Jiangsu Canlon Building Materials Co Ltd

(a) Capital structure and liquidity: The company maintains a debt-to-equity ratio of 1.1, indicating significant leverage relative to its equity base of CNY 1.86 billion. Total liabilities stand at CNY 3.71 billion against total assets of CNY 5.57 billion. Long-term debt is substantial at CNY 2.06 billion. The current ratio is 1.18, suggesting adequate short-term liquidity to cover immediate obligations, though the margin is narrow. Operating cash flow is positive at CNY 266.1 million, providing a buffer against debt servicing needs. However, the risk assessment flags that net cash is negative after subtracting total debt, highlighting a reliance on external financing or asset liquidation for long-term solvency.

(b) Profitability and returns: Profitability metrics are weak. The company reports a net income of only CNY 20.4 million on revenue of CNY 2.41 billion, resulting in a net margin of approximately 0.85%. Return on equity is negative at -0.29%, and return on assets is -0.10%, indicating that the company is not generating adequate returns on its capital base. The EV/EBITDA ratio is negative (-12.21), reflecting earnings before interest, taxes, depreciation, and amortization that are insufficient to cover enterprise value multiples, likely due to high interest expenses or operating losses before tax adjustments. The price-to-book ratio of 3.18 suggests the market values the company's assets at a premium, despite the poor return metrics.

Free cash flow turned positive to 67.6 million CNY, marking a 109.2% year-over-year improvement from the prior period.

Net income surged 103.8% year-over-year to 20.4 million CNY, signaling a significant turnaround from previous losses.

Operating income improved by 102.6% year-over-year to 16.8 million CNY, indicating recovering core operational profitability.

Long-term debt decreased to 2.06 billion CNY in the latest period, down from 2.60 billion CNY in FY2024.

Gross profit reached 518.3 million CNY, maintaining a substantial buffer above operating expenses in the latest period.

The company faces high credit risk, posing significant potential challenges for debt servicing and financial stability.

Debt-to-equity ratio of 1.1 is significantly higher than the cohort median of 0.4, indicating elevated leverage risk.

Revenue ¥2.38B, −15,0% YoY; Operating income −42 393,9% YoY.

• ▍Revenue ¥2.38B, −15,0% YoY
• ▍Operating income −42 393,9% YoY
• ▍Net income −2 479,5% YoY
• ▍Free cash flow −206,6% YoY
• ▍Net margin -22.6%

Revenue ¥2.80B, +31,6% YoY; Operating income +99,2% YoY.

• ▍Revenue ¥2.80B, +31,6% YoY
• ▍Operating income +99,2% YoY
• ▍Net income +114,2% YoY
• ▍Free cash flow +75,6% YoY
• ▍Net margin 0.8%

Revenue ¥2.13B, −17,7% YoY; Operating income −340,2% YoY.

• ▍Revenue ¥2.13B, −17,7% YoY
• ▍Operating income −340,2% YoY
• ▍Net income −321,1% YoY
• ▍Free cash flow −161,8% YoY
• ▍Net margin -7.5%

Revenue ¥2.59B; Operating income ¥77.7M.

• ▍Revenue ¥2.59B
• ▍Operating income ¥77.7M
• ▍Net margin 2.8%