| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 35.72 | 80 |
| Intrinsic value (DCF) | 36.57 | 84 |
| Graham-Dodd Method | 12.22 | -38 |
| Graham Formula | 101.17 | 410 |
Wuxi Double Elephant Micro Fibre Material Co., Ltd. is a prominent Chinese manufacturer specializing in high-quality artificial and synthetic leather products, operating as a subsidiary of Jiangsu Shuangxiang Group. The company's diverse product portfolio includes microfiber leather, PU synthetic leather, and PVC artificial leather used across multiple industries including footwear, furniture, automotive interiors, luggage, and sporting goods. With its headquarters in Wuxi, China, Double Elephant has established a global footprint, exporting its innovative materials to markets across Asia, Europe, the Americas, Africa, and Oceania. The company's expertise in microfiber technology positions it at the forefront of sustainable material solutions in the consumer cyclical sector, serving the growing demand for high-performance synthetic alternatives to genuine leather. As environmental concerns and cost pressures drive increased adoption of synthetic materials, Double Elephant's specialized manufacturing capabilities and extensive product range make it a key player in the global synthetic leather market. The company's focus on research and development enables continuous product innovation, catering to evolving consumer preferences for durable, eco-friendly, and cost-effective material solutions across various applications.
Wuxi Double Elephant presents an intriguing investment case with strong profitability metrics, including a net income of CNY 472 million on revenue of CNY 2.29 billion, translating to an impressive diluted EPS of CNY 1.76. The company maintains a conservative financial profile with low debt levels (CNY 106 million) relative to cash reserves (CNY 262 million) and exhibits a remarkably low beta of 0.184, suggesting defensive characteristics. However, investors should note the concerning operating cash flow of just CNY 10.4 million and negative capital expenditures of CNY -20.2 million, which may indicate operational challenges or strategic shifts. The dividend yield, while present at CNY 0.15 per share, requires monitoring given the cash flow constraints. The company's position in the synthetic materials sector benefits from global sustainability trends, but faces competitive pressures and potential margin compression in the highly competitive Chinese manufacturing landscape.
Wuxi Double Elephant competes in the highly fragmented synthetic leather market, where its competitive advantage stems from specialized expertise in microfiber technology and a diversified product portfolio serving multiple end markets. The company's strength lies in its vertical integration as part of Jiangsu Shuangxiang Group and its technological capabilities in producing high-performance microfiber leather, which commands premium pricing compared to standard PU and PVC alternatives. Double Elephant's global export reach across five continents demonstrates its ability to compete internationally, though it faces intense domestic competition from numerous Chinese manufacturers. The company's positioning as a specialist in microfiber materials differentiates it from broader synthetic leather producers, allowing it to target higher-value applications in automotive, premium footwear, and furniture segments. However, the synthetic leather industry faces challenges including raw material price volatility, environmental regulations, and increasing competition from alternative sustainable materials. Double Elephant's relatively small market capitalization of approximately CNY 4.8 billion suggests it operates as a niche player rather than a market leader, requiring continuous innovation to maintain its competitive edge. The company's low beta indicates it may be less sensitive to market cycles than peers, potentially offering defensive characteristics, but also suggesting limited growth expectations from the market.