Intrinsic Value Zhejiang Jasan Holding Group Co., Ltd. (603558.SS)

• Previous Close: $11.93
• Intrinsic Value: $4.49
• Upside potential: -62%

Stock Valuation Context

Business Model And Market Position

Zhejiang Jasan Holding Group operates as a specialized manufacturer of knitted sportswear with a focused product portfolio centered on cotton socks and underwear. The company employs a vertically integrated business model encompassing design, development, manufacturing, and service operations, serving global markets from its base in Hangzhou, China. This integrated approach allows Jasan to maintain quality control throughout the production process while optimizing cost efficiency. Operating within the competitive apparel manufacturing sector, the company has established itself as a niche player with particular expertise in knitted textiles for athletic and casual wear. Its market positioning leverages China's manufacturing capabilities while targeting international distribution channels, creating a balanced exposure to both domestic and overseas demand cycles. The company's longevity since its 1993 founding provides established operational experience in textile manufacturing, though it operates in a fragmented industry with significant competition from both specialized manufacturers and larger apparel conglomerates.

Revenue Profitability And Efficiency

The company generated CNY 2.57 billion in revenue with net income of CNY 324.9 million, reflecting a healthy net margin of approximately 12.6%. Operating cash flow of CNY 342.2 million significantly exceeded net income, indicating strong cash conversion efficiency. Capital expenditures of CNY 278.7 million suggest ongoing investment in production capacity and operational improvements.

Earnings Power And Capital Efficiency

Diluted EPS of CNY 0.89 demonstrates solid earnings generation relative to the share count. The company maintains reasonable capital efficiency with operating cash flow covering capital investment requirements. The cash flow from operations adequately supports both reinvestment needs and potential shareholder returns.

Balance Sheet And Financial Health

The balance sheet shows CNY 318.6 million in cash against total debt of CNY 956.4 million, indicating moderate leverage. The debt level appears manageable given the company's cash generation capacity and profitability. Current liquidity appears adequate for operational needs despite the debt position.

Growth Trends And Dividend Policy

The company has established a shareholder return policy with a dividend per share of CNY 0.55, representing a payout ratio of approximately 62% based on current EPS. This indicates a commitment to returning capital to shareholders while retaining sufficient earnings for reinvestment and growth initiatives.

Valuation And Market Expectations

With a market capitalization of CNY 3.40 billion, the company trades at approximately 10.5 times earnings and 1.3 times revenue. The beta of 0.39 suggests lower volatility than the broader market, potentially reflecting the defensive nature of its essential apparel products and established market position.

Strategic Advantages And Outlook

The company benefits from vertical integration and specialized expertise in knitted textiles, providing cost and quality advantages. Its focus on essential apparel categories offers some resilience during economic cycles. The outlook depends on maintaining competitive manufacturing efficiency and adapting to evolving global supply chain dynamics and consumer preferences.

Sources

Company financial reportsStock exchange disclosuresPublic company description