| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 30.04 | 399 |
| Intrinsic value (DCF) | 3.18 | -47 |
| Graham-Dodd Method | 4.03 | -33 |
| Graham Formula | n/a |
Shandong Haihua Co.,Ltd is a prominent Chinese chemical manufacturer specializing in the production and distribution of essential industrial chemicals. Founded in 1998 and headquartered in Weifang, Shandong Province, the company has established itself as a key player in China's basic materials sector. Haihua's core product portfolio includes soda ash, bromine, calcium chloride, and raw salt, serving diverse industrial applications across glass manufacturing, inorganic salts, metallurgy, pharmaceuticals, petroleum, textiles, and food processing. The company's strategic location in Shandong provides access to key raw materials and logistical advantages for both domestic distribution and international exports. As China continues to industrialize and develop its manufacturing base, Shandong Haihua benefits from steady demand for its chemical products, particularly soda ash which is essential for glass production in construction and automotive industries. The company's diversified chemical offerings and established market position make it a significant contributor to China's chemical industry supply chain, with products meeting both domestic consumption needs and export markets.
Shandong Haihua presents a mixed investment profile with several notable strengths and concerns. The company demonstrates solid financial health with CNY 2.22 billion in cash reserves against only CNY 437 million in total debt, providing strong liquidity and low leverage. Operating cash flow of CNY 1.66 billion significantly exceeds net income of CNY 39.2 million, indicating robust underlying business operations. However, the thin net profit margin of approximately 0.65% raises concerns about profitability efficiency in a competitive chemical market. The beta of 0.604 suggests lower volatility than the broader market, which may appeal to risk-averse investors. The dividend yield appears reasonable given the current financial position, but investors should monitor the company's ability to maintain profitability amid potential raw material cost fluctuations and competitive pressures in China's chemical sector.
Shandong Haihua operates in the highly competitive Chinese chemical industry, where its competitive positioning is defined by product specialization and regional advantages. The company's focus on soda ash, bromine, and calcium chloride provides some differentiation from broader chemical producers, though it faces intense competition in each product category. Haihua's location in Shandong Province offers strategic advantages for accessing raw materials and serving industrial customers in one of China's major manufacturing regions. The company's competitive advantage appears to stem from its established production facilities and customer relationships rather than technological leadership or significant scale advantages. With a market capitalization of approximately CNY 5.15 billion, Haihua is a mid-sized player in China's chemical sector, lacking the scale of industry giants but potentially offering more focused expertise in its specific product categories. The company's export activities provide some geographic diversification, though international competition presents additional challenges. The chemical industry's cyclical nature and sensitivity to industrial production levels mean Haihua's performance is closely tied to China's broader economic conditions. Environmental regulations and production costs are ongoing competitive factors that require continuous operational efficiency improvements to maintain margin stability in this capital-intensive industry.