| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 24.50 | 250 |
| Intrinsic value (DCF) | 5.24 | -25 |
| Graham-Dodd Method | 4.05 | -42 |
| Graham Formula | 0.80 | -89 |
Changhong Huayi Compressor Co., Ltd. is a leading Chinese manufacturer specializing in the development, production, and sale of compressors essential for refrigeration appliances. Founded in 1994 and headquartered in Jingdezhen, the company plays a critical role in the global supply chain for household and commercial cooling equipment. Its product portfolio includes compressors for refrigerators, freezers, water dispensers, ice machines, and dehumidifiers, serving both domestic Chinese and international markets. As a key subsidiary within the broader Changhong ecosystem, Changhong Huayi leverages strong industrial capabilities and technical expertise in the competitive machinery sector. Operating in the industrials sector, the company's performance is closely tied to consumer appliance demand, manufacturing trends, and energy efficiency standards. With a market capitalization of approximately CNY 5 billion, Changhong Huayi represents a specialized industrial component manufacturer with significant relevance to China's manufacturing ecosystem and global appliance markets.
Changhong Huayi Compressor presents a mixed investment profile with several notable strengths and risks. The company demonstrates solid profitability with net income of CNY 450 million on revenue of CNY 11.97 billion, translating to a healthy net margin. Strong operating cash flow of CNY 770 million and a substantial cash position of CNY 4.08 billion provide financial stability, while moderate debt levels (CNY 798 million) indicate conservative leverage. The company's beta of 0.735 suggests lower volatility than the broader market, which may appeal to risk-averse investors. However, the company operates in a highly competitive, capital-intensive industry with exposure to cyclical consumer appliance demand. The dividend yield appears reasonable but requires confirmation of the share price. Investment attractiveness depends on the company's ability to maintain technological competitiveness, manage input costs, and navigate China's evolving industrial landscape.
Changhong Huayi Compressor operates in a highly competitive global compressor market where scale, technological innovation, and cost efficiency are critical success factors. The company's competitive positioning is strengthened by its integration within the Changhong industrial group, providing potential advantages in supply chain coordination and customer relationships. With revenue exceeding CNY 11.9 billion, Changhong Huayi has achieved meaningful scale in the Chinese compressor market. The company's technical expertise in compressor manufacturing for refrigeration applications represents a core competency, though it faces intense competition from both domestic Chinese manufacturers and international industrial giants. The compressor industry requires significant capital investment in manufacturing facilities and R&D, creating barriers to entry but also pressuring margins. Changhong Huayi's competitive advantage likely stems from its established production capabilities, domestic market knowledge, and potential cost advantages relative to international competitors. However, the company must continuously innovate to keep pace with evolving energy efficiency standards and technological advancements in compressor design. Its international presence, while noted, may be limited compared to global leaders, potentially constraining growth opportunities outside China. The company's financial health provides resources for competitive investments, but long-term success will depend on maintaining technological relevance and operational efficiency in a price-sensitive industry.