| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 32.59 | 195 |
| Intrinsic value (DCF) | 48.59 | 339 |
| Graham-Dodd Method | 5.21 | -53 |
| Graham Formula | 7.75 | -30 |
China Haisum Engineering Co., Ltd. (002116.SZ) is a prominent Chinese engineering and construction firm with a distinguished history dating back to 1953. Headquartered in Shanghai, Haisum provides comprehensive general contracting and project management services across a remarkably diverse range of industries. The company's core expertise spans engineering design, project consultation, and engineering supervision for sectors including pulp and paper, food and beverage processing, pharmaceuticals, biotechnology, consumer goods, building materials, and public utilities. As a globally active player, Haisum executes projects across Asia, Europe, Africa, the Americas, and Oceania, leveraging its deep technical knowledge and project lifecycle management capabilities. Operating within the Industrials sector, the company is a key contributor to China's industrial modernization and international infrastructure development, serving both domestic and international clients with integrated engineering solutions. Haisum's long-standing reputation and multidisciplinary approach position it as a versatile partner for complex industrial projects worldwide.
China Haisum presents a mixed investment profile characterized by stable operations but modest profitability. The company maintains a strong financial position with CNY 3.37 billion in cash against minimal debt (CNY 10.8 million), indicating low financial risk and significant liquidity. However, with a net income margin of approximately 4.9% on CNY 6.82 billion revenue, profitability appears constrained. The company generates positive operating cash flow (CNY 277 million) and pays a dividend (CNY 0.31 per share), offering some shareholder returns. The beta of 0.77 suggests lower volatility than the broader market, which may appeal to risk-averse investors. Key risks include reliance on industrial capital expenditure cycles, potential margin pressure in competitive bidding environments, and exposure to international market fluctuations. The investment case hinges on Haisum's ability to leverage its diverse industry expertise to secure higher-margin projects while maintaining its conservative financial approach.
China Haisum competes in the fragmented engineering and construction services market by leveraging its specialized multi-industry expertise and long-established reputation. The company's competitive positioning is defined by its remarkable breadth of service capabilities across numerous industrial verticals, from traditional sectors like pulp and paper to growing areas like pharmaceuticals and biotechnology. This diversification provides revenue stability compared to competitors focused on single industries. Haisum's competitive advantages include its technical depth accumulated over seven decades of operation, strong domestic relationships in China's industrial sector, and international project experience across five continents. The company's asset-light model, evidenced by low capital expenditures relative to revenue, allows for flexibility in project selection. However, Haisum faces intense competition from larger Chinese state-owned engineering firms with greater resources and international scale, as well as specialized engineering companies with deeper expertise in specific high-margin sectors. The company's moderate profit margins suggest it competes primarily on technical competence and reliability rather than cost leadership. Its future competitive positioning will depend on its ability to differentiate through technological innovation, particularly in sustainable engineering and digital project management, while navigating the cyclical nature of industrial investment cycles both in China and internationally.