| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 24.37 | 0 |
| Intrinsic value (DCF) | 35.47 | 46 |
| Graham-Dodd Method | 10.12 | -58 |
| Graham Formula | 31.85 | 31 |
Satellite Chemical Co., Ltd. is a leading Chinese specialty chemicals producer headquartered in Jiaxing, China, with a strategic focus on acrylic acid and its derivatives. The company operates across multiple chemical segments including acrylic acid and ester products, polymer emulsions, functional polymer materials, ethylene oxide and glycol, high-density polyethylene, and polycarboxylic monomers. Founded in 2010 and listed on the Shenzhen Stock Exchange, Satellite Chemical has established itself as a key player in China's basic materials sector with a comprehensive product portfolio serving various industrial applications. The company's vertically integrated operations span from basic chemical intermediates to higher-value specialty products, positioning it strategically within China's growing chemical industry. Satellite Chemical's production capabilities support diverse downstream sectors including construction, textiles, adhesives, and personal care products through its super absorbent resin and pigment intermediary offerings. With a market capitalization exceeding 64 billion CNY, the company represents a significant force in China's specialty chemicals landscape, leveraging its technological expertise and manufacturing scale to maintain competitive advantages in both domestic and international markets.
Satellite Chemical presents a compelling investment case as a vertically integrated specialty chemical producer with strong financial metrics, though it operates in a cyclical industry. The company demonstrated robust profitability with 6.07 billion CNY net income on 45.65 billion CNY revenue, translating to a healthy 13.3% net margin. With diluted EPS of 1.8 CNY and a dividend payout of 0.5 CNY per share, the company offers both growth and income potential. However, investors should note the elevated beta of 1.092, indicating higher volatility than the broader market, and significant total debt of 23.58 billion CNY against cash reserves of 8.51 billion CNY. The company's strong operating cash flow of 10.59 billion CNY supports its capital expenditure program and debt servicing capabilities, but the chemical sector's sensitivity to economic cycles and raw material price fluctuations represents ongoing risk factors that require careful monitoring.
Satellite Chemical competes in the highly fragmented Chinese specialty chemicals market through its vertically integrated business model and scale advantages in acrylic acid and derivatives. The company's competitive positioning is strengthened by its comprehensive product portfolio that spans from basic chemical intermediates to value-added functional polymers, allowing it to capture margins across multiple production stages. Satellite's focus on acrylic acid and ester products provides it with niche expertise in a segment where technological barriers and production scale create meaningful competitive moats. The company's integration into ethylene oxide and glycol production further enhances its cost competitiveness by securing key raw material supplies internally. However, the Chinese chemical industry remains characterized by intense competition, overcapacity in certain segments, and significant price volatility. Satellite's competitive advantages include its manufacturing scale, technological capabilities in polymer emulsions and super absorbent resins, and established customer relationships in downstream industries. The company must continuously invest in R&D and operational efficiency to maintain its position against both domestic competitors and multinational chemical giants operating in China. Regulatory compliance and environmental standards represent additional competitive factors where Satellite's adherence to evolving Chinese environmental policies will impact its long-term cost structure and operational flexibility.