| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 26.44 | 121 |
| Intrinsic value (DCF) | 6.23 | -48 |
| Graham-Dodd Method | 1.92 | -84 |
| Graham Formula | 0.19 | -98 |
Zhejiang Jingu Company Limited is a prominent Chinese automotive wheel manufacturer with over 35 years of industry experience since its founding in 1986. Headquartered in Fuyang, China, the company specializes in the research, development, production, and sale of steel rolling wheels for various vehicle segments. Jingu's comprehensive product portfolio includes high vent, semi-fullface, full face, and light wheels for passenger cars, tubeless truck/bus wheels, trailer wheels, snow car wheels, UTV wheels, and agricultural vehicle wheels. The company operates across the entire value chain, from manufacturing to aftermarket services including tire changing, dynamic balance, and four-wheel alignment services. With significant export operations spanning Europe, the United States, and Southeast Asia, Zhejiang Jingu has established itself as a key player in the global automotive parts supply chain. As China's automotive industry continues to evolve, Jingu leverages its manufacturing expertise and international reach to serve both domestic and international OEM and aftermarket customers in the competitive auto parts sector.
Zhejiang Jingu presents a mixed investment profile with several concerning financial metrics. The company's extremely low net income of CNY 23.2 million on revenue of CNY 3.36 billion reflects razor-thin margins of approximately 0.7%, indicating significant operational challenges or pricing pressure. While the company maintains a substantial cash position of CNY 1.71 billion, it carries considerable debt of CNY 2.62 billion, resulting in a leveraged balance sheet. The modest dividend yield of CNY 0.01 per share provides limited income appeal. Positive aspects include the company's low beta of 0.373, suggesting lower volatility than the broader market, and positive operating cash flow of CNY 138 million. However, the substantial capital expenditures of CNY -407.7 million indicate ongoing investment requirements. Investors should carefully monitor the company's ability to improve profitability and manage its debt load in the competitive automotive parts sector.
Zhejiang Jingu operates in the highly competitive automotive wheel manufacturing sector, where scale, technological capability, and cost efficiency are critical success factors. The company's competitive positioning is challenged by its relatively small market capitalization of approximately CNY 12.9 billion and thin profit margins compared to larger global competitors. Jingu's primary competitive advantages include its long-standing industry experience dating back to 1986, diversified product portfolio spanning multiple vehicle segments, and established export channels to key international markets including Europe and North America. The company's integrated business model, combining manufacturing with aftermarket services, provides some differentiation from pure manufacturing competitors. However, Jingu faces intense competition from both domestic Chinese manufacturers benefiting from lower production costs and international players with stronger technological capabilities and brand recognition. The automotive wheel industry is characterized by high capital intensity and pressure from automotive OEMs to reduce costs, which particularly impacts smaller manufacturers like Jingu. The company's ability to compete effectively depends on maintaining cost competitiveness, investing in product innovation, and navigating the evolving regulatory environment for vehicle components, especially as the industry shifts toward lighter materials and electric vehicle-specific requirements.