Intrinsic Value Olympic Circuit Technology Co., Ltd (603920.SS)

• Previous Close: $62.33
• Intrinsic Value: $17.10
• Upside potential: -73%

Stock Valuation Context

Business Model And Market Position

Olympic Circuit Technology Co., Ltd operates as a specialized manufacturer of rigid printed circuit boards (PCBs), serving diverse end markets including automotive, medical, data and telecommunications, computer peripherals, industrial equipment, and consumer products. Founded in 1985 and headquartered in Heshan, China, the company leverages its extensive manufacturing expertise to produce single-sided, complex, and multi-layer PCBs, catering to both domestic and international clients. Its revenue model is primarily driven by B2B sales to OEMs and electronics manufacturers requiring high-quality, reliable circuit boards for their products. Operating within the highly competitive global PCB industry, Olympic Circuit Technology has established a solid market position through technological capability and consistent product quality. The company benefits from China's robust electronics manufacturing ecosystem while facing competition from both domestic and international PCB producers. Its strategic focus on multiple high-growth sectors provides diversification and reduces dependency on any single market segment.

Revenue Profitability And Efficiency

The company generated CNY 5.02 billion in revenue with net income of CNY 674.7 million, demonstrating solid profitability. Operating cash flow of CNY 987.7 million significantly exceeded net income, indicating strong cash conversion efficiency. The company maintains healthy operational margins despite competitive industry pressures.

Earnings Power And Capital Efficiency

Olympic Circuit Technology exhibits robust earnings power with diluted EPS of CNY 1.04. The company generated substantial operating cash flow while maintaining disciplined capital expenditures of CNY 297.9 million. This balance reflects efficient capital allocation and strong operational execution in its manufacturing operations.

Balance Sheet And Financial Health

The company maintains a strong financial position with CNY 1.93 billion in cash and equivalents against total debt of CNY 437 million, resulting in a net cash position. This conservative capital structure provides significant financial flexibility and resilience during industry cycles while supporting ongoing operational requirements.

Growth Trends And Dividend Policy

The company demonstrates commitment to shareholder returns with a dividend per share of CNY 0.60, representing a substantial payout ratio. This dividend policy, combined with the company's strong cash generation, indicates a balanced approach to capital allocation that rewards shareholders while retaining funds for strategic investments.

Valuation And Market Expectations

With a market capitalization of CNY 30.18 billion and a beta of 0.497, the market values the company at approximately 6x revenue and 45x earnings. The low beta suggests investors perceive the stock as less volatile than the broader market, potentially reflecting the company's stable business model and financial position.

Strategic Advantages And Outlook

The company benefits from its established manufacturing expertise, diversified customer base across growth sectors, and strong financial foundation. Its positioning in multiple high-demand electronics markets provides resilience, while its net cash position offers strategic flexibility for potential expansion or technological upgrades in the evolving PCB industry.

Sources

Company financial reportsStock exchange disclosuresMarket data providers