| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 21.99 | 220 |
| Intrinsic value (DCF) | 1.79 | -74 |
| Graham-Dodd Method | 0.15 | -98 |
| Graham Formula | 0.08 | -99 |
Huludao Zinc Industry Co., Ltd. is a prominent Chinese non-ferrous metal smelting company specializing in zinc, lead, and copper processing. Headquartered in Huludao, China, the company operates within the Basic Materials sector, focusing on industrial materials essential for various downstream industries. Huludao Zinc's core business involves smelting and deep processing of zinc, copper, and lead, along with comprehensive utilization of by-products including cadmium, indium, sulfuric acid, and copper sulfate. The company's diverse product portfolio includes zinc ingot, electrolead, high purity metals, silver bullion, hot galvanized products, zinc sulfate, and gold products. These materials serve critical applications across metallurgy, machinery, electronics, medicine, chemical, military, and other industrial sectors. With an established export network spanning approximately 20 countries and regions, Huludao Zinc Industry has developed international market presence while maintaining strong domestic operations. As a key player in China's non-ferrous metal industry, the company contributes significantly to the global supply chain for essential industrial materials, positioning itself at the forefront of zinc and lead processing technology while addressing growing demand from industrial and manufacturing sectors worldwide.
Huludao Zinc Industry presents a mixed investment profile with several concerning financial metrics. While the company maintains a substantial market capitalization of approximately CN¥6.22 billion and generated significant revenue of CN¥15.6 billion, its profitability appears weak with net income of only CN¥21.3 million, resulting in minimal diluted EPS of CN¥0.01. More alarmingly, the company reported negative operating cash flow of CN¥-527.6 million despite positive net income, suggesting potential working capital challenges or quality of earnings concerns. The dividend payment of CN¥0.03 per share appears generous relative to earnings but may not be sustainable given the cash flow situation. With total debt of CN¥2.79 billion against cash equivalents of CN¥1.53 billion, the company's leverage position requires careful monitoring. The beta of 0.913 indicates slightly less volatility than the broader market, but the combination of weak profitability, negative cash flow, and substantial debt creates significant investment risk that warrants cautious consideration.
Huludao Zinc Industry operates in a highly competitive non-ferrous metal smelting industry where scale, operational efficiency, and cost control are critical competitive advantages. The company's positioning appears challenged by several factors evident in its financial performance. While it maintains revenue scale comparable to industry peers, its razor-thin net margin of approximately 0.14% suggests significant competitive pressures and potentially higher cost structures than more efficient competitors. The negative operating cash flow indicates potential inventory management issues or receivables challenges that could undermine competitive positioning. Huludao's geographic location in Huludao may provide some regional advantages in terms of raw material access and logistics, but the company's international export reach to approximately 20 countries demonstrates some competitive diversification. The company's product diversification across zinc, lead, copper, and precious metal by-products represents a strategic advantage in mitigating commodity price volatility. However, the substantial debt load relative to earnings capacity may limit investment in technological upgrades and efficiency improvements needed to compete effectively against larger, more financially robust competitors. The company's ability to maintain dividend payments despite weak cash generation suggests either confidence in future performance or potential financial strain. Overall, Huludao Zinc Industry appears to be operating in a challenging competitive position where scale alone may not be sufficient to overcome structural efficiency disadvantages compared to industry leaders.