| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 27.68 | 2 |
| Intrinsic value (DCF) | 7.24 | -73 |
| Graham-Dodd Method | 5.58 | -79 |
| Graham Formula | n/a |
Sichuan Hexie Shuangma Co., Ltd. represents a unique hybrid business model operating at the intersection of industrial manufacturing and financial services. Originally established in 1998 as a traditional cement producer, the company has strategically diversified into asset management while maintaining its core cement operations. The company manufactures and sells Portland cement, commercial clinker, and aggregates that serve critical infrastructure projects across China, including roads, railways, airports, and power stations. Following a significant corporate transformation, the company rebranded in February 2022 to reflect its expanded focus on private equity investment management and sports training activities. Headquartered in Chengdu, China, Sichuan Hexie Shuangma operates in the competitive Chinese financial services sector while leveraging its industrial heritage. This dual-focused approach positions the company to capitalize on both infrastructure development trends and financial market opportunities, creating a distinctive investment proposition within China's evolving economic landscape. The company's transition from a pure-play cement manufacturer to a diversified entity demonstrates strategic adaptability in responding to market dynamics.
Sichuan Hexie Shuangma presents a compelling but complex investment case with several notable characteristics. The company demonstrates solid profitability with net income of CNY 309 million on revenue of CNY 1.07 billion, translating to healthy margins in its current operations. With a market capitalization of approximately CNY 15.1 billion and a beta of 0.647, the stock shows lower volatility than the broader market, potentially appealing to risk-averse investors. The company maintains reasonable financial health with operating cash flow of CNY 463 million significantly exceeding capital expenditures, and a dividend yield supported by a CNY 0.34 per share distribution. However, investors should carefully consider the strategic shift from cement manufacturing to asset management, which introduces execution risks and requires different operational expertise. The moderate debt level of CNY 611 million against cash holdings of CNY 330 million warrants monitoring as the company navigates its diversification strategy.
Sichuan Hexie Shuangma occupies a unique competitive position that straddles two distinct industries: cement manufacturing and asset management. In the cement sector, the company faces intense competition from large-scale producers like Anhui Conch and China National Building Material, which benefit from economies of scale and nationwide distribution networks. Hexie Shuangma's regional focus in Sichuan provides some insulation from national competitors but limits growth potential. The company's cement operations serve as a stable cash flow generator while it builds its asset management business. In the financial services segment, the company competes against established asset managers and private equity firms, where its lack of track record and brand recognition present significant challenges. The competitive advantage appears to lie in the company's hybrid model, where cement operations provide financial stability while the asset management division offers growth potential. However, this diversification also creates operational complexity and requires management to excel in two fundamentally different businesses. The company's relatively small size in both sectors makes it vulnerable to competitive pressures from larger, more focused players. Success will depend on effectively leveraging regional relationships in cement while building credibility in asset management, a challenging dual mandate that few companies have successfully executed.