| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 37.32 | -31 |
| Intrinsic value (DCF) | 15.89 | -71 |
| Graham-Dodd Method | 18.24 | -66 |
| Graham Formula | 19.33 | -64 |
OK Science and Technology Co., Ltd. is a specialized Chinese industrial machinery manufacturer focused on tissue paper production equipment and converting machinery. Founded in 2011 and headquartered in Jiujiang, China, the company designs and manufactures comprehensive solutions for tissue paper production, including machines for facial tissues, napkins, toilet paper, kitchen towels, and pocket tissues. The company expanded its product portfolio during the pandemic to include disposable surgical mask making machines and KN95 mask making machines, demonstrating adaptability to market demands. Operating in the industrials sector, OK Science and Technology serves the global tissue paper manufacturing industry with integrated machinery solutions that cover the entire production process from paper making to final packaging. The company's expertise in tissue paper machinery positions it as a key supplier to China's massive paper products industry while also competing in international markets. With its listing on the Shenzhen Stock Exchange, OK Science and Technology represents an important player in China's industrial machinery ecosystem, leveraging the country's manufacturing capabilities to serve both domestic and international clients in the tissue paper and personal protective equipment sectors.
OK Science and Technology presents a mixed investment profile with several concerning financial indicators. The company's negative operating cash flow of -39 million CNY and substantial capital expenditures of -134 million CNY raise liquidity concerns despite maintaining a reasonable cash position of 482 million CNY. While the company achieved positive net income of 34 million CNY with diluted EPS of 0.51 CNY, the cash flow situation suggests potential operational challenges or aggressive expansion. The modest market capitalization of 3.77 billion CNY and beta of 0.751 indicate lower volatility relative to the market, which may appeal to risk-averse investors. However, the negative cash flow from operations coupled with high capital expenditures warrants careful monitoring of the company's ability to fund ongoing operations and growth initiatives. The dividend payment of 0.10714 CNY per share provides some income component, but sustainability may be questionable given the current cash flow profile.
OK Science and Technology competes in the specialized tissue paper machinery market, where competitive advantage is built on technological expertise, manufacturing efficiency, and cost competitiveness. The company's positioning as a Chinese manufacturer provides inherent advantages in production costs and proximity to one of the world's largest tissue paper markets. However, the competitive landscape for tissue paper machinery is dominated by established global players with stronger technological capabilities and broader international presence. The company's expansion into mask-making machinery during the pandemic demonstrated strategic flexibility but also highlighted its reliance on temporary market opportunities rather than sustained core competency development. OK Science's competitive positioning is challenged by larger international competitors who offer more comprehensive solutions, superior after-sales service, and stronger R&D capabilities. The company's moderate scale (666 million shares outstanding) limits its ability to invest in significant technological innovation compared to global leaders. While cost competitiveness remains a key advantage in serving price-sensitive markets, the company faces pressure from both higher-end European manufacturers and lower-cost domestic competitors. The negative operating cash flow suggests potential competitive pressures affecting profitability or inefficient operations that could undermine long-term competitiveness. The company's future success will depend on its ability to leverage Chinese manufacturing advantages while developing distinctive technological capabilities that differentiate it from both domestic and international competitors.