| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 19.53 | 231 |
| Intrinsic value (DCF) | 2.86 | -52 |
| Graham-Dodd Method | 2.01 | -66 |
| Graham Formula | 0.02 | -100 |
Zibo Qixiang Tengda Chemical Co., Ltd. is a prominent Chinese specialty chemical manufacturer headquartered in Zibo, Shandong Province. Founded in 2002 and operating as a subsidiary of Zibo Qixiang Petrochemical Industry Group, the company specializes in the production and distribution of high-value chemical products including methyl ethyl ketone (MEK), maleic anhydride, methyl methacrylate (MMA), nitrile latex, and various petroleum-based chemicals. Qixiang Tengda serves both domestic Chinese and international markets with a diversified product portfolio that caters to industries such as plastics, coatings, adhesives, and synthetic rubber. The company has integrated operations that span manufacturing, supply chain management for key raw materials like benzene and MTBE, and energy/chemical product trading. As a key player in China's basic materials sector, Qixiang Tengda leverages its strategic location in one of China's major chemical industry hubs and its vertical integration within the Qixiang Petrochemical Group to maintain competitive positioning in the dynamic Asian chemical markets. The company's focus on intermediate and specialty chemicals positions it as an essential link in numerous industrial value chains.
Zibo Qixiang Tengda presents a mixed investment profile with significant operational scale but concerning profitability metrics. The company generated substantial revenue of CNY 25.2 billion in the latest period, demonstrating strong market presence, but net income of only CNY 31.7 million reflects extremely thin margins of approximately 0.13%. While the company maintains a healthy cash position of CNY 2.9 billion and generated positive operating cash flow of CNY 1.35 billion, its high total debt of CNY 9.85 billion creates substantial financial leverage. The dividend yield appears reasonable at CNY 0.09 per share, but the minimal EPS of CNY 0.0112 raises questions about sustainable payout capacity. The beta of 0.758 suggests lower volatility than the broader market, which may appeal to risk-averse investors in the cyclical chemicals sector. However, the combination of high debt levels, razor-thin margins, and capital expenditures exceeding operating cash flow after accounting for maintenance capex indicates potential financial stress and limited capacity for growth investments without additional financing.
Zibo Qixiang Tengda's competitive positioning is shaped by its integration within the Qixiang Petrochemical Group and its focus on intermediate chemicals. The company's primary competitive advantage stems from its vertical integration, which provides secured access to key raw materials and potentially lower production costs compared to non-integrated competitors. Its product portfolio diversification across MEK, maleic anhydride, MMA, and nitrile latex helps mitigate exposure to cyclical downturns in any single chemical market. However, the company operates in highly competitive segments where Chinese producers often compete on price rather than technological differentiation. The extremely thin profit margins suggest intense price competition and potentially limited pricing power. Qixiang Tengda's scale (CNY 25+ billion revenue) provides some operational advantages, but the high debt load may constrain its ability to invest in technological upgrades or capacity expansion compared to better-capitalized competitors. The company's geographical concentration in China's Shandong province, while providing logistical benefits, also creates regional dependency risks. Its supply chain management and trading activities provide additional revenue streams but may contribute to the low-margin profile. The competitive landscape is characterized by large-scale Chinese chemical conglomerates with stronger financial positions and international chemical giants with superior technological capabilities, suggesting Qixiang Tengda occupies a middle position—too large to be niche but potentially lacking the financial strength or technological edge of market leaders.