income +22,8% YoY.

• ▍Revenue ¥121.74B, −15,9% YoY
• ▍Operating income +22,8% YoY
• ▍Net income +28,5% YoY
• ▍Free cash flow +210,8% YoY
• ▍Net margin 2.1%

Revenue ¥144.68B, −12,0% YoY; Operating income −43,7% YoY.

• ▍Revenue ¥144.68B, −12,0% YoY
• ▍Operating income −43,7% YoY
• ▍Net income −60,0% YoY
• ▍Free cash flow −89,0% YoY
• ▍Net margin 1.4%

Revenue ¥164.47B, −2,5% YoY; Operating income −13,6% YoY.

• ▍Revenue ¥164.47B, −2,5% YoY
• ▍Operating income −13,6% YoY
• ▍Net income −20,4% YoY
• ▍Free cash flow −14,3% YoY
• ▍Net margin 3.1%

Revenue ¥168.64B, −1,7% YoY; Operating income −27,2% YoY.

• ▍Revenue ¥168.64B, −1,7% YoY
• ▍Operating income −27,2% YoY
• ▍Net income −34,1% YoY
• ▍Free cash flow −66,6% YoY
• ▍Net margin 3.8%

Revenue ¥171.58B; Operating income ¥11.92B.

• ▍Revenue ¥171.58B
• ▍Operating income ¥11.92B
• ▍Net margin 5.6%