| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 26.72 | 458 |
| Intrinsic value (DCF) | 1.50 | -69 |
| Graham-Dodd Method | 0.60 | -87 |
| Graham Formula | n/a |
Zhe Jiang Kangsheng Co., Ltd. is a diversified Chinese industrial company with core operations in refrigeration piping systems and new energy vehicle manufacturing. Founded in 1996 and headquartered in Chun'an, China, Kangsheng has evolved from its steel tube manufacturing roots to become a significant player in China's green technology transition. The company's primary business segments include producing steel, aluminum, and copper tubes for refrigeration systems, micro channel heat exchangers, condensers, and evaporators. Simultaneously, Kangsheng has strategically expanded into the electric vehicle market, manufacturing pure electric buses, tourist vehicles, logistics vehicles, and airport shuttle buses. This dual focus positions the company at the intersection of traditional industrial manufacturing and China's rapidly growing new energy vehicle sector. As a Basic Materials sector company trading on the Shenzhen Stock Exchange, Kangsheng leverages its manufacturing expertise across multiple industrial applications while capitalizing on government-supported clean energy initiatives. The company also maintains financial services operations including financing lease and small loan services, creating additional revenue streams alongside its core industrial businesses.
Zhe Jiang Kangsheng presents a high-risk investment proposition characterized by strategic positioning in growth markets but concerning financial metrics. The company's diversification into new energy vehicles aligns with China's strong policy support for EV adoption, potentially offering long-term growth opportunities. However, current financial performance raises significant concerns, with a net loss of -98.3 million CNY and negative EPS of -0.0865 for the period. While the company maintains adequate cash reserves of 186 million CNY and demonstrates positive operating cash flow of 43.6 million CNY, its debt level of 624 million CNY relative to market capitalization of 5.47 billion CNY warrants careful monitoring. The zero dividend policy reflects the company's need to conserve capital for operational needs and potential expansion. Investors should weigh Kangsheng's exposure to China's EV growth story against its current profitability challenges and the competitive intensity in both refrigeration components and vehicle manufacturing sectors.
Zhe Jiang Kangsheng operates in two distinct but related competitive landscapes: refrigeration components and new energy vehicles. In refrigeration piping systems, the company competes against specialized tubing manufacturers and larger industrial conglomerates. Kangsheng's competitive position in this segment relies on its manufacturing expertise and established customer relationships, though it faces pressure from both low-cost producers and technologically advanced competitors offering integrated solutions. The company's expansion into new energy vehicles represents a strategic pivot but places it against well-established Chinese EV manufacturers with significantly greater scale, brand recognition, and technological resources. Kangsheng's competitive advantage appears limited in the vehicle manufacturing segment, where it lacks the production scale, distribution networks, and R&D capabilities of market leaders. The company's dual business model creates both diversification benefits and operational complexity, potentially diluting management focus and capital allocation efficiency. Financially, Kangsheng's negative profitability contrasts unfavorably with more established competitors in both segments, suggesting challenges in achieving sustainable competitive advantages. The company's moderate beta of 0.638 indicates lower volatility than the broader market, possibly reflecting its niche positioning, but also potentially signaling limited growth expectations from investors. Success likely depends on Kangsheng's ability to leverage its manufacturing capabilities across both business segments while achieving scale and technological differentiation in the highly competitive EV market.