Intrinsic Value Sunrise Group Company Limited (002752.SZ)

• Previous Close: $6.56
• Intrinsic Value: $5.48
• Upside potential: -16%

Stock Valuation Context

Business Model And Market Position

Sunrise Group Company Limited operates as a comprehensive packaging solutions provider within China's consumer cyclical sector, specializing in metal packaging containers for food and beverage industries. The company generates revenue through designing, printing, producing, and distributing two-piece and three-piece cans, aluminum bottles, and cap products. Its integrated service model extends beyond manufacturing to include beverage filling operations, logistics support, and sophisticated value-added services such as package design, smart marketing solutions, and anti-counterfeiting traceability systems. Operating in the highly competitive packaging industry, Sunrise Group leverages its vertical integration from R&D to distribution to serve multinational and domestic beverage brands. The company maintains its market position through technological capabilities in digital printing and photoelectric lighting applications, while its subsidiary status under Shengxing Holdings provides strategic stability. This positioning allows Sunrise to capture value across the packaging supply chain while addressing evolving consumer demands for innovative and secure packaging solutions.

Revenue Profitability And Efficiency

For FY2024, Sunrise Group reported revenue of CNY 7.13 billion with net income of CNY 423.3 million, translating to a net margin of approximately 5.9%. The company demonstrated solid cash generation with operating cash flow of CNY 524.4 million, which adequately covered capital expenditures of CNY 314.0 million. This financial performance reflects efficient operations within the competitive packaging industry, where margins are typically compressed by raw material costs and pricing pressures from large beverage customers.

Earnings Power And Capital Efficiency

The company delivered diluted EPS of CNY 0.43, indicating reasonable earnings power relative to its capital structure. Operating cash flow exceeded net income by approximately 24%, suggesting quality earnings with minimal non-cash adjustments. The gap between operating cash flow and capital expenditures resulted in moderate free cash flow generation, which supports the company's ability to fund growth initiatives while maintaining financial flexibility.

Balance Sheet And Financial Health

Sunrise Group maintains a balanced financial position with cash and equivalents of CNY 1.03 billion against total debt of CNY 1.56 billion. The company's liquidity position appears adequate, with cash covering a significant portion of short-term obligations. The debt level reflects typical leverage for capital-intensive manufacturing operations, while the low beta of 0.272 suggests relative stability compared to broader market movements.

Growth Trends And Dividend Policy

The company has demonstrated a commitment to shareholder returns through a dividend per share of CNY 0.10, representing a payout ratio of approximately 23% based on FY2024 earnings. This balanced approach allows for reinvestment in business expansion while providing income to investors. The packaging industry's growth is closely tied to consumer spending trends, particularly in the beverage sector where Sunrise maintains its core customer relationships.

Valuation And Market Expectations

With a market capitalization of approximately CNY 5.51 billion, the company trades at a price-to-earnings ratio of around 13 based on FY2024 earnings. This valuation reflects market expectations for stable performance in the packaging sector, balancing growth potential against cyclical industry dynamics. The valuation multiples appear reasonable given the company's market position and financial metrics.

Strategic Advantages And Outlook

Sunrise Group's strategic advantages include its integrated service model spanning design, production, and value-added services, which creates customer stickiness. The company's focus on technological innovation in packaging solutions and traceability systems positions it well for evolving market demands. However, the outlook remains contingent on consumer spending patterns and raw material cost management, with the company needing to navigate competitive pressures while leveraging its established industry relationships.

Sources

Company filingsFinancial data providers